The most common complaint about lawyers by far, is that they cost too much. So what should you pay a lawyer and how do you assess the value of those services?
Lawyers are paid for the time they spend working on your file. Courts, when determining whether a lawyer’s fees are reasonable, consider several factors: the type and amount of the services rendered; the labour, time and complexity involved; the type and importance of the litigation; the amount of money involved; the professional skill and experience required; and the experience, ability and reputation of the lawyer.
A contingency fee is simply paying your lawyer an amount based on a percentage of the money your lawyer recovers for you for your claim. This is in contrast to the more traditional way that lawyers charge for their work, which is getting an initial retainer and charging an hourly rate for the time they work on your case, and billing for that time as the case progresses.
The advantage to a contingency fee is that no fees are paid by the client until the conclusion of the matter and the client only pays if their lawyer is successful in recovering money on their claim. This eliminates the need for the client to have pay any legal fees until their case is over and legal fees are paid only if they have been successful.
Typically a premium is paid by the client to enjoy the benefits of the contingency fee arrangement which is reflected in the contingency rate, which is typically 30% of the amount recovered in personal injury cases. This is in part because in some cases there is a risk the case might not be successful and there is a delay in the payment of fees, often for several years, which means the lawyers are not being paid for their time until the matter is concluded. More risk for the lawyer theoretically justifies a higher fee. Less risk justifies a lower fee.
At McLarty Wolf, we believe contingency fees should be calculated to reflect the amount of time, effort, ability, and risk of not recovering a fee associated with handling your claim. Many contingency fees are charged at 30% in a personal injury case when there is no risk that the case will not succeed to some extent (ie, there is no dispute as to liability for the accident), so the lawyer will be paid a reasonable fee. For example, if your claim involves your being struck from the rear by another vehicle, it is very likely that liability will be admitted. In other words, the only issue is how much you will recover, not whether you will recover anything for your claim, and there is little risk to the lawyer.
In cases involving potentially large damage awards, it may be appropriate to charge a lower percentage fee than in a smaller case.
In many cases at McLarty Wolf we charge contingency fees in personal injury cases with staggered percentage rates to reflect the amount of time involved to effectively prosecute our client’s cases. For example, if the case can be prepared and settled prior to examinations for discovery, we often charge 20% of the amount recovered. Further along in the case the rate increases to 25% with a maximum rate of 30 or 33% if the matter settles just before or proceeds to trial. The advantage to the client is that these adjusted contingency rates more accurately reflect the time and effort put into the claim by your lawyer.
In British Columbia the maximum contingency fee rate chargeable by a lawyer in a personal injury case arising out of the use or operation of a motor vehicle without obtaining a court order in special circumstances is 33 1/3%.