A client’s relationship with the lawyer should most certainly be put in writing and well understood by both parties before entering into this important relationship, no matter what kind of case is involved.

There are many important factors that should be spelled out clearly in the written agreement. Although hiring a lawyer for an hourly rate is generally uncomplicated, a contingency fee agreement may be confusing and has many variables. A contingency fee agreement means that the lawyer or law firm does not bill the client for legal work but that the lawyer takes a percentage of the eventual settlement amount or case’s award as his or her fee.  That contingency fee amount is usually different depending upon when the case settles or resolves. For example, the lawyer may take 20% of the settlement or judgment if the case settles before filing suit, 33 1/3% if after the case is filed but before the case is set for trial, and up to 50% (or even higher) after the case is set for trial, or goes to trial. The percentages vary and are negotiable between lawyer and client. There are no rules– only what the parties agree to.

Also, the case is likely to incur costs– filing fees from the court, service fees, court reporter fees, a whole host of potential costs. Who pays those? The lawyer or the client? When are they paid, when they are incurred or when the case settles? Some lawyer’s agreements remove the lawyer’s percentage before the client pays the costs, others remove the costs, then divide the percentage remaining.

The important point is that the client understands exactly what he or she is agreeing to, and realizes that all aspects of the fee agreement with the lawyer are negotiable, and should be well understood by all parties.