Anyone who’s been seriously injured can relate to the feelings of helplessness, of vulnerability, the menacing sense of despair as the medical bills piled up and earned income dwindles. Personal injury attorneys can readily describe the profound sense of relief they see in so many new clients when the contingent fee compensation relationship is explained.

It’s standard in this area of legal practice. Personal injury lawyers draw compensation from the money recovered for clients. No settlement, no fee. It’s surprising in this day and age, but more than a few clients come in unaware that they won’t immediately be facing a series of legal bills swollen by $300 -$400/hour attorney’s fees. The contingent fee arrangement is not only gentle on a recovering victim’s cash flow, but reconciles clients’ and attorneys’ incentives: both want to win as large a settlement as possible in the shortest period of time.

In Florida, the way lawyers practice is governed by Rules Regulating the Florida Bar, as established by the Supreme Court of Florida.  So it is with contingency fees.

The contingency fee arrangement must be spelled out in a contract between lawyer and client, drawn and signed at the start of the case. This contract has to specify exactly what percentage of money recovered is due the attorney as compensation. It must state explicitly that no payment for service will be due the lawyer if no money is recovered.

In addition, the percentages specified in the contract have to comply with the Rules Regulating the Florida Bar, which define upper limits based on the total of the recovery, the condition of the case when representation began, and the particulars of the settlement or verdict. The broad strokes are upper limits of 33.3% on recovery up to $1 million,  30% on additional amounts between $1 million and $2 million, and 20% on everything above $2 million. These percentages are modified somewhat depending on when in the litigation process the recovery is made, and whether it resulted from a verdict, an admission of liability by the defendant, or arbitration. The high end is 40%, when the defendant doesn’t defend and the court enters a judgment.

Note that the contingent fee itself compensates the attorney for his skill and time. The matter of expenses incurred during the litigation, such as court filing fees, expert witness fees, and photocopying is separate from the contingency fee. The client-attorney contract must address these expenses, define them, and establish whether they’re to be deducted from recovered money or paid in some other way. Most importantly, the contract must establish whether the client has to pay these expenses even if no money is recovered.

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