If your business has ever been involved in a legal matter, you may be surprised to hear the two phrases together: business litigation and contingency fees. Traditionally, it has been more common to associate a contingency fee model with personal injury law involving individual parties rather than businesses. But this is no longer always the case in today’s legal climate.
Before diving into how pursuing business litigation under a contingency fee agreement can be a great option for modern business needs, let’s take a closer look at what exactly is meant by a contingency fee and what is covered under the term business litigation. For further questions about how your business can benefit from the skill of a business litigation lawyer, reach out to a firm you trust.
What Is a Contingency Fee?
A contingency fee is a sum of money that an attorney only receives if a legal case is won. Defining a contingency fee can best be done in contrast with what many consider the more traditional form of attorney payment—hourly billing. When a lawyer takes a case on a non-contingency basis, they typically charge their services by the hour, or in some cases request the client to pay a flat fee. This model of billing clients does not depend on the case outcome. In contrast, lawyers who take cases on a contingency fee basis are not paid unless they win the case. That’s why some people refer to lawyers who agree to operate under contingency fee structures as “no win, no fee” lawyers.
Attorneys willing to take a case on a contingency fee basis believe the risk to them is worth the reward to the client. And there is risk involved. If a lawyer invests time and labor into a case, only to lose to the opposing party, they have expended a great deal of legal effort with no financial reward. From the business perspective, one great aspect of the contingency fee model is that it sets your business and your attorney positioned toward the same goal: winning your case.
It has conventionally been most typical to find contingency fee services offered to plaintiffs in personal injury cases. If an individual is harmed by another’s negligence, the contingency fee model is a helpful way for them to recover damages without paying attorney’s fees up front, something many people are not economically prepared to do after an accident. However, contingency fee agreements are not solely restricted to personal injury cases. And with the rapid and extensive changes which have come to businesses over the past few years of recession and pandemic, many law firms are realizing that the evolving needs of businesses don’t always match the customary ways of handling legal matters.
What Defines Business Litigation?
Business litigation deals with complex issues which arise within business and commercial relationships. As you know if your business has been involved in a legal matter, business or commercial litigation is different from other areas of law. Business litigation is aimed toward resolving disagreements and protecting the interests of a business. Companies may become involved in disputes over funds, contracts, management practices, intellectual property, or other issues, and it is the job of a business litigator to resolve these issues so that no abuse or harm befalls the business.
Lawyers practicing in this area of the legal profession must have a thorough understanding of both federal and state regulations, and must also be adept working in a range of venues—from private hearings to state and federal courts. The scope of matters which fall into the category of business litigation is extensive. Not every firm which practices business litigation will be competent in every one of the following case types, but this list covers some of the most common cases in this area of law:
- Breach of contract cases
- Employer/employee disputes
- Intellectual property disputes
- Product liability cases
- Security violations
- Partnership disputes
- Shareholder litigation
- Insurance disputes
- Fraud and deceptive trade cases
- Anti-competitive practice cases
- Breach of fiduciary duty cases
Pursuing Business Litigation Under a Contingency Fee Agreement
It’s understandable that many businesses are accustomed to paying their attorneys by the hour. However, this time-based billing model is not always the best choice for a business involved in a legal dispute. Many law firms allow their business plaintiffs to manage legal expenses in the same way that personal injury clients have the option to do. Let’s talk about some of the benefits of contingency fee agreements in business litigation.
- Aligns Goals. Your business and your lawyer both win when your case obtains a successful outcome. The greater the amount of settlement, the more compensation both you and your attorney receive.
- Protects Your Business. With a contingency fee agreement, you avoid paying any upfront or hourly fees, so your financial investment into your legal endeavor is minimal to zero until your attorney does what you hired you them to do.
- Tells Your Chances of Success. Most lawyers who take cases on a contingency fee basis are open and forthright about your case’s chances of success. A business litigator who knows that a case has very little chance of an advantageous outcome will usually tell you so during an initial consultation.
- Pays for Results Instead of Time. Under a non-contingency fee model, lawyers actually make more money the longer it takes to reach a resolution. A contingency fee structure, on the other hand, intrinsically incentivizes to obtain maximum compensation in as short amount of time as possible.
- Gives Access to Resources Large Corporations Have. A contingency fee model makes legal services available equally to all size businesses, as opposed to past problematic situations in which retaining high-quality legal representation was only accessible to large, well-funded corporations.
- Offers Free Consultation. Most attorneys who agree to take business litigation cases on a contingency fee basis also offer free, no-obligation consultations up front to help you decide which law firm is best-equipped to handle your case.
Gain from the Expertise of Thomas Law Offices
At Thomas Law Offices, we work hard on each and every case we take. And after decades of experience in the field, we continue to dynamically learn and adapt so we can best meet our clients’ needs. It is our goal to leverage our knowledge to maximize settlement values for our clients.
Like many lawyers who accept contingency agreements, we do not charge a consultation fee. We believe that a meeting to see if our firm is a good match for you should not come with a price. When looking for an attorney to take your business litigation case, it is always a good idea before your first meeting to determine if the firm charges a fee for an initial consultation. And during the consultation, don’t be afraid to use the opportunity to ask the questions that will help you determine if a firm is right for your business’s legal needs. To set up a meeting with one of our legal representatives, contact us today.