One thing you may encounter in Tennessee when using the services of an attorney is a contingency fee. This is a very common means for paying an attorney. Still many people are not familiar with the term. To help, below is an explanation of what a contingency fee is and how it works.
Rules for contingency fees are part of the Tennessee legal code regulating the conduct of lawyers, specifically the Tennessee Rules of Professional Conduct. Contingency fees can be thought of as a means of paying for an attorney’s services. In most cases, lawyers are paid by the hour for their work on a client’s case. Contingency fees, however, are different. They are only paid if the attorney manages to win the case for the client. In most cases, only the attorney of the plaintiff in a case will agree to work on a contingent basis.
There are really only three results for a lawyer that is being paid on a contingency basis. First, he or she may be able to win the case and obtain monetary damages for the client. The attorney will then take a percentage of these damages as payment. Second, an out of court settlement may be obtained. Similarly, the attorney will take a percentage of this settlement as payment. Third, the case may be lost. In that case, the lawyer will not be paid at all. The client will not owe the attorney anything for legal services at a later date either.
The fee that is charged will be negotiated between the lawyer and client beforehand. Although it can vary, ten percent is a common contingency fee.
The reason defense attorneys do not work on a contingent basis is because defendants are typically not awarded any kind of monetary damages. This is the case for criminal cases in which a defendant is either given punishment for a crime by the government or is acquitted and set free. In fact, the American Bar Association specifically bans criminal defense lawyers from working on a contingent basis.
Contingency fees, however, are quite common in tort cases. This includes personal injury lawsuits, medical malpractice cases, employment lawsuits and benefit disputes. As long as the possible damages or settlement in a tort case are significant enough, there are probably attorneys that are willing to work on a contingent basis.
There are certain benefits to using contingency fees as a system for paying attorneys. For one, this system always gives attorneys an incentive to win the case for their clients. Without contingency fees, attorneys may be tempted to work as many hours as possible. However, that motive doesn’t necessarily correlate with achieving a legal victory for their clients. With a contingency fee, however, an attorney won’t get paid at all if the case is lost.
There are certain rules in place in Tennessee that dictate how contingency fees can be charged. First, the fee must be what the law describes as “reasonable.” It must also be agreed to by both parties and put in writing beforehand. This document should include details on how the fee would be calculated including the percentages that would be applied if the case were successful. This document must also inform the client of any other possible fees that could be deducted from the “recovery” aside from the agreed to percentage.
