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What is a contingency fee agreement?

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A contingency fee agreement is the typical fee agreement in a personal injury case.  This arrangement means a lawyer is not paid unless you make a monetary recovery.  It also incentivizes the lawyer to build up the case as much as possible.  A few of the advantages of a contingency fee are as follows:

  • You have little to no upfront expenses and personal injury cases can be potentially very expensive cases;
  • You do not receive a legal bill for calling/contacting your lawyer which helps foster more communication;
  • You can focus on getting healthy and allow your lawyer to build up your case; and
  • The lawyer’s recovery is taxed but the client’s recovery for pain and suffering is tax free.

The American Bar Association has explained the pros and cons of a contingency fee agreement in the following link.

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