Contingent Fee Business and Commercial Litigation
At Lenhart Obenshain, our Virginia business and commercial litigation practice is geared towards providing our business and individual clients with access to the court system. We provide a wide variety of business and commercial litigation services across Virginia, and in some situations, across the country.
We believe that business success depends on the ability to form effective partnerships – and that is central to our approach to commercial litigation. We understand that our business clients may find themselves in different circumstances. For some, traditional hourly fee billing makes the most sense, but other businesses and individuals may not have the available resources to make that hourly billing arrangement feasible. That is why we work with our clients to craft fee arrangements that work for them and for us. These fee structures for our business and commercial litigation services vary from hourly billing to fully contingent representation, with blended arrangements in between.
In the right case, a contingent-fee arrangement can be a model of efficiency. The arrangement can align the interests of the client and attorney and effectively makes them business partners in the litigation. Both have the incentive to keep expenses as low as possible, resolve the matter quickly, and recover as much as possible.
The Texas Supreme Court has described the benefits of contingent-fee agreements as follows:
This risk-sharing feature creates an incentive for lawyers to work diligently and obtain the best results possible. A closely related benefit is the contingent fee’s tendency to reduce frivolous litigation by discouraging attorneys from presenting claims that have negative value or otherwise lack merit.
How does a contingent-fee agreement work?
Contingent-fee agreements typically state that the attorney is entitled to a fee when a certain "contingency" is met. That contingency is usually the recovery of money for the client. But contingencies may vary based on the circumstances of the case. Typically, once the contingency (recovery) occurs, case expenses (which include out of pocket costs, like filing fees, court reporters, and experts) are first subtracted from the recovery and the remainder is divided between the client and attorney based on negotiated percentages. So, assuming a settlement of $1,000, $100 in expenses, and a contingent fee of 33%, the client’s portion would be $600. The $100 of case expenses are first subtracted from the $1000 recovery, leaving $900 to be divided between the client and attorney. With a 33% contingent-fee, the attorney would be entitled to one-third of the $900 for his work and the client would be entitled to the other two-thirds.
To learn more about contingent fee business and commercial litigation in Virginia, call 877-716-6434 or call Nancy Schlichting at 434-220-6108 in Charlottesville or Mark Obenshain at 540-437-3100 in Harrisonburg.
