Dear Business Owner:
I appreciate your interest in exploring the possibility of pursuing commercial litigation on a contingency fee basis. As a business lawyer evaluating potential cases for contingency fee arrangements, there are several factors I carefully consider to determine whether a case is a good fit. Allow me to outline some key considerations:
Good Fit Criteria for Business Contingency Fee Cases:
- Merits of the Case: The strength of the case is paramount. I assess the merits, including the evidence available, legal precedents, and potential outcomes at trial or settlement. A strong case with clear liability increases the likelihood of success and justifies the investment of time and resources on a contingency basis.
- Potential Damages: The potential damages sought play a crucial role. A case with significant monetary recovery potential is more appealing for a contingency fee arrangement. This ensures that the attorney’s fee is proportionate to the client’s recovery. The business’ ability to quantify and establish damages is part of its merits.
- Collectability of Judgment: Even if the case is strong and potential damages are substantial, it’s essential to assess the collectability of any judgment. A favorable verdict is only valuable if it can be enforced, so I consider the defendant’s financial stability and assets.
- Legal Costs: Contingency fee arrangements involve the lawyer assuming the financial risk of the case. I evaluate the expected legal costs, including expert witness fees and court expenses, to ensure that pursuing the case on a contingency basis is economically viable. I also evaluate ways in which sharing of hard costs can be implemented in fair manner.
Bad Fit Criteria for Business Contingency Fee Cases:
- Weak Merits: If the case lacks legal merit or has weak evidentiary support, it may not be suitable for a contingency fee arrangement. The attorney’s time and resources are valuable, and investing in a weak case may not be a prudent business decision.
- Limited Damages: Cases with low potential damages may not justify the risk and effort associated with a contingency fee arrangement. In such instances, alternative fee structures or hourly billing may be more appropriate.
- High Legal Costs: If the anticipated legal costs (monetary or other firm resources) are prohibitively high, it may make the case unsuitable for a contingency fee. The financial risk undertaken by the attorney needs to be balanced with the potential recovery.
- Uncertain Collectability: Cases where the ability to collect a judgment is uncertain, such as when the defendant lacks financial resources, may not be ideal for a contingency fee arrangement.
- Counterclaims: Cases where the claimant has a
In summary, the decision to take on a commercial litigation case on a contingency fee basis involves a thorough analysis of the case’s merits, potential damages, collectability, and associated costs. It is a collaborative decision made with the client to ensure alignment with their goals and expectations.
I would be happy to discuss your specific case further to determine the most suitable fee arrangement. Please feel free to reach out to schedule a consultation.
Best regards,