Business Contingency Cases

Contingency fees are often a key component in cases that have the
potential for a very high payoff for the client that does not have the
resources or desire to pay a law firm by the hour.

A contingency fee is the cost of legal representation when payment
to an attorney is based upon a percentage of what a client receives in
a settlement or judgment. While contingency cases are well-known to the
public in the personal injury realm, business contingency cases can
also be extremely viable for clients that have a business law issue. In
either specialty, when a case comes along that a company does not have
the resources to pay thousands, if not millions, of dollars in legal
fees, the case is frequently dropped out or not engaged initially out
of economic necessity. Contingency fees allow these cases to be pursued.

The trick of expertly handling contingency cases is to combine
large-firm expertise with small-firm attention while reducing overhead.

The best business law firms in a given state or region are renowned
for successful outcomes achieved in at least one or two, and preferably
several, well-chosen contingency cases. Certain prudent firms versed in
business contingency cases may carry three or more promising
contingency cases at all times. A single such case may consume up to 20
percent of a firm’s available time, but typically generates between 40
and 50 percent of the same firm’s revenues.

The crucial part of any business firm’s contingency strategy is that
these cases must be well chosen. The ideal formula is to have a
relatively small number of such cases in the game, as a loss in a
time-consuming and hard fought contingency case could seriously impair
even the most aggressive firm’s bottom line.
Financial thresholds for a contingency-based case can range from tens
of thousands to several million. Once an appropriate financial range is
established, the case must be thoroughly analyzed and determined to be
financially viable with sound prospects for success, assuming that the
matter is deemed substantive enough to go to trial.

Legal vehicles such as blended contingency models, in which a fee
consists of discounted hourly rates and a significant percent of the
recovery, are considered the most useful, although individual
negotiation is recommended so that the client is satisfied at the
outset.

Jack Zinda is an Austin business lawyer with Heselmeyer Zinda, PLLC. To learn more about Austin business attorney Jack Zinda visit Texasbusinessattorneys.net.