A Contingency Fee Agreement is a legal contract between an attorney and a client. It outlines the terms of their professional relationship, particularly the fee arrangement, which is based on a percentage of the recovery obtained by the attorney on the client’s behalf. This guide will provide you with the essential elements to create a professional and legally sound contingency fee agreement template.
Essential Elements of a Contingency Fee Agreement
1. Parties to the Agreement
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Client Information:
Full legal name
Address
Phone number
Email address
Attorney Information:
Full legal name
Law firm name
Bar admission number
Address
Phone number
Email address
2. Scope of Representation
Clear Description of the Legal Matter:
Provide a detailed overview of the legal issue or claim.
Specify the jurisdiction where the matter will be litigated.
Attorney’s Responsibilities:
Outline the specific services the attorney will provide.
Detail the extent of the attorney’s involvement in the case.
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3. Contingency Fee Percentage
Percentage Rate:
Clearly state the percentage of the recovery that the attorney will receive as a fee.
Specify whether the percentage applies to the gross recovery or the net recovery after expenses.
Fee Calculation:
Explain how the fee will be calculated, including any deductions for costs and expenses.
Consider whether the fee will be a flat percentage or a tiered structure.
4. Costs and Expenses
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Client’s Responsibility:
Clearly outline the client’s responsibility for costs and expenses, such as filing fees, expert witness fees, and investigation costs.
Specify how these costs will be advanced or reimbursed.
Attorney’s Responsibility:
If applicable, indicate any costs or expenses that the attorney will advance or pay on the client’s behalf.
Detail how these costs will be recovered, either through a deduction from the recovery or a separate billing.
5. Reimbursement of Costs and Expenses
Reimbursement Terms:
Specify the terms under which the client will reimburse the attorney for costs and expenses advanced.
Consider whether the reimbursement will be made in full or pro-rated.
Interest on Reimbursements:
If applicable, outline any interest that may accrue on unreimbursed costs and expenses.
6. Termination of Representation
Client’s Right to Terminate:
Clearly state the client’s right to terminate the agreement at any time.
Specify the conditions under which the client may terminate without incurring liability for costs and expenses.
Attorney’s Right to Withdraw:
Outline the attorney’s right to withdraw from representation under certain circumstances, such as non-payment of fees or failure to cooperate.
7. Division of Settlement or Judgment Proceeds
Allocation of Fees and Costs:
Clearly explain how the recovery will be divided between the attorney and the client.
Specify the order in which fees, costs, and expenses will be deducted.
Tax Implications:
Briefly discuss the potential tax implications of the recovery and any applicable tax laws.
8. Governing Law and Dispute Resolution
Governing Law:
Specify the jurisdiction whose laws will govern the agreement.
Dispute Resolution:
Outline the dispute resolution mechanism, such as mediation or arbitration, in case of disagreements between the parties.
9. Entire Agreement
Integration Clause:
State that the agreement constitutes the entire understanding between the parties and supersedes all prior agreements or representations.
10. Modifications and Amendments
Written Modification:
Require any modifications or amendments to the agreement to be in writing and signed by both parties.
11. Attorney’s Lien
Lien Rights:
If applicable, state the attorney’s right to assert a lien on the recovery to secure payment of fees and costs.
12. Signatures
Signatures of Both Parties:
Require both the client and the attorney to sign and date the agreement.
Design Elements for a Professional Template
Clean and Professional Layout:
Use a clear and easy-to-read font, such as Times New Roman or Arial.
Maintain consistent formatting throughout the document.
Use headings and subheadings to organize the content.
Clear and Concise Language:
Use plain language and avoid legal jargon.
Define any technical terms that may be unfamiliar to the client.
Bold and Italic Formatting:
Use bold and italic formatting to emphasize key points or important terms.
White Space:
Use ample white space to improve readability.
Professional Logo:
Include your law firm’s logo at the top of the document.
By carefully considering these elements, you can create a professional and effective contingency fee agreement template that protects your interests and provides clarity for your clients.