The Differences Between Contingency Billing and Hourly Billing | California
Clients have often asked me about contingency cases versus hourly cases. They’re something that I firmly believe in because there are risks in both hourly cases and contingency cases. In hourly cases, you have the risk of an attorney, and I’ve seen it time and time again, where attorneys are billing by the hour. They’re racking up a legal fee that is just going to pad their budget. In the contingency land, there’s a risk with clients, because sometimes clients are not telling their attorney all the skeletons that are in their closet. An attorney and their staff may do diligent work on a case, only to find out that there is a fatal flaw in their client’s defense or offense far too late down the road. The law firm has risked their livelihood in order to prosecute or to defend the matter to no avail. So those are concerns on both the contingency side with unscrupulous clients, and on the hourly side with some unscrupulous attorneys. In my mind, from a plaintiff’s point of view, and a plaintiff’s point of view only, you can choose to do a hybrid of the two. This works fairly well for many of our clients, where the client pays a percentage of our hourly rate, and the firm has an interest in the outcome. In this relationship, in my mind, there is a truly mutualistic relationship, where the client has an invested interest, the attorney has an invested interest. There is skin in the game from both sides to make something work, and to make it work as quickly and as rewarding as possible. This is something that I think is under utilized in the legal industry. As long as you’re a plaintiff, or you’re a defendant seeking a recovery in a cross complaint, this can be a very meaningful and sensical way to draft an engagement letter and have a fee agreement.