There exist three basic ways that attorneys bill or charge clients for legal services. There is flat fee billing; for example, when an attorney charges X amount of dollars to create a basic will for a client. Next, there is hourly billing. In these fee arrangements, the attorney provides his or services at an hourly rate and bills the client for time spent working on the legal issue. Contested divorce cases are a good example of when attorneys bill by the hour. Lastly, there can be a contingent fee arrangement between the attorney and client.
When the attorney engages with a client on a contingent fee basis, the attorney is saying that he or she will not bill the client unless the client’s case is successful. Meaning, if the attorney wins the case and the defendant is required to pay compensation, the attorney receives a percentage of that compensation as payment for legal services. In some instances, the client may be required to pay litigation costs (i.e. the court fee for commencing litigation) even if the plaintiff’s claim is unsuccessful.
Our experienced Hudson medical malpractice attorneys engage malpractice plaintiff’s on a contingent fee basis. The norm in the industry is to bill in this manner when taking on a medical malpractice case. Like all attorney fee arrangements, contingent fee agreements must be in writing and acknowledged by the client. The agreement must also indicate if court fees and other costs will be deducted from the award prior to or after taking out the percentage owed to the attorney.
The state of New York places limitations on attorneys in regard to how high the contingent fee percentage can be. The limitations are laid out in N.Y. Judicial Law section 474-a, titled contingent fees for attorneys in claims or actions for medical, dental or podiatric malpractice. The contingent fee rules laid out in this statute are as follows:
- Medical malpractice awards up to $250,000: The attorney can charge no more than a 30% contingency fee.
- Awards in excess of the above up to another $250,000: The contingent fee for this portion cannot exceed 25%.
- The next $500,000 in excess of the above can only be charged at a maximum 20% rate.
- The next $250,000 can only be charged a maximum 15%
- Any jury award amount in excess of $1.25 million can only be charged at a maximum 10% rate.
By way of a short example, consider the following. A jury awards the injured patient $300,000. The attorney can receive 30% of $250,000 and then 25% of $50,000. This structure allows the plaintiff to keep more of the jury award for her/himself.
But what do you think? I would love to hear from you! Leave a comment or I also welcome your phone call on my toll-free cell at 1-866-889-6882 or you can drop me an e-mail at [email protected] You are always welcome to request my FREE book, The Seven Deadly Mistakes of Malpractice Victims, at the home page of my website at www.protectingpatientrights.com.