Pro Bono vs. Contingency with Steven Wilder
#AskStevenWilder
A new client recently asked me why how often I provide pro bono personal injury law services. When I asked why they thought I provided pro bono services, they replied ‘your commercials say that people don’t pay unless you win and nobody wins every time’. Clearly, they were confused between pro bono services and contingency fee agreements.
So what is the difference between a contingency fee agreement and pro bono services? Pro bono services are completely free of charge. Pro bono is really a lawyer donating their time and expertise to a person or cause, with no expectation of payment, regardless of outcome. Although pro bono services can be offered in any area of law, contingency fee agreements are not permitted for criminal or family law matters and are generally only found in personal injury law.
So why do personal injury lawyers accept contingency fee retainers, instead of billing by the hour like most other lawyers? Do they win every time? Unfortunately, no, they do not win every time. However, in order to make their services affordable for accident victims, personal injury lawyers need a different billing model.
Most people do not plan on getting into an accident, nor do they prepare for the aftermath. When an accident happens, people often find themselves in dire financial circumstances and they don’t have money to pay a lawyer to help them with their claim. Knowing this, personal injury lawyers generally agree to take a percentage of what they recover for the client, instead of billing by the hour.
In addition to fees, there is HST on the fees and also disbursements, which are expenses that your lawyer will pay to develop your claim. Common examples of disbursements include medical records, insurance files and the police report. Upon successful settlement of the claim, the client will pay the lawyers fees, HST and disbursements from their settlement.
It is important to remember that not all contingency fee agreements are the same. Some lawyers charge higher percentages for their fees. Some lawyers require you to prepay for some disbursements. As such, before signing a contingency agreement, make sure that you read and review it, ask any questions you may have and have a clear understanding of what potential consequences exist. No two lawyers are the same and neither are contingency fee agreements. The one thing all contingency fee agreements have in common is that they are definitely not pro bono.