Commercial Contingency Practice
Litigation is expensive. The traditional law firm model is based on the ever-increasing hourly billing rate. Lawyers and law firms are historically risk averse and prefer the certainty of the billable hour. In addition, individual lawyer compensation is generally tied to fees earned under a billable hour model and most law firm compensation models do not account for contingent fee work.
The Stolper Group is different. The firm offers a contingency fee option for business litigation. Under this fee model, clients do not have to pay attorneys’ fees until we prevail and the fees are paid solely from our recovery in any given case. We believe success in any business or endeavor is based on establishing partnerships, and that is where our approach to commercial and business litigation begins.
Benefits and Advantages to Contingency Fee Litigation
Traditional hourly billing can be expensive for businesses and individuals and often times presents a barrier to pursuing meritorious claims, or obtaining highly qualified and experienced legal counsel. The cost of litigation may also cause parties to accept unfair settlements.
Conventional wisdom is to view litigation as a drain on resources. Lawsuits are to be avoided if at all possible, something to pursue only as a last resort. Litigation, after all, places at risk precious resources. And rarely is the amount necessary to pursue successful litigation justified by the risks associated with the pursuit. Even well-funded companies have litigation budget constraints. Every dollar of expense is a dollar that negatively affects profitability.
Contingency fee options, also known as success-based or results-based fee options, can overcome these barriers and in some instances level the playing field against larger, better funded adversaries.
Under the contingency-fee structure, we assume the risk of the litigation and partner with our clients in the outcome. This results-driven model aligns the interest of our firm with our clients.
What Types of Disputes can be Handled on a Contingency fee Basis?
A contingency-fee can be appropriate in almost any business dispute. The following are a few examples where contingent fees may be particularly appropriate:
- A small business harmed by a larger organization but lacking the resources to fight back.
- A large company under tight legal budget constraints that needs a lawyer/partner to share risk.
- A claim for damages caused by the breach of a contract.
- A claim for insurance coverage where an insurance company wrongly denied such coverage.
- A claim against a competitor for unfair competition, tortious interference or misappropriation of trade secrets.
- A claim for royalties and other economic damages based on wrongful use or infringement of intellectual property (e.g., patents, trademarks, copyrights).
It is said that lawyers and law firms that accept business cases on a contingent-fee basis are more entrepreneurial and thrive on risk. Our Firm has had success handling various types of business litigation matters on a contingency or success fee basis because we are equipped to properly evaluate outcomes. Each commercial lawsuit involves different levels of risk. Not every business litigation case is appropriate for a contingent fee arrangement. The contingent-fee cases we typically handle are complex and frequently involve first-rate opposing lawyers with well-heeled clients who are able to vigorously defend serious claims. These cases generally require a significant investment of our time and resources over long periods. So any case we accept must present the prospect of a recovery justifying the dedicated effort it will take to be successful.
The following criteria that we consider to determine if a business litigation case is appropriate for a contingent-fee arrangement includes the following:
A client with the time and commitment necessary to see the dispute to conclusion. We are not afraid to be compensated based on the results we obtain rather than the number of hours we spend representing our clients. We cannot, however, achieve success without the full commitment of our clients. Business litigation can be protracted and before we agree to handle any matter on a contingent-fee basis, we must be assured our clients are able to commit the time and effort necessary to help us achieve a successful result.
A strong case for liability. This requires an analysis of the facts demonstrating a potential defendant indeed did something wrong and should be ordered to pay damages. The stronger the case is for liability, the more likely it is suitable for a contingent-fee arrangement.
A significant up-side recovery of damages. This requires an analysis to determine, if liability is established, what monetary recovery is likely. The likely damages recovery must be sufficient to justify the work and investment we believe will be necessary to achieve a successful outcome.
A defendant able to pay a judgment or award in the appropriate amount. This requires an analysis of the ability of a defendant to pay. It would be a hollow victory if we were successful in establishing liability and damages only to learn a defendant is unable to pay.
While we are very selective in the contingent matters we pursue, we are confident in this risk sharing fee model based on our extensive experience and success with cases on a no-win, no-fee basis. We have the resources and expertise to work together to develop a billing arrangement that makes the most sense for our clients.
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