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Guide to the Law Firm’s Approach for Contingency Cases
Each year, our law firm accepts a limited number of employment cases on a contingency basis. Under a contingency arrangement, the client pays legal fees only from a settlement or verdict obtained in the case. While this is a traditional arrangement in personal-injury practices, it is less common in employment law because employment cases can be more time-intensive, more difficult to predict, and more costly to litigate.
We generally categorize our cases as follows:
Strict Hourly Cases
These are employment matters in which the firm is not being retained to pursue a monetary recovery. Examples include responding to proposed discipline, addressing a security-clearance issue, managing a Performance Improvement Plan, attempting to obtain a reasonable accommodation for a disability, or defending a client who has already been sued. These matters are handled on an hourly basis.
Hybrid Fee Arrangement Cases
These cases involve a combination of fees paid by the client and a contingency fee based on any settlement or verdict. The client generally pays a reduced hourly rate, often subject to an agreed-upon fee cap, while the firm accepts a contingency fee on any recovery. This is the most common fee arrangement the law firm uses.
This arrangement works well for wrongful-termination, discrimination, and retaliation cases, including cases involving private employers as well as against federal, state, or local government employers. Whether a particular case is accepted on a hybrid or pure contingency basis depends on the strength of the claims, the potential recovery, the available evidence, the anticipated amount of work, and other factors. Compared with many personal-injury cases, employment cases are often more time-intensive and less financially predictable. Although some employment laws permit a prevailing plaintiff to recover attorney's fees, those fees are not guaranteed and may themselves become the subject of litigation. A hybrid arrangement therefore allows the firm and the client to share some of the financial risk while maintaining a significant contingency component tied to the ultimate outcome. The particular hybrid fee arrangement depends on factors such as: (a) whether the case is against a large company or a government entity; (b) the damages recoverable; (c) the strength of the evidence presented to the law firm.
Pure Contingency Cases
We accept a smaller number of cases on a pure contingency basis, where the client invests nothing out of pocket. These cases generally must involve a substantial potential recovery, strong facts, and documentary or other evidence that can support the client's claims. The anticipated amount of work required to pursue the case must also justify the financial risk to the firm.
Pure contingency cases generally involve financially sound private companies rather than federal, state, or local government employers. Government employment cases can involve lengthy administrative and litigation processes that may make a pure contingency arrangement economically impractical, even when the underlying claim has substantial merit.
Large severance disputes can be particularly well suited to a pure contingency arrangement when a substantial amount of compensation is at stake and the client's entitlement can be supported by a contract, written communications, or other evidence. Ultimately, our decision whether to accept a case on a pure contingency basis depends primarily upon the potential recovery, the strength of the evidence, the likelihood of success, and the amount of work the case is expected to require.
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