A blended contingency fee agreement is a type of legal fee arrangement that combines a traditional contingency fee with an hourly rate. This type of agreement is becoming increasingly popular in the legal industry as a way to balance the risk and reward for both the client and the attorney.
Contingency fees are commonly used in personal injury and other types of cases where the client cannot afford to pay upfront legal fees. In a contingency fee agreement, the attorney agrees to represent the client for a percentage of the recovery (usually around 33%), but only if the case is successful. If the case is not successful, the attorney does not receive any payment.
While contingency fees can be a great option for clients who cannot afford to pay for legal services upfront, they can also be risky for attorneys. If the case is not successful, the attorney may have invested significant time and resources without any payment. This is where a blended contingency fee agreement comes in.
In a blended contingency fee agreement, the attorney and client agree to a reduced hourly rate in addition to the contingency fee. This hourly rate is typically lower than the attorney`s standard rate and serves as a way to offset some of the risks associated with the contingency fee.
For example, let`s say an attorney normally charges $300 per hour for their services. In a blended contingency fee agreement, they may agree to a reduced hourly rate of $150 per hour, along with a contingency fee of 25% of the recovery. If the attorney spends 100 hours on the case and the recovery is $100,000, they would receive $25,000 as the contingency fee, as well as $15,000 for the 100 hours of work at the reduced hourly rate.
Blended contingency fee agreements provide a way for clients to obtain legal representation without worrying about upfront costs. They also provide a way for attorneys to mitigate some of the risks associated with contingency fees while still offering a fair and competitive fee structure for clients.
It`s important to note that not all cases are suitable for a blended contingency fee agreement. Attorneys and clients will need to assess the specific facts and circumstances of each case to determine the best fee structure. If you`re considering a blended contingency fee agreement, it`s recommended that you seek the advice of an experienced attorney who can help you navigate this complex area of law.