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Contingent Fee Arrangement Aligns Best Interests of Commercial Litigation Clients and Attorneys

By January 28, 2013July 18th, 2018Commercial Litigation & Class Actions

Most businesses historically have paid their attorneys by the hour. Today, there is a growing trend to consider other options, particularly for commercial litigation. This trend is likely to continue because it is based on sound business principles.

For good reasons, businesses are litigation adverse. Litigation diverts personnel and resources from productive uses. As a result, it is often in a company’s interest to resolve commercial litigation quickly and efficiently. By contrast, law firms that bill by the hour have a financial interest to prolong litigation and make it as cumbersome and complex as possible. The longer and more complex the litigation, the more litigators who bill by the hour get paid. This inherent conflict is a primary reason many companies now are moving to alternative fee arrangements with commercial litigation counsel.

The alternative fee arrangement that best aligns the interests of the company and its litigation counsel is a contingent fee. Under a contingent fee arrangement, the litigator receives a percentage of the total recovery. The better the result achieved for the client, the more the litigator gets paid. The contingent fee litigator has no incentive to prolong or unnecessarily complicate the case. The more promptly the case is resolved or tried, the more promptly the contingent fee litigator gets paid. The only out-of-pocket costs for the company are the litigation expenses, which typically are minimal compared to hourly rate fees.

Attorneys at Gray, Ritter & Graham, P.C. have represented businesses in commercial litigation for decades, and do so on a continent fee basis. We would be happy to speak with you about any substantial business litigation case you believe is meritorious.