Education is when you read the fine print.
Experience is what you get if you don’t.
– Pete Seeger
- What is a contingency fee contract?
- Who is responsible for costs?
- What is a straight time contract?
- Are there other means of engaging legal services?
- When would a particular fee arrangement be applicable?
- Are there other types of fee arrangements?
- Are there means of settling disputes other than through litigation?
- What is mediation?
- What is arbitration?
- What is a mini-trial?
- Why do I need an attorney?
- How do I find an attorney?
- Will an attorney tell me what to do?
- What is a Limited Liability Company?
- What is Board Certification?
- What is an AV Rating?
What is a contingency fee contract?
A contingency fee contract is a contract between attorney and client where the attorney is paid
for their services with a percentage of the money recovered for the client.
The client is ultimately responsible for costs. The attorney may advance certain costs on the
client’s behalf, or may require the client to advance the costs before
committing the obligation. In some instances, the costs may be paid for out of
the client’s portion of the recovery. Under Texas
law, any contingency fee arrangement between attorney and client should be
reduced to writing, and the basis for allocating costs set forth in the
What is a straight time contract?
A straight time contract is a contract between attorney and client where the attorney is
paid for their services on an hourly rate basis. Other billable services, such
as paralegal support services, may also be included in the contract.
Are there other means of engaging legal services?
Some services may be performed on a fixed fee basis, where a specific service carries a specific
fee. Other services may be performed on a mix of contingent fee and straight
A contingent fee contract usually applies in
litigation where liability and damages are clear but collection may be
questionable, or where liability and damages are questionable but collection is
clear. There the attorney is taking the risk of failure.
A straight time contract applies in litigation,
where the services are in defense of the client, or where there is little, or
no, chance of a monetary recovery under any circumstances. It is also used in
transactional matters; i.e. contract preparation, purchase and sale of a
A mixed fee contract applies in litigation
where both liability and damages, and chances of collection are questionable.
There both attorney and client share a portion of the risk of failure. Both the
fees for straight time, and the contingent percentages, are reduced from their
There are contracts where attorney’s compensation is tied as a bonus to performance; e.g. defending a claim for
damages of $100,000.00 and getting it reduced to $25,000.00 with the attorney
getting a percentage of the reduction from the original claim. That is a type
of bonus reverse contingency fee contract, and is usually tied to a straight
time contractual basis at a reduced rate.
Mediation is a method inducing all parties to
reach a mutually satisfactory settlement. It is a purely voluntary
procedure, and becomes binding only when a settlement agreement is reduced to a
document signed by the parties. The mediator’s function is to facilitate the
possibility of settlement.
Arbitration may be compulsory, if made a
contractual requirement between the parties. There the parties present their
arguments and evidence to an arbitrator, or a panel of three arbitrators, and
the arbitrator(s) make a ruling as to what the judgment will be. That judgment,
made by the arbitrators, is final and not appealable, save for very limited and
A mini-trial is a procedure where the parties
present their arguments, and provable evidence, to a panel of experienced
lawyers. The panel then presents their opinion as to what the results would
probably be if presented to a judge and jury in a formal trial. That opinion,
although not binding, frequently leads to settlement discussions between the
You don’t! The law allows individuals to
represent themselves in litigation. But litigation is procedurally complex, and
a misstep could cost you the lawsuit. The only safe area is in Small Claims
Court, where the rules are waived for the individual.
When you engage a lawyer, you are getting an
individual who is bound to zealously advocate your position, and who bears a
fiduciary duty to you. The lawyer is either knowledgeable in the area of
practice so engaged, or will become competent in that area of practice in order
to properly handle their duties to you.
Unless you are willing to put forth the time
and effort to become competent in the areas of law and procedure that apply, so
you can conduct yourself with the same competence as an attorney, engaging a
lawyer is the surer and safer course of action.
Speak with friends and acquaintances that
have had similar problems, and see if they’ve used an attorney to help resolve the
matter. If so, were they satisfied with the services rendered and would they
recommend that attorney? Speak with others that have had to use an attorney,
and see if they’d recommend that attorney. If recommended, speak with the
attorney and see whether they handle matters similar to yours, and whether you
feel comfortable with that attorney or law firm.
If the attorney does not handle matters
similar to yours, ask if they can recommend other attorneys that may handle
matters similar to yours. Then speak with those that are recommended,
continuing the process until you have an attorney, or attorneys, with whom you
An attorney is a counselor. They can advise
on the legal ramifications of a given course of action, and explain what risks
may be associated with that action. They can examine options and advise which
options carry the greater or lesser risk. Decisions, other than decisions on
purely legal matters, are always left up to the client. Decisions on legal
matters are reserved to the attorney, although those decisions are usually
discussed with the client beforehand.
The limited liability company [hereinafter
LLC or LC] is neither a corporation nor a partnership; rather, it is a distinct
type of entity that shares the characteristics and powers of a corporation and
a partnership. The owners of an LLC are called “members”;
the provisions relating to the management of the affairs of the LLC are called “regulations”.
Members may be individuals, partnerships,
corporations, and any other type of legal entity. Under the provisions of the
Texas Tax Code, a limited liability company is subject to state franchise tax.
The business of an LLC is controlled by an internal company document called an
Operating Agreement. That document is
roughly the equivalent of a corporation’s bylaws.