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The Advantages of Merit-Based Contingent Fees

 

Merit-based contingent fees benefit accident victims in several ways.  First, the percentage of any recovery allocated to attorney fees is tailored to the specifics of the claim.  Second, because the strength, or merits of the claim, are determined in an open market the claimant receives important information concerning the value of the case. Third, claimants with weaker or lower value claims who are unable to find representation under the traditional contingent fee system may find a lawyer willing to take the case at a higher fee than that customarily used in the jurisdiction.  Finally, claimants with high-value claims pay lower attorney fees.

 

Currently, contingent fee percentages are largely set by custom.  Claimants are generally charged the standard fee used in the jurisdiction.  Rather than base the fee charged on the likely monetary value of the claim, the risk of losing the case,  and the predicted amount of time and effort required  to bring the claim to a successful conclusion, lawyers typically lump claims into one of two categories:  those they will accept and those they reject.  Accepted claims are assigned the standard fee: often 33 1/3% of any recovery, or more; rejected claims are those that the lawyer does not believe will generate a profit with representation undertaken at the standard fee.

 

The current contingent fee model incorporates two features now made obsolete by the Internet.  A standard contingent fee requires general acceptance by the legal community.  So long as the standard fee is generally applied, claimants gain no benefit from interviewing multiple lawyers to gain a price advantage.  The standard contingent fee fosters a decentralized system in which claimants are discouraged from visiting numerous law firms. The second requirement of the standardized fee system is the referral system.  Referral lawyers serve little purpose in the tort system other than to steer clients to trial lawyers in return for part of the fee charged the claimant. The referral fee typically ranges between 25-40% of the standard contingent fee. The standard contingent fee incorporates a referral fee whether a referring attorney is involved in the claim. Claimants are often told that having both a referring and a trial attorney involved in their claim doesn’t cost any more because the lawyers agree to split the standard fee.  This is true, however, only because the standard fee incorporates a referral fee whether or not a referring lawyer is involved. Because the standard fee is applied regardless of the presence of a referring lawyer, in fact, all claimants pay a referral fee premium and the only question is whether it goes to the trial lawyer or is split with a referring lawyer.

 

Merit-based contingent fees depend on an open market stripped of the inefficiencies plaguing the current system.  The Internet allows injury victims to market their claims in an open-market accessible by numerous lawyers. Lawyers set fees based on a review of case-specific documents, experience, and their interest in the claim.  Because lawyers and claimants initially communicate online,  referring lawyers are eliminated. Merit-based contingent fees do not contain the referral fee premium.  Claimants are rewarded with a market-rate contingent fee and an indication of the strength of their claim as assessed by the lawyers interested in their claim. Stronger, more valuable claims will be assigned a lower contingent fee percentage than those of lesser value or representing greater risk.

 

EagleFee.com is designed specifically to generate merit-based contingent fees. We are not a subscription based referral service limiting the marketing of claims to specific lawyers.  All lawyers capable of representing clients to the conclusion of a claim, including trial, are invited to participate in the process of establishing fair, market-based contingent fees. EagleFee is free to claimants.  Lawyers review claims without charge.  Lawyers wishing to submit proposals of representation to claimants are charged a small fee.  Claimants are free to pursue or reject proposals as they see fit.

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