"No Win No Fee": What Does It Mean?

     “No Win No Fee” is a general reference to a contingent-fee agreement. A contingent-fee agreement is a contract between an attorney and client that describes how the attorney is to be paid for his or her work. Under a pure contingent-fee agreement, the attorney receives a fee only when the contingency is met—usually when the client recovers money from the opponent. Thus, “no win no fee” is an apt description. Without a recovery for the client, no fee is owed to the attorney.  It may also be referred to as a "success fee."  

     Except when prohibited by law (such as in criminal defense or some family law cases), contingent-fee agreements can be used in a variety of situations. It is important for the client to understand that, like most contracts, the terms of a contingent-fee agreement are negotiable. Negotiable terms may include the work the attorney is expected to do, the attorney’s percentage of the recovery, who will advance the case expenses, how those expenses will be subtracted from the recovery, and how any non-cash recovery will be valued. Because these terms are negotiable, the client who is shopping for legal services may want to have a disinterested attorney review the proposed contract to ensure that it meets the client’s needs.

     For more information this topic, please contact any of the firm’s partners at mmellp.com.

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Stuart - October 24, 2008 7:58 PM

When can a business entity use a contingent fee agreement?

Mike Myers - October 27, 2008 11:24 AM

A business entity may use a contingent-fee agreement in virtually any situation. If the entity is positioned as a plaintiff (for example, when its patent is infringed, a contract is breached, or its property is damaged) it may decide to use a traditional contingent-fee agreement where the attornery receives a percentage of the recovery, if any, from the suit.

If the business entity is a defendant (meaning that it has been sued), a contingent-fee agreement is still an available option. It may inquire into a "negative" contingent fee in which the attorney is paid based on the amount he or she diminishes the plaitniff's claim. It may also inquire into a blended fee in which the attorney is paid a partial hourly rate and a success fee if the case goes well.

As with most contracts, the terms of a contingent-fee agreement are negotiable. A business entity looking to employ an attorney on a contingent-fee basis is therefore limited only by its needs and creativity.

Kevin - November 4, 2008 11:30 AM

What percentage does a law firm usually get from a contingent fee? Is it negotiable?

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