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Contingency Fee Contracts Offer Solutions for Your Small Business

Many companies face outstanding balances or contract disputes with damages too small to justify the expense of tens of thousands in legal fees and costs.  By engaging in traditional by the hour commercial litigation, your company assumes the risk of costing your business more in attorney fees than it stands to recover if successful.  An alternative solution is to take advantage of contingency fees offered by experienced trial law firms.  

For example, if your company experienced a breach of contract that caused $10,000 in damage and the litigation to recover the money requires 20 hours of legal work at $200 an hour to collect a compromised amount of $7,000, your company paid $4,000 to collect $7,000.00, essentially recovering $3,000.00.  Under a traditional contingency fee model and assuming the same recovery, your company generated an approximately $700 greater return without the risk of paying $3,000 in fees.  More importantly, your company was able to use the cash without constricting the funds to litigation expenses.

Rather than face the risk of attorney fees combined with your business loss, contingency fees take the uncertainty out of the classic lawyer answer, ‘It depends.’  Most lawyers that handle these types of cases provide contingency fees on a step up basis for your company.  Other possibilities include a hybrid fee/ contingency arrangement where a small retainer is balanced with a reduced contingency fee.  

Michael Sudekum is an attorney with Schlueter, Mandel & Mandel, LLP, a civil litigation firm with attorneys licensed in Missouri and Illinois.  The attorneys have experience litigating against small companies to multi-national corporations.  It is one of the few law firms in the area to be rated “A.V.” in the field of personal injury by Martindale Hubbell.  If your company, family or a friend needs help with a breach of contract or commercial matter, please contact us for a free case review.