Contingency Fees: Corporations as Plaintiffs

Typically, when a person hears the words “plaintiff” or “contingency fee,” they immediately think of personal injury cases. However, a growing trend for businesses tired of paying corporate lawyers $350/hour is to hire experienced plaintiff’s counsel on a contingency fee. After all, corporate defense attorneys spend their days defending cases (not prosecuting them), so having a seasoned plaintiff’s attorney in your corner can make a huge difference in the outcome of your case.

Simply put, a contingency fee means the lawyer is paid an agreed-upon percentage of the money recovered. In other words, no recovery means no attorney’s fees. For corporations, cash is king, so a contingency fee arrangement can be very appealing. Instead of your business shelling out thousands of dollars in unpredictable hourly attorney’s fees regardless of the outcome of the case, a contingency fee completely aligns the lawyer’s interest with the client’s interest. With an hourly attorney fee, the lawyer bills the client for every phone call, strategy meeting and trip to the courthouse, whereas, with a contingency fee structure, the lawyer and the client are in the same boat (they both want to recover as much money as possible).

Typical types of business/commercial litigation cases where companies can become plaintiffs and pursue their own damages are:

  • Breach of contract;
  • Unpaid accounts/bad debt (commercial collections);
  • Fraud or misrepresentation;
  • Defamation;
  • Tortious interference with business relations; and
  • Breach of fiduciary duty (i.e., bad financial advice given to the business);

If your company has incurred monetary damages, a representative from your business should speak with legal counsel immediately to determine the available legal rights.

*DISCLAIMER: This blog post is not legal advice, as each situation is dependent upon the facts and circumstances at hand, and any action should be taken only after consulting with an attorney.