Using A Contingency Collection Attorney

I am not a lawyer, I am a judgment referral expert (Judgment Broker). This article is based on my opinions and observations about using a contingency collection attorney to enforce a money judgment. Every state has different laws, and this article is not legal advice.

The word contingency means uncertainty, and implies the assumption of a risk. Most lawyers charge by the hour, because that eliminates most of their risk of not being paid for their work, and for any incurred expenses.

A contingency collection lawyer charges some or all of their fees as a percentage of a successful collection. They usually take judgments only if the judgment debtor appears to have assets, and the risks of not being able to enforce the judgment seems to be minimal and reasonable.

Enforcing a judgment always includes a financial risk. The time and expenses incurred may not result in any collected money, and sometimes one can spend more money than one can collect. Because of this, most lawyers will only collect a judgment when they are paid a retainer upfront, and then on an hourly basis.

Of course, almost everyone wants their judgment recovered on a pure contingency basis, meaning the lawyer will advance their time and expenses, and not charge anything until the judgment is recovered. In a pure contingency retainer agreement, the lawyer gets their costs repaid to them off the top, before splitting the recovered money with their judgment creditor client.

The smaller (and riskier) the available judgment debtor's assets appear to be, the less likely an attorney will collect a judgment on a pure contingency basis.

Everything is negotiable, and depends on the details of the situation. Some judgments might be strong enough that a contingency recovery attorney might recover the judgment with a pure contingency retainer agreement. With other judgments, the lawyer may want their client to pay some or all of the expenses, and the attorney's time is usually reimbursed on a contingency basis.

Some (most?) judgments do not have sufficient available judgment debtor assets for the judgment recovery attempt to be performed on any type of contingency basis. In this case, one must pay a retainer, and by the hour, and pay all expenses - or find a regular (non-lawyer) contingency judgment enforcer.

Another option is to try to sell your judgment for cash upfront, but if an attorney will not recover a judgment on a contingency basis, the judgment is probably worth very little cash up-front.

Contingency rates also vary, depending on the strength of the debtor's assets. A large judgment against a wealthy judgment debtor might have a contingency rate of 30% for the attorney and 70% to the judgment creditor. A riskier-looking judgment might be 70% to the attorney and 30% to the judgment creditor. With the same judgment, one lawyer might absorb all expenses, and charge 50% on a contingency basis, while another might charge only 25%, and require their client to pay a retainer upfront, and some or all expenses as they are incurred.

There are some that believe that an lawyer cannot advance any expenses on behalf of their clients. I am not a attorney, but based upon my friendship with hundreds of contingency recovery lawyers, I believe that is not correct. Anything a lawyer and their client agrees to in the attorney's retainer agreement goes.

If an lawyer was unable to advance fees, a personal injury lawyer could not do business. Nevada's rules of professional conduct, Rule 1.8(e) covers this, and other states probably have a similar rules.

Lawyers generally cannot provide financial assistance to their clients, but there is a specific exception for an lawyer advancing court costs and other expenses of litigation when the payment of legal fees are contingent on the outcome of the case or collection of a money judgment. Again, I am not an attorney. A PDF of the rules of New York, covers this, section (e), at: (http://bit.ly/igm4vr).

Recovering a judgment always depends on the judgment debtor. If there are no current or future (or discoverable assets) of the judgment debtor, not even the best contingency attorney (or most anyone else) could ever recover money from your judgment debtor.

In such a hopeless case, the lawyer will have invested a lot of their time and money into the hopeless judgment recovery effort. If you want your judgment back (hopeless or not), you may have to have to repay the lawyer for their incurred costs.


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Mark D. Shapiro - Judgment Broker - Free leads for Judgment Enforcers and contingency collection attorneys.
http://www.JudgmentBuy.com - is the judgment super-site where Judgments quickly get Purchased or Enforced!