Collection of Debts – How Does Contingency Basis Work?
Whether you have a small business with a few select clients, or you run a large business with dealings all over the state or country, it is very often that our clients have to deal with an unpaid invoice. Most frequently, the owing party just isn’t responding anymore. Whether it was financial difficulty, a dispute that went unresolved, or some other communication issue, our client is sitting there with a contract (oral or written), an invoice, but no payment. For busy business owners, chasing after a client that isn’t paying or communicating seems daunting. The longer they spend on the fee they are owed, the more good time it feels like they are wasting. That’s how our firm comes in – at Wakefield Law, we take over. We take the invoice, contract (if it exists) and go through other background information to open our file. Then, we proceed with our proven effective collection process. One question we get from a lot of new clients is how our arrangement can work if the debt isn’t a massive amount – that’s where contingency basis comes in to save the day.
What does it mean to hire a lawyer on a contingency basis?
Most attorneys work at an hourly rate, which usually requires the client to pay a retainer up front that the attorney will work against. Clients will get an invoice outlining the amount of time the attorney worked and a total amount withdrawn from the retainer based on that time sheet. Working on a contingency basis, however, is a very different process. Under this model, a lawyer’s fee is contingent upon the attorney’s ability to recover money for the client. The lawyer, if successful, receives a percentage of the recovery, rather than an hourly wage.
Do all attorneys offer a contingency basis option?
Not all legal work can be done on a contingency basis. Different law firms have different policies, and there are also some legal restrictions on when contingency billing can be used. At Wakefield Law, we work both on a contingency basis and at an hourly rate. The choice is always up to the client, but the majority of our collections work is done on a contingency basis.
Not all lawyers like working on a contingency basis. In fact, some refuse to do it altogether. There are a number of reasons for this, including that when an attorney works on a contingency basis, there is no guarantee that he or she will be paid for the work completed. However, at Wakefield Law, our experience and persistence with collections matters makes us confident in our choice to work on a contingency basis with the majority of our clients.
Collecting outstanding debts on a contingency basis
Hiring an attorney on a contingency basis makes legal recourse accessible for small businesses and individuals who do not have the resources or the inclination to engage the services of a lawyer on an hourly basis.
If you have been wasting your precious time and resources trying to collect outstanding invoices or personal debts on your own without success, you may want to consider hiring a collections attorney on a contingency basis. With very low up-front costs to cover filing fees and court costs, it is possible to hire an attorney now. Isn’t collecting a portion of the debt without any effort better than spending hours to collect nothing at all?
Still not sure how collection on a contingency basis would work for you?
If you have been considering getting some help with your accounts receivable, contact one of our experienced collection attorneys to learn more about whether hiring an attorney on a contingency basis could work for you or your company. We are always available with a free consultation. Give us a call at 703-771-9740.