Certified Legal Professional (CLP) Practice Exam

In the personal injury settlement, what was the contingency fee structure agreed upon by the client and the attorney?

1. Fixed fee for all services

2. A sliding scale based on recovery outcomes

3. A percentage-based fee based on recovery

4. A flat hourly rate

The correct answer is: A percentage-based fee based on recovery

In personal injury cases, it is common practice for attorneys to work on a contingency fee basis. This means that the attorney's fee is directly tied to the outcome of the case. When a percentage-based fee structure is agreed upon, the attorney will receive a specific percentage of the amount recovered on behalf of the client, which incentivizes the attorney to maximize the recovery since their payment depends on the success of the case. This arrangement is particularly beneficial for clients, as it allows them to access legal representation without the need for upfront payments. Clients typically only pay the attorney if they win the case or settle, making legal services more accessible to those who might not otherwise afford them. In contingency agreements, the percentage is usually predetermined and can vary depending on the case's complexity and potential risks involved. Other options such as a fixed fee or flat hourly rate are less common in personal injury cases because they may not align the lawyer’s interests with those of the client, possibly leading to clients feeling pressured or unable to pursue legitimate claims if upfront costs are prohibitive. A sliding scale based on recovery outcomes may provide some flexibility but does not capture the typical percentage model that is standard in personal injury settlements.