In some cases, debt collection lawyers may offer contingency fee debt collection arrangements also known as no recovery, no fee collections. The debt collection process can include demand, mediation, arbitration, litigation and judgment enforcement. The availability of contingency fee debt collection depends upon the state’s and/or country’s rules and laws.
The good news for creditors looking for favorable fee arrangements in New York is that New York permits contingency fee debt collection.
The New York Rules of Professional Conduct cover lawyers’ responsibilities, conflicts, and conduct as well as define allowable fees, compensation for services, and underlying terms of client engagement.
When it comes to a New York lawyer’s ability to set fees, Rule 1.5: Fees and Division of Fees dictates:
A lawyer shall not make an agreement for, charge, or collect an excessive or illegal fee or expense. A fee is excessive when, after a review of the facts, a reasonable lawyer would be left with a definite and firm conviction that the fee is excessive.
The rule goes on to say lawyers can use contingency fees except in matters where a contingency fee is prohibited by paragraph or other law. Upon agreeing to a contingency fee, lawyers must provide their clients with a statement explaining how the fee is determined, this should include:
- The percentage(s) due to the lawyer in the event of settlement, trial, or appeal
- Litigation and other expenses to be deducted from the amount recovered
- Whether expenses will be deducted before or after calculating the contingency fee
The writing must clearly notify the client of any expenses they will be liable for regardless of the outcome of the case. Upon conclusion of a contingent fee matter, the lawyer must provide the client with a writing stating the outcome, any remittance to the client, and how those figures were determined.
Finding a Reputable Lawyer
The New York Rules for Professional Conduct Rule 1.1 defines competence as “having the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”
But how do you know if you have an experienced and competent contingency fee debt collection lawyer? To determine experience, you can search the New York courts’ website and see the types of cases and clients the collection firm has represented and the outcomes. You should also look at the firm’s website for testimonials, references, and the like.
If you have a debt collection matter that you need assistance with, contact Frank, Frank, Goldstein and Nager for a consultation. We have the experience that pays.
