A conditional fee agreement (CFA) is a contract between a client and a legal professional that outlines the terms of their relationship, including the fees to be charged and the conditions under which those fees will be paid. In essence, a CFA is a contingent fee agreement, meaning that the legal professional’s fees are contingent upon the outcome of the case.
Key Components of a CFA
A well-structured CFA should include the following essential components:
1. Identification of Parties
Clearly identify the client and the legal professional who will be handling the case. Include their full names and contact information.
2. Scope of Representation
Define the specific legal services that will be provided. This should include a detailed description of the nature of the case, the goals to be achieved, and the specific tasks that will be undertaken.
3. Fees and Disbursements
Outline the fee structure, including the basis for calculating fees (e.g., hourly rate, contingency fee, fixed fee). Specify whether there will be additional charges for disbursements (e.g., court costs, expert witness fees).
4. Contingency Fee Arrangement
If a contingency fee is being used, clearly state the percentage of the recovery that the legal professional will receive. This should include any deductions for costs and expenses.
5. Success Fee
If applicable, outline the terms of any success fee that may be charged in addition to the contingency fee.
6. Payment Terms
Specify how and when fees will be paid. This may include provisions for interim payments or retainer fees.
7. Client’s Obligations
Clearly outline the client’s obligations, such as providing necessary information, cooperating with the legal professional, and paying any agreed-upon retainer fees.
8. Termination of the Agreement
Describe the circumstances under which the agreement may be terminated, such as by mutual consent or upon completion of the case.
9. Governing Law and Jurisdiction
Specify the governing law that will apply to the agreement and the jurisdiction in which any disputes will be resolved.
10. Entire Agreement
Include a clause stating that the CFA constitutes the entire agreement between the parties and supersedes any prior or contemporaneous communications.
11. Modifications
Provide for the possibility of modifying the agreement in writing, with the consent of both parties.
12. Attorney’s Fees in Case of Breach
If applicable, include a provision that allows the legal professional to recover attorney’s fees if the client breaches the agreement.
13. Dispute Resolution
Specify the method for resolving any disputes that may arise between the parties, such as mediation or arbitration.
14. Client’s Acknowledgment
Include a statement acknowledging that the client has read and understood the CFA and agrees to its terms.
15. Signatures
Obtain the signatures of both the client and the legal professional to indicate their acceptance of the agreement.
Design Elements for Professionalism and Trust
To create a CFA that conveys professionalism and trust, consider the following design elements:
Clear and Concise Language: Use plain language that is easy to understand. Avoid legal jargon that may confuse the client.
By carefully considering these elements, you can create a CFA that is both professional and effective.
