Defense Firms Respond to Increased Competition, Move into Contingency Fee Work
A few months ago, I wrote about the changing economics that were encouraging, if not forcing, defense firms to take contingency cases that were traditionally the work of plaintiffs' firms. In this month's issue of Litigation Update, which is published by the American Bar Association's Section of Litigation, Stewart Weltman has written an article entitled Contingency Litigation 101 -- for Big Firms, which identifies several strategies for firms that are considering a move into contingency fee litigation.
As Mr. Weltman points out, "to be more competitive and obtain prime litigation matters, firms that never considered contingency are more receptive to some form of it as part of their compensation for both plaintiff and defense matters." The significance of this development is that not only are defense firms competing against plaintiffs' firms for work, but they are having to adapt their own compensation structure from hourly fees to contingency work. The competition works both ways: defense firms can represent plaintiffs, but corporations are frequently turning to plaintiffs' firms for representation in defense matters, because of the client's concern about cost or because the plaintiffs' firm may be more flexible in what it can charge and how and when it gets paid.
As Mr. Weltman points out, "to be more competitive and obtain prime litigation matters, firms that never considered contingency are more receptive to some form of it as part of their compensation for both plaintiff and defense matters." The significance of this development is that not only are defense firms competing against plaintiffs' firms for work, but they are having to adapt their own compensation structure from hourly fees to contingency work. The competition works both ways: defense firms can represent plaintiffs, but corporations are frequently turning to plaintiffs' firms for representation in defense matters, because of the client's concern about cost or because the plaintiffs' firm may be more flexible in what it can charge and how and when it gets paid.
