Contingent Fees for Commercial Claims
On a contingent fee basis, KMK takes the risk of collection. If a delinquent account should be uncollectible, KMK must “eat” all of the time, effort, overhead and expertise it has exerted in the collection pursuit. If KMK is successful in recovery, then it recovers the percentage of recovered sums described below plus, if legal action is authorized, a suit fee is assessed on the recoveries made to compensate for the overhead of the legal action.
Definition of “Commercial Claim”:
A commercial claim arises from the obligation to pay for goods sold or leased, services rendered or monies leased for use in the conduct of a business or profession, and not for personal consumption. All other claims are designated as retail, and carry retail collection rates. KMK does not solicit other types of claims (if you are an existing client please contact us to discuss how whether we can assist, and on what terms).
Recoveries Made Without Legal Action:
25% of the first $2,000.00 collected; 20% on the excess over $2,000.00 collected. On small claims of $500.00 or less, 50% of recoveries made (with or without legal action).
Recoveries Made When Legal Action Required:
In addition to the contingent commissions as set forth above, there is an additional compensation designated as a suit fee to cover the additional time, effort, overhead and expertise required in processing the lawsuit to appropriate conclusion. All of the additional duties, responsibilities, requirements and overhead of the required legal action are included within the suit fee. Any suit fee will be reasonable in nature and based upon the amount recovered, duration of the litigation and expertise required, not to exceed 10% of recoveries made.
Suit Requirements (When Legal Action Is Necessary):
Legal action is commenced only when authorized and required to effect recovery. When recommended, suit requirements will include an advance for costs (out-of-pocket disbursements). In addition, the suit requirements may include a minimal non-contingent suit fee (retainer), which will be credited against the overall contingent suit fee assessed on recoveries made as explained above.
Authorization to Sue:
Though recovery with suit cannot be guaranteed, authorization to sue is requested only after reasonable means for amicable collection have failed, and only when it appears that legal action will have positive results. If a debtor will not pay voluntarily, and the claim appears uncollectible, we will advise specifically that any investment in suit requirements is not justified. We will only spend your money as we would our own.
Commissions Are Earned:
Irrespective of whether debtor makes payment directly to your organization as the client or to KMK as your attorneys, once KMK acknowledges receipt of the claim and opens a file you should know that KMK is demanding payment by phone, fax and mail, and is communicating with debtor the very same day it receives and acknowledges the claim.
Goods or Equipment Returned For Credit:
The above stated contingent commission schedule applies to one-half of the value of the goods or equipment returned.
Claim Recalled:
A claim placed on a contingent fee basis cannot be recalled unless full commissions and compensation are paid as if full collection was effected. If a collection claim (once a file is opened and worked by our firm) is recalled or returned, because of error in placement, credit due debtor or other reason other than payment (and thus no payment is made or legally due from debtor), a reasonable service charge will be assessed to reimburse our firm for the time, effort and overhead of opening and investigating the file and effecting appropriate resolution of the claim placed short of collection.
Counterclaims:
When asserted by an adverse party in litigation, counterclaims are defended on a time and billing basis, with an intent to protect client’s interests with the most conservative expense possible.
