Showing posts with label royalty auditor. Show all posts
Showing posts with label royalty auditor. Show all posts

Friday, February 11, 2022

Why Your Forensic Accountant May Not Provide Services on a Contingency Basis (i.e., Compensated on a Percentage or Commission of Client Recoveries)

As a forensic accountant, I almost never perform work on a contingency or deferred fee basis for several reasons, including:
  1. It introduces some apparent conflicts (e.g., whether we take an aggressive approach for short term gains at the expense of a profitable counterparty-client relationship)... not to mention, who is our client anyway? It is often not one of the parties to a case.
  2. It often compromises our ability to provide timely service since we have to prioritize other work to ensure we have the cash to pay our employees for their work
  3. Our work will likely be inadmissible in court since contingency accountants or auditors have a financial stake in the outcome of the case 
  4. For most of our clients, because they have a great deal of assets at stake, usually it is most cost-effective to engage us on our standard hourly basis
  5. On the other hand, it is not profitable for us to accept very small contingency matters
  6. There are lenders to clients who need to borrow money to afford legal costs - search "litigation financing" to learn more about this. 
If this fee structure doesn’t work for you, I completely understand. It does not work for everyone.