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One thing my inlaws ran into with this issue is that the contractor had worked with literally every lawyer in our town and the surrounding ones, so no one could take their case because conflict of interest.
But as far as paying a lawyer, they'd likely also lump their fees into the lawsuit.
Yup. Find a lawyer willing to work on contingency, and let them take the wheel.
Almost all lawyers will do this for this type of case, but you might be able to get away with paying a flat fee for them to send a strongly worded letter.
But, since most contractors are crooks, you'll probably have to go to court. It really depends on your contract, though. You might have to go to arbitration, which is where getting a 3rd party inspection can be a life saver.
My inlaws had a garage built to house their RV and boat, and the contractor never once inspected his subcontractors' work. They had it inspected, and it took the inspector 6 hours to take pictures of everything that was wrong. The report was like 120 pages long. They refused to pay the rest they owed him (they had already paid $90k), and he sued them for it.
They showed up in court with their contract, and the judge told him to fuck off, because the contract said they had to arbitrate before going to court.
Unfortunately, the contractor won the war of attrition, and they ended up with an unfinished piece of shit garage because they gave up fighting.