When injured because of an accident and thinking of hiring a personal injury lawyer, the most probable question is “How much will this cost me?” It is a fair question; after all, legal fees are scary.
Most personal injury lawyers do not charge their clients an up-front fee. Instead, they use a system known as a contingency fee. In simple words, it means if you do not win, no payment is made to the lawyer.
This article aims to describe the contingency fee, what other costs you could incur, and give you an idea of what to expect before actually signing.
What Is a Contingency Fee?
A contingency fee agreement allows anyone to have access to legal representation, and not just those who can afford to pay a lawyer a certain rate by the hour. Under this system, your lawyer’s payment hinges entirely on the outcome of your case. If you get a settlement, your lawyer takes a percentage of it.
The charge will usually be between a third and two-fifths of the recovery. For instance, if your settlement is $90,000 and your attorney’s fee is 33%, you will pay your lawyer $29,700. Generally, you do not pay if your lawyer fails to win or secure any compensation.
The purpose of this model is to align your lawyer’s incentive with your own. In this case, they do not get paid unless you do. Working hard, in this situation, is ultimately beneficial for both you and the attorney, as a better result means a better benefit.
What Other Costs Might Arise?
Although the contingency fee covers the cost of your lawyer’s services, it does not cover other expenses in your case. Your attorney incurs costs like administration costs, court filing fees, and investigation expenses while building your claim.
When you hire a personal injury law firm, it pays these costs upfront for you and then deducts them from your settlement later. However, make sure to carefully read your agreement, as some firms may require you to pay these costs back in case of a loss.
How Fees Can Vary
Not every case follows a one-size-fits-all fee structure. A lawyer’s percentage fee is dependent on the risk level and the estimated amount of time taken. Some lawyers have a sliding scale structure; for example, they may charge 33% if your case settles before trial and 40% if it goes to trial. Always discuss these details before signing any agreement.
Why Hiring a Lawyer Still Makes Financial Sense
It is understandable to be hesitant when you learn that a lawyer might take one-third or more of your settlement. Numerous studies and data in the field show that people represented by attorneys recover more compensation than people representing themselves.
Insurance firms employ experts to handle claims and limit their payouts. Having a professional on your side can guarantee better settlements. A skilled personal injury attorney can level the playing field. Despite paying fees, clients often achieve a much higher net recovery than they would receive without the resources of an attorney.
What You Should Do Before Signing
Before you hire a lawyer, ask questions like
- What percentage will you charge if my case settles?
- What about if it goes to trial?
- Who pays the case costs if we do not win?
- Can I review a sample fee agreement before deciding?
A good lawyer is transparent in everything they do and can explain anything. Ask questions where you do not understand something to avoid issues later.
Conclusion
Paying a personal injury lawyer does not have to be complicated or scary. Does a contingency fee system benefit you as a client? It does since it puts your lawyer on the same side as you.
Even better, money is not a barrier to justice with this system. You can go ahead if you understand how the fee will work, what other legal fees may apply, and what document you are signing. In that case, your lawyer is on your side.
Key Takeaways
- Most personal injury lawyers work on a contingency fee basis, meaning they only get paid if you win your case.
- Typical contingency fees range from 33% to 40% of your total recovery.
- Case-related expenses (like expert witnesses, court fees, and investigation costs) may be deducted from your settlement.