Most attorneys are paid by the hour with an upfront retainer, but the majority of personal injury lawyers use a different form of compensation. Unlike a defense attorney, for example, there are usually no upfront costs to seeking representation from a Personal Injury Lawyer.
How a Contingency Fee Agreement Works
Personal injury lawyers are not paid attorney fees unless they win their case. If your lawyer wins your injury case, you will need to pay the attorney’s fee out of your compensation. In most cases, personal injury lawyers receive about one-third of the settlement amount. If your lawyer does not win your case, you may walk away without owing anything.
After a free initial consultation, your lawyer will ask that you sign a contract called a fee agreement if you decide to be represented. This agreement will explain how and when the lawyer will be paid and the percentage amounts you and the attorney will receive if the case is successful. Be sure to verify the lawyer’s fees before you sign on the dotted line.
There are other costs of hiring an injury attorney in addition to attorney’s fees. Your lawyer will cover many expenses to prepare your case and negotiate your claim. This may include the cost of expert testimony, deposition expenses, and office fees. The costs to prepare your case will be deducted from your settlement before the attorney receives their fee.
The advantage to this system is you have no out-of-pocket legal expenses while you are seeking the compensation you deserve. This is important because many injury victims are already struggling with necessary expenses while out of work.
Average Personal Injury Lawyer Fees
On average, a personal injury attorney’s fees are 33.33% of the settlement amount on a contingency basis. This fee can vary somewhat based on experience, location, case complexity, and the time necessary to prepare the case. If the case must go to court, most contracts increase the fee to from one-third to 40%. Fortunately, this rarely comes into play as the vast majority of injury claims are settled through insurance before going to trial.
To demonstrate how a contingency fee arrangement works, imagine accepting a $15,000 settlement from the insurance company that your attorney negotiates. Your lawyer’s costs to prepare the case are $500. This is subtracted for your settlement amount first to leave $14,500. Your attorney will then receive 33.3% ($4,833) from the settlement as their fee. This leaves you with $9,667. This will be the amount you receive unless your case has a medical lien from a hospital or physician.
The lawyer contingency fee system ensures that personal injury victims can afford to pursue claims and lawsuits to hold wrongdoers accountable and recover their damages.