You’ve been injured in an accident and now face a long-term recovery, loss of income, and have mounting medical bills. Your friend said they paid their attorney $6,000 for their divorce. You don’t have that kind of money, so you assume hiring a lawyer is not an option.
One of the greatest hindrances to hiring an attorney is fear of the lawyer’s fees. Do you know that the legal fees you pay or don’t pay, depending on the type of case you have?
When you have a personal injury case the attorney fees are handled on a contingency basis. That means you don’t pay unless you win.
Wondering how this works? Keep reading for everything you need to know about contingency attorney fees, what you pay and when you pay.
Contingency Fee Agreement
Your top priority in hiring a personal injury attorney is finding one who gets good client reviews and has a high success rate. At the initial consultation, the attorney should answer your questions about their firm, their analysis of your case, and explain their fee contract to you.
Most personal injury attorneys handle their lawyer’s fees on a contingency basis. This means when they reach a settlement or win at trial, they receive a percentage of the settlement as payment for their legal services.
The standard contingency fee is about 33.3% but may go as high as 40%. They may also vary, with a higher amount being collected if the case goes to trial.
Even though you are not paying the attorney any upfront fees, they will need you to sign an agreement that provides you with information about the legal costs, upfront costs, and more. This is the contract that says you are hiring them to represent you in the case. In exchange, you agree that a portion of your settlement will be paid to them for their services.
The contract also explains any other legal costs you will be responsible for paying. It will also confirm that if you do not win your case you will not owe any lawyer’s fees.
The rules regarding attorney fees are set forth in Rule 4-200 of the Rules of Professional Conduct and Rule 1.5 of the State Bar of California. This rule prohibits contingency fee arrangements in some cases. Prohibited cases include family law matters and criminal prosecutions.
In personal injury cases, the contingency basis is beneficial to the client.
Benefits of Contingency Basis Lawyer’s Fees
One of the main reasons for contingency is that the person who is undergoing recovery has just experienced a huge physical and financial loss. They are likely unable to work, need time to heal, and have medical bills pouring in. The last thing they need is an attorney bill.
The benefit is that an attorney working on a contingency basis has an incentive to work harder. The higher the settlement they obtain, the higher their “paycheck” is at the end. The fees an attorney collects on a $500,000 settlement are much better than those on a $100,000 settlement.
Accident-injury attorneys know the law and how to negotiate with insurance companies. They are familiar with reading medical records and know state law and court procedures.
Insurance companies are more likely to negotiate a substantial settlement out of court with an attorney than an injured party. When dealing with the injured person insurance companies have a tendency to make low-ball settlement offers. They hope a person desperate for money will agree to their offer.
Once a person agrees to a settlement, they are unable to later file a lawsuit. The insurance company gets off cheap and the person does not receive appropriate compensation for their injuries.
Don’t make this mistake. If you receive a settlement offer from an attorney, do not agree to anything. Consult with a knowledgeable personal injury attorney who can review the offer and advise you regarding its fairness.
Total Legal Costs
When you enter into a contingency fee agreement, you likely will not pay any upfront costs. Your attorney will keep a record of any additional costs they encounter working on your case, including:
There are many expenses the office incurs during your case. When the attorney files the complaint there will be a court filing fee. There will also be certified mail or process server fees to have the defendant served with the complaint.
While the case is in litigation your attorney may pay for transcripts of court hearings or depositions. There may be costs for the preparation of exhibits, photocopying, and postage.
Facilities often charge the attorney to obtain medical records, police reports, employment records, and other documents relevant to proving your case.
There may be professional fees outside of the attorney’s during litigation. This may include court reporters for depositions, expert witnesses, or accident re-enactment experts.
Other fees may include payment for professional assistance including paralegals and private investigators. They will also pay professional fees to witnesses or deponents, including doctors.
Many attorneys raise their fees if the matter goes to trial. This is because trial preparation is a lengthy process. Your fee agreement will specify if there trial fee.
Prior to trial, your attorney will prepare for your case. This includes interviewing witnesses, preparing exhibits, and doing other preliminary work. They need to be prepared to conduct the following:
- Jury selection—they must develop questions to ask each juror to determine their suitability to the case
- Opening Statement
- Examination of witnesses
- Cross-examination of defendant’s witnesses
- Closing arguments
- Jury instructions
Following the verdict, your attorney will prepare the final judgment that is entered with the court. This sets forth the verdict and establishes it as an enforceable order under the law.
When your case reaches a settlement or you win at trial, the final monetary award will be sent to your attorney. The payment will be made in the form of a check payable to you and your attorney as joint payees.
After you sign the check the attorney will deposit it into their IOLTA account while they prepare the closing paperwork and do distributions.
Prior to disbursing your settlement to you, the attorney will pay the following from the award:
- Attorney fees
- Office expenses and professional fees
- Medical liens—placed by health insurance and other agencies to recover medical costs
The remaining funds are the portion of the settlement you receive. You will receive your payment with a copy of the itemized bill showing details of all expenditures.
Get Your Questions Answered
When trying to determine the best steps to take, you will likely have a lot of questions you need answered. The best way to obtain answers regarding lawyer’s fees and your case is to schedule a consultation with an experienced personal injury attorney.
You can call Sweet Lawyers at 1-800-674-7854 to schedule a free consultation. We have case managers, investigators, and attorneys available by phone, email, or text 24 hours a day, 7 days a week.
Our personal injury attorneys have more than 40 years of experience and a 98% success rate. Contact us today to receive a legal analysis of your case.