Personal injury lawyers typically work on a “contingency fee” basis, in which is conditional on a favorable outcome for their client.
In a lot of personal injury cases, the lawyer’s services are provided on their “contingency fee” basis, meaning their fees for representing their client are going to be docked from the final personal injury settlement in their client’s case—or out of the damages award following a successful verdict, in the rare occurrence that their client’s case makes its way to court. When their client does not get a favorable result (to put it another way, does not get any money), then the lawyer receives no fees. Below is what you need to know prior to hiring a personal injury lawyer for your case.
Contingency Fee Percentages
A lot of contingency fee agreements provide the lawyer with a percentage of between thirty-three and forty percent, but you can always attempt to negotiate a decreased percentage or optional agreement. In most cases, a personal injury lawyer is going to receive thirty-three percent (or 1/3) of any settlement or award. For instance, say you receive a settlement offer of $30,000 from the insurance company from the at-fault party, you are going to receive $20,000 and your lawyer is going to receive $10,000. (Discover more about hiring and working with a lawyer and when it becomes clear to represent yourself.)
The “Sliding Scale” Choice
A lot of lawyers are going to draft a fee agreement in which the contingency fee percentage differs subject to the phase at which the case is resolved. This is usually referred to as a “sliding scale.” For instance, your lawyer might send an ultimatum letter to the other side somewhat early on. When you have a reputable case, the other side might make a counter-offer, there is going to be additional negotiations, and a reasonable settlement might be reached prior to you having to file a personal injury lawsuit in court. Under those circumstances, the lawyer’s fee percentage may be at (or possibly less than) the standard thirty-three percent.
But when your settlement happens following you filing a lawsuit, your lawyer might receive an increased percentage of the settlement, possibly closer to forty percent. For instance, if your case settles for $30,000, but only following you filing a lawsuit in court, your lawyer may receive $12,000 when the lawyer’s fee agreement allows for a forty percent cut at this phase. The percentage might even go up a couple degrees when the lawsuit reaches the trial phase. So, prior to deciding to decline a pre-suit settlement offer, think about that as your case advances, it might get more expensive in terms of the percentage you stand to surrender.
Costs and Expenses
Many personal injury lawyers are going to cover the case costs and expenses as they emerge, and then withdraw them from your portion of the settlement or damages award. It’s uncommon for personal injury lawyers to charge their clients for costs and expenses when they become owed.
Costs and expenses in personal injury cases may comprise of:
- medical records
- law enforcement reports
- expert witness costs
- mailing postage
- filing costs
- investigators and experts
- transcriptions, and
- trial exhibitions.
Costs and expenses could get considerable, particularly when settlement doesn’t happen until near to trial. The lawyer’s ending percentage with each of the costs, fees, and expenses might end up coming to a total between forty-five and sixty percent of your settlement.
For instance, perhaps you settled your personal injury case for $30,000 following the lawsuit being filed. There were differing fees and expenses that the lawyer covered coming to a total of $4,000. The lawyer is going to receive forty percent of the settlement amount as their fees, in which is $12,000. The lawyer is also going to deduct $4,000 for fees and expenses from the $30,000 case settlement. In this situation, the lawyer is going to receive $16,000 of the final settlement amount.
Your Lawyer is Going to Receive the Settlement Check
It is routine for your settlement check to be sent to your lawyer. This guarantees that your lawyer is going to get paid for their services. A lot of personal injury lawyers just take contingency cases and, consequently, possibly not getting paid when they do not receive the settlement check. The lawyer is going to contact you when they get the settlement check and should present a detailed list of what they are going to take out of your settlement check for covering your lawyer’s costs, fees, and expenses. When you challenge certain charges, the lawyer might put the challenged amount in a trust account until the matter gets resolved.
If You Release Your Lawyer Prior to the Case Being Over
When you change lawyers or would rather represent yourself, the first lawyer is going to have a lien for fees and expenses sustained on the case prior to the change and might be able to sue both you (their former client) in addition to the personal injury defendant for unsuccessfully protecting and honoring the lawyer’s lien.
If you discover yourself in a situation in which you feel you must fire your lawyer, it is best to get them to agree in writing to pursue no interest on costs or expenses in your case. This documentation needs to then be forwarded to the defendant prior to settlement in order to bypass any unnecessary postponement on the lien.
David Goguen, J. D. (2022, April 8). Lawyers’ fees in your personal injury case. www.alllaw.com. Retrieved April 12, 2022, from https://www.alllaw.com/articles/nolo/personal-injury/lawyers-fees.html
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