Many people will initially put off hiring a lawyer for their personal injury claim because of the fear of upfront costs and expenses that they cannot afford. They might even forgo legal representation altogether and attempt to resolve their accident case and injury claims on their own. More often than not, these people often put themselves at a significant disadvantage in fighting for fair compensation. Insurance companies and at-fault parties may take advantage of unrepresented people.
Insurance companies make lowball offers to unrepresented individuals, or deny claims altogether. Insurance companies will often take advantage of a victim’s lack of knowledge and experience with personal injury claims to try to resolve a case as quickly as possible and for as small a payout as possible.
While some law-related services can come with a hefty price tag, personal injury law cases often have unique fee arrangements that allow any injury victim equal access to the services of an attorney, regardless of their ability to afford one upfront. If you were recently injured due to the fault of another, you may wonder whether you can afford a lawyer and how you will pay him or her. Learn more about how much a personal injury lawyer can cost and how to pay them with no upfront costs to you.
Some of the Most Common Billing Arrangements for Lawyers
Every law firm has its own approach to billing its clients for its services. Clients pay attorney fees in many ways, depending on the lawyer’s preferences. In many cases, lawyers will take various factors into account when creating an attorney’s fees agreement with a client.
Some factors include the complexity of your particular case, the experience of the lawyer that will represent you, and your geographical location.
Examples of attorney fee arrangements include:
- Hourly fee – In this client billing arrangement, a lawyer bills clients a per-hour fee. While some cases can resolve quickly, other, more complex cases can require a significant amount of time and resources to prepare and work through. Always ask an attorney to estimate the number of hours that it could take to resolve a case beforehand to gain a better understanding of attorney fees in a case. Hourly-fee arrangements are uncommon in personal injury cases.
- Flat fee – Under this attorney fee arrangement, an attorney will bill a client one flat fee for the entirety of their legal representation in a particular case. Flat fees are often required to be paid in full upfront to receive legal services. Again, this type of payment arrangement is uncommon in personal injury cases.
- Contingency fee – This is a unique fee arrangement in that a lawyer will receive payment if they succeed in recovering monetary compensation for their client. No upfront fee is required, and the lawyer’s fee is paid from the proceeds of a settlement or court award. The lawyer and client agree to a percentage of a judgment or settlement to pay attorney fees. This is the most common payment arrangement in personal injury cases.
- Hybrid arrangement – Not all lawyers stick strictly to one of the above fee arrangements; they may create a hybrid fee arrangement that combines two or more fee strategies for billing clients for their services.
What Type of Fee Arrangement is Common in a Personal Injury Case?
In most personal injury cases, where an injury victim is seeking compensation for injuries against an at-fault party, a law firm will work on a contingency fee basis on behalf of the client. While this is not the only fee arrangement that can be used in personal injury law cases it is, by far, the most common and widely used in this area of the law. Under this arrangement, the client will not make any upfront payments for a lawyer to accept their injury-related case.
How Do Contingency Fees Work?
There can be much confusion as to how a contingency fee arrangement works in a personal injury case. Typically, personal injury attorneys offer a free case evaluation. During this evaluation, clients share the details of their case, and if it sounds like something the attorney can handle, they should follow up with a discussion of their fee arrangement. This allows the prospective client to review the fee arrangement, negotiate terms, or ask any questions about billing or payment before signing.
Most of the time, the attorney will have a set percentage that they take as their fee from any settlement or award. This doesn’t tend to vary, but additional fees might. Whatever the fee arrangement, the attorney will normally have the client enter into a retainer agreement once the attorney and the client come to a mutual understanding of the fee arrangement.
In a contingency fee arrangement, the client will pay nothing to obtain legal counsel. A contingency fee usually applies only to the fees related to an attorney’s representation in your case. Through this arrangement, an attorney will represent a client in exchange for payment of fees, only if they recover compensation for their client. If the case does not succeed and the lawyer fails to recover money, then a client is not responsible for attorney’s fees.
Sometimes, potential clients believe this is too good to be true. But, in reality, contingency-fee arrangements are the widely accepted norm in the legal community in personal injury cases. However, keep in mind that, due to the risk involved, personal injury lawyers will often be somewhat selective in the personal injury cases they accept, meaning they will want to make sure you have a decent chance of securing recovery before they will take you as a client.
How is the Contingency Fee Percentage Determined for Your Personal Injury Case?
While some states limit the percentage of allowed contingency fees, many others allow lawyers to determine their contingency fees as long as it is reasonable.
You may try to negotiate the contingency fee percentage with your attorney before entering into a retainer agreement. It is quite common for personal injury contingency fees to range between 30 to 40 percent. Factors such as the difficulty of your case, the expected time it will take to resolve, and the risk involved for the attorney might increase or decrease the contingency fee.
Can the Percentage of Fees Change in Your Case?
While a contingency fee agreement ensures that you know what attorney’s fees to expect, if and when you recover compensation in your case, in some circumstances a contingency fee agreement will allow for an increase in percentage for attorney’s fees.
This is common in personal injury cases when the total amount awarded exceeds a specified amount or when a case cannot settle out of court and must go to trial. Your written agreement should clearly detail the potential increases in percentages and the circumstances leading to the increases.
Are Court Costs and Expenses Included in a Contingency Fee?
Your attorney’s fees may not include court costs and other expenses related to your legal representation. Personal injury lawyers will pay these costs themselves during the preparation of your case and throughout your representation.
In most cases, personal injury lawyers will not seek repayment for these costs in cases that do not succeed. When a case succeeds, your lawyer may deduct these costs in addition to the contingency fee percentage that you agreed to. Depending on the complexity of your case or injuries, these costs can vary widely from one client to another.
Examples of costs and expenses in a personal injury case include:
- Court filing fees and costs
- Fees for obtaining records
- Administrative and support expenses
- Costs related to an investigation
- Fees by experts for testimony or reenactments
- Costs for depositions
- Travel expenses
Attorney Fee Agreement
After an accident, it is a good idea to consult with various attorneys to find the right fit for you and your case. Once you find an attorney, you will proceed to discuss the details related to the contingency fees and costs and expenses of your case. Be sure to review the fine print and details related to attorney’s fees and costs before signing the attorney fee agreement.
In reviewing the agreement, you should be mindful of the contingency fee percentage and the attorney’s billing policy related to costs and expenses. While many attorneys will not pursue payment from a client in a losing case for court costs and expenses, other attorneys may attempt to pursue expenses if your case does not succeed. Make sure you clearly understand the expectations related to payment and ask questions if you are unsure.
Don’t hire an attorney that suggests providing services without a written contract. Any professional and reputable law firm will protect the rights of their clients and themselves by requiring a written attorney fee agreement for a personal injury case.
What Happens After Settlement or Judgment in My Favor?
Once you have reached a settlement agreement or a judgment is awarded in your favor, you’ll have the means to pay for your expenses, including attorney fees you have agreed to. In most instances, your attorney’s office will handle these payments. The most common expenses that a lawyer may deduct from a settlement before transferring the remainder to you are medical expenses, attorney’s fees, court costs, and other expenses related to your representation. Once these bills are satisfied, you will then receive the remainder of your settlement money, along with a billing statement from the attorney.
Is a Lawyer Necessary in a Personal Injury Case?
With a better understanding of lawyer costs in personal injury cases, you can decide whether to hire an attorney to represent you. While the portion of the settlement or award that goes to your attorney in a contingency fee arrangement may seem steep, you will often come out with more in your pocket than if you had tried going it alone.
The harsh reality is that many unrepresented accident victims face reticent and unscrupulous actors on the other side, including insurance companies and the at-fault parties they stand behind. Facing a self-represented victim, these actors might delay, offer low settlements, or completely deny a claim. The process of an insurance injury claim can be slow and burdensome and require specialized knowledge and resources that you might not have.
Ultimately, hiring a lawyer is not required in a personal injury case, but doing so can be the best move you may. With an experienced personal injury attorney at your side, you can rely on an expert to ensure legal rights are vindicated, and that you have the best chance of recovering the compensation you deserve. From investigating the accident and your injuries to negotiating a fair and reasonable settlement or representation of your interests in a final hearing, an attorney can provide invaluable services and do everything in their power to seek compensation to get your life back on track after the injuries you suffered.