It’s a common misconception that all attorneys charge their clients by the hour. While this may be true of lawyers in some practice areas, like divorce proceedings or tax law, it isn’t the case for most personal injury attorneys.
How are Personal Injury Lawyers Paid?
Rather than charging an hourly fee, personal injury lawyers typically ask for a contingency fee instead. This fee is designed to allow anyone, regardless of their current financial situation, to be able to afford legal counsel.
What is a Contingency Fee?
A contingency fee is a pre-determined percentage of a settlement that is paid to the attorney for handling your case. This fee replaces an hourly rate and is paid after a case is settled because it is based directly on the actual amount that a case settles for. In addition, the contingency fee is only paid if a settlement is won. If the client does not receive a settlement, he or she does not have to pay their attorney.
Benefits of a Contingency Fee for the Client
There are a number of benefits to working under a contingency fee, both for the client and for the attorney.
For the client, this fee ensures that the personal injury lawyer is prioritizing the case. No matter how seemingly small your case may be, a good attorney will still commit the necessary time and effort, especially because the amount that the settlement fetches directly affects how much they get paid.
Getting into a car accident or being the victim of a workplace injury can be a devastating financial blow. Not only do you have medical bills and car repairs to deal with, but you might also have to miss work, pay for additional childcare, and face other unexpected expenses as well. If you were already in a tough financial situation proper to the accident, this can escalate even more. But a contingency fee allows you to get good legal counsel without the pressure. If you do not receive a settlement, you won’t be expected to still pay your lawyer.
Benefits of a Contingency Fee for the Attorney
For the attorney, a contingency fee might not sound like a good idea. After all, they could sink work into a case only to lose out on the settlement and not receive money for their hard work.
However, a contingency fee acts as a sort of reward for hard work and dedication. The more effort an attorney puts into the building and defending your case, the higher the potential payout they could receive.
What Percentage Does a Contingency Fee Require?
Contingency fees are set by each individual attorney or law firm. They are also based on a number of factors, like how complex your case is and how much the projected settlement is worth.
For the most part, contingency fees are set at anywhere from 33 to 40 percent. Generally, the more complicated a case, the higher the percentage that the attorney chooses to charge will be. However, the contingency fee is always agreed upon ahead of time. If you win more or less than you expected to, the fee won’t change as a result.
Perhaps the most common contingency fee is 33 and ½ percent or one-third of the final settlement awarded. If you are seeking 100,000 in damages, a 33 ½ percent contingency fee would be a payment of around $33,333.
Can You Negotiate a Contignedy Fee?
Another common question that many attorneys have is whether or not a contingency fee can be negotiated. In most cases, it cannot be.
There are a number of reasons for this. The biggest is that the contingency fee isn’t a reward for your attorney. Instead, it is a part of their regular pay for their work. That means that the income needs to go towards a variety of office expenses, salaries of your attorney and other staff members, and supplies like paper and computers.
Is it Worth it to Hire an Attorney?
If you have been injured in an accident and decide to seek a settlement, it’s a good idea to hire a personal injury lawyer. He or she can help guide you through the legal process and hopefully maximize your potential settlement. While you will need to pay for those services through the contingency fee, the potentially larger payout will make it well worth the investment.