One of the most common concerns in a personal injury lawsuit is the amount of the payout the injured party will receive. However, it’s also essential to understand how much personal injury attorneys make and what factors affect their fees.
Contingency Fee Structure
Law firms that handle personal injury cases usually work on a contingency fee basis, which means they take their payment out of the settlement awarded to their client. This arrangement allows people to file claims without worrying about upfront legal costs.
The fee is usually based on a percentage of the total compensation value. Most firms don’t get paid if their clients don’t, so this reduces the financial risk of pursuing damages for an injury caused by someone else’s reckless behavior.
A contingency model also ensures personal injury attorneys are motivated to build the strongest case possible to get the best payout for their clients. The more money their clients win, the better their payday will be.
How Much Do Lawyers Typically Charge In Personal Injury Cases?
Every firm structures its contingency fees differently, so always make sure you ask about these rates before you commit to hiring anyone. Generally, though, a lawyer’s percentage from the final settlement tends to fall between 33% and 40%.
The exact amount might depend on whether the case makes it to trial. If the claim is settled out of court before a lawsuit is filed, the attorney will likely take closer to 33%. However, if a settlement can’t be reached and the case moves on to litigation, the fee could increase to 40% or more because of the additional time and resources needed.
Whatever the amounts, they’ll be agreed upon in a written contingency fee agreement before the attorney starts to work on the case. Read the agreement carefully so you fully understand the potential fees involved.
Factors That Affect A Lawyer’s Fee
Contingency fees are the most common arrangement for personal injury claims, but several factors can still influence how much the firm earns at the end of the case. The more common factors include:
- Case Complexity: More complicated cases, such as product liability, medical malpractice, and those with multiple defendants, need more time and research
- Time Spent: Cases that need extensive investigation, depositions, or motions will take more time, while simple accidents that settle quickly often take less time and require lower fees
- Settlement vs. Trial: Claims that settle are less risky and less expensive for lawyers to handle than those that go to trial
Besides the fee itself, other expenses could come into play throughout the course of a personal injury claim. These costs are usually taken out from the settlement after the fee is calculated. They’re referred to as case expenses and could include:
- Expert witness fees
- Court filing fees
- Investigation costs
- Deposition and transcript fees
- Medical record retrieval costs
Often, the attorney will front these expenses and only get reimbursed if they win the case for their client. Ensure you fully understand what costs will be deducted from your settlement to avoid surprises.
Here’s a simple example of a cost breakdown:
- Suppose that a car accident case ends with an out-of-court settlement of $100,000
- At a rate of 33%, the attorney’s fee will be $33,000
- $5,000 in case expenses are taken out from the remaining $67,000
- The client ultimately receives $62,000 as their final amount
If you’re confused about how a lawyer’s fees work, don’t hesitate to ask questions. They should always be ready and willing to explain everything to you, and those who don’t should be cautiously approached.
How Lawyers Maximize Compensation For Clients
Looking at those numbers, it might seem like the contingency fee structure takes a large chunk of the settlement. It’s important to remember that personal injury attorneys work hard to maximize compensation for their clients.
A lawyer’s experience in negotiation, understanding the legal system, and presenting the case often leads to higher payouts than what the injured person could achieve on their own. Throughout the process, they leverage:
- Experience learned from handling similar cases in the past
- Knowledge of court procedures and legal deadlines
- Connections with medical professionals and expert witnesses
- Strong skills in litigation and negotiation
Even after the deduction of legal costs, most clients still walk away with a higher payout than they would have gotten without hiring legal counsel. It’s a win-win for both the injured party and their legal team.
Common Fallacies About Lawyer Fees
You may have heard some misconceptions about how lawyers are paid in personal injury cases. Some of the more common ones include:
- Lawyers Always Take 50% or More of the Settlement: This might happen in extremely complicated cases, but it’s uncommon to see contingency fees above 40%
- Clients Have to Pay Up Front: Some firms might require some type of payment, but the vast majority understand the financial burden on clients and only get paid if they win the case
- All Costs Come Out of Pocket: Clients don’t usually encounter out-of-pocket expenses during the legal process
These misconceptions have deterred some people from getting legal help when they need it the most. If you have any concerns regarding attorney fees or payouts, discuss these issues with your attorney to have an informed conversation and make the best choices for your case.
The Value Of Legal Representation
Attorney fees might seem significant, but having experienced legal counsel on the case tends to net higher compensation amounts for the injured party than if they tried to navigate the court system alone. Lawyers offer valuable knowledge and resources that could differentiate between a lowball settlement offer and a fair payout.