You’ve been injured in an accident, and the other person was at fault. You think you might have a case and have considered suing, but you can’t afford a lawyer. Now you’re seeing commercials from other personal injury attorneys who say, “We don’t get paid unless you do!” How does it work? If you hire a personal injury lawyer to pursue your case, how exactly do they get paid? Here’s what you need to know.
Free ConsultationsThe vast majority of personal injury attorneys offer free consultations. This gives you the opportunity to look around and talk to a lot of different people to find the right lawyer for you. Since cases can take so long to play out, it’s important to work with someone you like, trust, and respect. Technically, you can switch attorneys in the middle of a case, but it’s often a big hassle. So take advantage of the opportunity to meet for free.
Contingency FeesAll lawyers charge fees for the work they do, but personal injury attorneys tend to work off contingency fees. This means that getting paid is contingent on the outcome of your case. If you win a judgment or settlement, then your attorney will receive a percentage of the amount you’re awarded. That percentage should be discussed and put into writing before you begin working with a personal injury attorney. Typically, a contingency fee ranges from 33 percent up to 40 percent. Some cases, like medical malpractice, have caps in place so you can only win up to a certain amount. This may or may not impact the percentage a personal injury attorney charges for their contingency fee in that specific type of case.
Other Fee SchedulesWhile a contingency fee is the most common method for payment, it’s not the only one. There are other ways a lawyer can be paid based on your financial situation and what you both agree to do. Hourly Rates: In this situation, your lawyer charges you an hourly rate, and you pay for it out-of-pocket. This is very rare in personal injury cases. Mixed Hourly/Contingent: This hybrid of the two methods means that you’re charged a reduced hourly rate that you pay as the work is being done and your attorney is paid a reduced percentage from the judgment or settlement you win at the end. Sliding Scale Contingency: The percentage you pay is determined by how the case progresses. It goes up the further you get in the process. Settling out of court means your lawyer is paid a lower percentage than if your case goes to trial and you win a judgment. Contingency Hourly: Like the contingency fee, your attorney is only paid if you win, but they’re paid for the hours they worked on your case. This is highly unusual in a personal injury case and is most often done if you can recover attorney’s fees from the defendant as part of the ruling.
Legal ExpensesThere’s a second part to the cost of working with a personal injury attorney. Every attorney charges a legal fee, whether hourly or a percentage, and every attorney also has expenses to work on your case and bring it to trial. These expenses are paid upfront by your lawyer but will be reimbursed out of the settlement or judgment you win. Common expenses include:
- Copies of records and reports
- Legal research
- Court costs like filing fees and deposition fees
- Court reporting fees
- Jury fees
- Mileage and travel
- Investigation fees
- Expert witness fees
What If You Don’t Win Your Case?The risk every personal injury lawyer takes is that you might not win which means they won’t earn their contingency fee. They know this when they take you on. But the legal expenses are something else entirely. In some cases, you may not owe them if you lose, but you might. If an attorney requires the reimbursement for their expenses regardless of the outcome, negotiate this as part of your written agreement. You can place a cap on the maximum amount they can spend and ask for regular updates of what expenses are accruing for your case.
Getting PaidLet’s say your personal injury claim went to trial, and you were awarded a judgment for your medical expenses, time, and losses. Now what? In all situations, the settlement check will be sent to your attorney. They will deduct their fees and expenses from the amount and give you the rest. When you sign the agreement and hire your lawyer, they’ll discuss how payment will work. It can be done in one of two ways:
- Contingency fee (percentage) based on and withdrawn from the total amount, and then the expenses are deducted.
- Expenses are deducted, and the contingency fee is deducted from the remaining amount.