Understanding Contingency Fees
If you suffered injuries and financial losses as the result of another’s negligence, you could recover compensation for medical costs, loss of income, pain and suffering, property damage, and more. A personal injury attorney can help you pursue both justice and compensation by collecting the necessary evidence to prove that the negligent party caused your accident. Most personal injury lawyers work for “contingency fees.” Understanding contingency fees can be important if you are considering hiring an attorney to help you with your case.
What Is a Contingency Fee?
According to the American Bar Association (ABA), a contingency fee agreement allows a client to only pay attorneys for their representation if and when they win the case or recover a settlement. The contingency fee is typically a percentage of the recovered amount. In essence, the fee an attorney gets is “contingent” upon winning your case and receiving compensation on your behalf.
Understanding contingency fees is important because there could be additional expenses and costs. Take the time to carefully examine the contract that your attorney provides you to determine if you may have any costs associated with your case even if you lose.
Still, contingency fees can be a good way for victims to get professional legal representation without having to worry about any substantial financial risks and without having to come up with the money ahead of time for a retainer fee.
Once You Understand Contingency Fees, Should You Hire a Personal Injury Lawyer Who Doesn’t Use Them?
Lawyers that work with a contingency fee and accept your case will only do so if they believe you have a fair chance of winning your personal injury claim or recovering an out-of-court settlement. They then are willing to take the financial risk and expend the resources to work on your claim.
However, not all personal injury lawyers work on a contingency fee basis. Often, new firms or attorneys starting out may not have the resources to work on a contingency fee agreement.
- Retainer: Some lawyers insist on charging a retainer up front before they begin working on your case, which can cost thousands of dollars at a time when you may be having financial hardships because you are unable to work as you are recovering from your injuries.
- Hourly: Other attorneys charge exorbitant hourly fees. At hundreds of dollars per hour, the fees add up quickly. Should your case be a complex one that requires an extensive investigation and detailed negotiations, any award you win could be completely gone because of hourly fees.
If you end up losing your case under a retainer or an hourly fee, you not only have to pay for your own medical bills, but you could also face steep attorney’s costs. Therefore, it’s often in your best interests to work with a lawyer who agrees to a contingency fee arrangement. By understanding contingency fees and how they work, you can greatly reduce your financial risk of bringing a personal injury lawsuit.
When you are looking at a large settlement of five or six figures – or more – understand that the use of contingency fees means that your interests for receiving a large financial settlement are aligned with the interests of your personal injury attorney. The larger the amount your attorney wins for you, the larger the amount your attorney receives. This is a far better arrangement than using an attorney who’s working on an hourly basis and may have an incentive to try to draw out the case for no reason other than to be able to bill you a higher amount.
How Much Is the Typical Contingency Fee?
The best way to understand a contingency fee is to determine what the fee encompasses. A contingency fee is not a fixed amount and will vary from case to case. The more a client recovers, the higher an attorney’s contingency fee will be. A contingency fee nearly always is a percentage of the plaintiff’s final settlement.
While contingency fee percentages can range from 25 percent to 40 percent, depending on the attorney, the average contingency fee tends to be around one-third of the final settlement amount. Should you hire a personal injury lawyer after you receive an initial settlement offer, the attorney might charge you a 50 percent contingency fee based on the amount he or she can obtain for you that’s more than the initial settlement offer.
Understanding How Contingency Fees Work With Potential Add-on Costs
While victims may not be responsible for the attorney fees related to a personal injury case if they lose when they are using contingency fees, they could be responsible for other miscellaneous costs when their attorney files a lawsuit on their behalf. Regardless of whether victims win or lose a case, they will most likely have to pay for expenses such as:
- Court filing fees
- Fees for pulling official documents
- Expert witness fees
- Reporter and transcript fees
- Other incidental costs.
Each attorney handles these miscellaneous costs differently, and it is extremely important to talk to your prospective lawyer about this. While some attorneys tie these fees into their final fee, some may expect you to pay for these expenses upfront.
Understand Contingency Fees and All Attorney’s Fees During Your Initial Consultation
Because every attorney has their own fees and fee structure, you should make sure to ask questions about the contingency fee agreement in the initial consultation with a law firm or attorney. If you feel that the lawyer is avoiding or not answering your questions about the fee structure, the law firm may not be a good match for you.
Make sure you know your exact financial responsibilities before signing any agreements with a personal injury lawyer. In this way, you can avoid any potential nasty surprises and unexpected charges further down the line.
Why Hire a Personal Injury Attorney?
If you suffered no injuries or only minor injuries in an accident, and you are able to recover your damages from an insurance company on your own, there may not be a need to hire an attorney. In a case like this, understanding contingency fees is not all that important.
On the other hand, if you or a loved one suffered catastrophic injuries due to the negligence of another, and you now face steep medical bills and income losses, an experienced personal injury lawyer can help you pursue what you deserve and protect your rights.
A personal injury lawyer can help you in several ways, including but not limited to:
- Gathering the evidence to prove your claim and your damages through an independent investigation
- Calculating your losses comprehensively and accurately
- Determining all negligent parties in your claim
- Communicating with the at-fault party’s insurance company
- Fighting for a fair out-of-court settlement
- Representing you aggressively in court when necessary.
A seasoned personal injury attorney knows how to handle a claim and can work tirelessly for your best interests, freeing up time for you to recover from your injuries.
Call Tyroler Leonard Injury Law Today for a Full Understanding of Contingency Fees
Understanding contingency fees can be somewhat complicated. However, when you attend the first consultation with us, we will inform you openly and honestly about our fee structure and the potential costs associated with filing a case.
If you suffered significant injuries in an accident due to another’s negligent actions or recklessness, you can get help and do not have to struggle on your own. Tyroler Leonard Injury Law can protect your rights and fight for what you deserve. Find out if you have a strong case and call us today for a free consultation at (651) 259-1113.
Attorney Isaac Tyroler
Attorney Isaac Tyroler has been a strong advocate for injured people his entire legal career. He has a passion for righting wrongs, and he deeply cares about representing injured clients who may feel overwhelmed or uncertain about how to navigate the legal system. He is compassionate toward clients and aggressive with insurance companies and defendants. He is on the elected Board of Governors of the Minnesota Association of Justice (MAJ), the top personal injury lawyers’ group in Minnesota. And is currently the chair of MAJ’s legislative committee. [ Attorney Bio ]
