If you’re looking for a way to afford an attorney for your injury claim, then a contingency fee arrangement may be the answer for you. For those not super familiar with legal terminology, “contingency fee” is a term that may not be very familiar. This type of fee arrangement allows individuals without much or any upfront capital to pursue an injury claim in civil court against an at-fault party. Under this arrangement, the personal injury attorney fronts the money needed for every aspect of the claim and takes a payment afterward, but only if the claim is successful.
Understanding What a Contingency Fee Does
A contingency fee is a type of payment arrangement that is commonly used by law firms for personal injury cases. Under this system, the client does not have to pay any legal fees (including the costs of an investigation, filing fees, administrative duties, etc.) upfront. Instead, the personal injury lawyer agrees to take a percentage of any compensation recovered in the case as their fee. If the attorney does not win the case or secure a settlement, the client is not responsible for paying legal fees.
This arrangement serves two main purposes:
- It allows individuals to pursue justice without financial strain. Many injury victims are already facing high medical bills, lost income, and other financial challenges due to their injuries. A contingency fee arrangement makes legal representation accessible to those who cannot afford to pay an attorney out of pocket.
- It incentivizes attorneys to work diligently on your behalf. Since the attorney’s payment is contingent upon winning the case, they have a vested interest in achieving the best possible outcome for their client. If they do not win, they do not get paid.
The percentage that the attorney takes as their fee can vary but generally ranges between 30% and 40% of the total recovery, depending on the complexity of the case and the stage at which the case is resolved.
When and How Will You Pay?
The timing and method of payment in a contingency fee arrangement depend on the outcome of the case. Here is how it typically works:
- Payment after a successful settlement or verdict. If your lawyer wins the case or negotiates a settlement, their fees will be deducted from the compensation you receive. This deduction is usually a pre-agreed percentage of the total recovery, which may vary depending on the complexity of the case and whether it went to trial. For example, an attorney may take 33% of a settlement reached before trial and 40% if the case goes to trial.
- Deduction of expenses. In addition to legal fees, there are often other costs associated with pursuing a personal injury case, such as case filing fees, expert witness fees, medical records, and more. Many attorneys will cover these costs upfront and then deduct them from the settlement or award once the case is resolved. It is important to understand whether these costs are included in the contingency fee percentage or if they will be deducted separately.
- No fees if the case is unsuccessful. If your attorney does not win your case, you will not owe them any legal fees. In most contingency fee arrangements, the client will not be responsible for reimbursing the attorney for any case-related expenses, though it is always wise to confirm this with your attorney before signing a representation agreement.
Do All Personal Injury Lawyers Use Contingency Fees?
While contingency fee arrangements are common in personal injury cases, not all personal injury lawyers work this way. Some attorneys may charge hourly rates, flat fees, or a combination of fees and contingency. It is essential to ask each attorney you consult about their fee structure and make sure you understand the financial implications of hiring them.
- Hourly rates. Some personal injury attorneys may charge by the hour for their services. In this arrangement, the client pays for each hour the attorney spends working on the case, regardless of the outcome.
- Flat fees. In rare cases, an attorney may charge a flat fee for handling a personal injury claim. This means the client pays a fixed amount for the lawyer’s services, whether or not the case is successful.
If you are considering hiring a personal injury attorney, it is crucial to discuss their payment structure upfront to avoid any surprises later on.
Hiring a personal injury lawyer on a contingency fee basis can provide injury victims with access to experienced legal representation without the burden of paying upfront fees. This arrangement allows individuals to pursue justice while minimizing financial risks. However, not all personal injury lawyers offer contingency fee arrangements, so it is important to ask about a lawyer’s fee structure when considering your options.
