How Do Personal Injury Lawyers Get Paid?
Breit Biniazan—August 3, 2022
You may have wondered how personal injury plaintiffs can afford to hire attorneys when they’re already facing medical bills, lost wages, and other injury-related expenses.
Because of the financial impact that a physical injury can have on a plaintiff, a traditional dollars-per-hour fee arrangement just doesn’t make sense.
Instead, personal injury attorneys are paid on a contingency fee basis that ensures that no money changes hands until the case is resolved in the client’s favor.
Below we discuss the different types of contingency fee agreements attorneys use and how they can benefit personal injury clients.
What Is a Contingency Fee?
As the name implies, a contingency fee is a fee that’s contingent on a positive outcome for the client.
Generally, this means that if the client wins, the attorney recovers their contingent fee from the settlement or legal judgment. If the client doesn’t win, the attorney charges nothing except expenses agreed to in advance.
What kinds of lawyers use contingency fees?
Contingency fee agreements are common in cases involving:
- Personal injury
- Wrongful death
- Medical malpractice
- Car, truck, and automobile accidents
It’s important to note that contingency fees generally only apply to the plaintiff’s side of litigation.
Someone defending against a personal injury, wrongful death, or medical malpractice claim will usually need to pay their attorney on an hourly or retainer basis.
In some cases, insurance may cover these defense costs up to a certain threshold; after that, the defendant is responsible for any remaining costs.
What types of contingency fee agreements are available?
There are several common types of contingency fee agreements.
Traditional contingent fees
These fees are a flat percentage of the plaintiff’s total recovery—often between 25% and 33%. For example, if a plaintiff’s case settles for $100,000 and the contingency fee agreement provides for a 25% fee, the plaintiff will retain $75,000 of the total.
Sometimes these fees will specifically include or exclude certain costs, like costs your lawyer incurs during discovery or filing fees. Costs that are excluded from the fee will be separately deducted from the amount recovered.
Mixed hourly and contingent fees
Here, the attorney will receive a significantly reduced hourly rate even if the plaintiff doesn’t recover any damages. However, if the attorney wins or settles the case, they may receive an additional “bonus”—either a dollar amount or a percentage of the total amount recovered—that makes up the bulk of the fee.
Sliding scale contingent fees
In this case, the fee percentage is on a sliding scale to account for the complexity of the litigation. The longer a lawsuit goes on, the more fees are generated—for example, an attorney may charge a fee of 20% if a case is settled before trial, 30% if it settles after a complaint is filed, or 40% if it goes all the way through trial.
These fees and the percentage charged are often negotiable, and many personal injury attorneys will use different fee arrangements based on the type of case, the client’s needs, and other case-related factors.
What is the percentage charged under a contingency fee agreement?
Generally, contingency fees fall between 25% and 40% of the amount recovered, with many fees set at 33% (or 1/3rd of the recovery).
Some states have laws that cap contingency fees at a certain percentage. However, Virginia uses a “reasonableness” standard that will generally uphold any fee agreement that is within this range and doesn’t otherwise violate public policy.
How does a contingency fee treat additional costs?
A straight contingency fee agreement will include costs in the fee—but for some cases, attorneys may bill costs separately.
For example, a contingency fee agreement may provide for a 25% fee plus the first $10,000 in non-fee-related costs. If the plaintiff recovers $500,000 and the attorney incurs $25,000 in costs while litigating the case, the attorney will recover a total of $135,000—$125,000 as the contingent fee and $10,000 in costs.
Benefits of Contingency Fee Arrangements
Contingency fees can benefit clients in several important ways.
You know your case has a good shot at success.
Put simply, lawyers working under contingency fee agreements don’t want to take cases they don’t think they’ll win. If an attorney takes your case under such an agreement, this means you have a high likelihood of settling or winning your case.
You don’t need to fee-shop among attorneys.
When you’re looking for someone to represent you in a personal injury case, you aren’t likely to have the time or energy to seek out multiple quotes to find the most affordable option. What’s more, when it comes to fighting for your rights in court, you also want the best representation available.
A contingent fee means you don’t have to settle for a lawyer you can “afford.” Instead, you can select the best attorney for your case or situation without having to pay more for higher-quality representation. This puts a tremendous amount of power back into the hands of those who are injured.
A contingency fee means you can select the best attorney for your case without having to pay more for higher-quality representation.
You don’t need to worry about how to pay for legal advice.
If you’ve been injured due to another person’s negligent or reckless behavior, you’re probably facing medical bills, unpaid time off work, or even a permanent disability. Meanwhile, many wrongful death cases sadly involve the death of a beloved breadwinner, putting his or her loved ones under financial strain.
A contingency fee ensures that you’ll only pay legal fees if you win your case, whether through settlement or a court judgment. This can relieve some of the financial pressure you may be feeling and allow you to focus on what’s important—recovery and moving forward.
At Breit Biniazan, our skilled personal injury attorneys only recover if you win. With a proven record of success in even the most complex personal injury, medical malpractice, and wrongful death cases, we’ll give your case the attention it deserves. Give us a call at (855)-212-8200 or contact us online to schedule a private consultation.
By Courtney Sweasy