One of the biggest concerns people have about hiring an attorney is that they worry it will be too expensive. What many people may not realize is that most personal injury lawyers work on a contingency fee basis. This means that you do not pay them anything until after the case is completed and a claim or settlement has been won in your favor. If that outcome is achieved, they receive a percentage of the total settlement or award money. Any additional fees and expenses that were incurred while making a claim and / or going to trial will be deducted from the final amount as well.
What Are Contingency Fees?
When an attorney works on contingency, they are taking the financial risk onto themselves rather than placing it on the client. The payment they receive is contingent on them winning the case. Most attorneys will also generally waive most if not all additional expenses incurred if the case is lost. Rather than a specific number, the fees are generally set as a percentage so they can be applied fairly to every possible outcome. In California, the average base contingency fee is usually between 33-40 percent. This system makes it possible for people to get the legal help they need without worrying about whether or not they can afford it.
What are the Typical Attorney Fees for Personal Injury Claims?
In the state of California, the average contingency fee percentage for personal injury claims usually starts around 33 percent, or one third of the final settlement. They generally add any fees and expenses they have to pay while working on the case as well. The percentage is based on the amount of time and work put into the case, which is why most firms will increase their percentage if the case goes into litigation. If the case goes into litigation but a settlement is reached without having to go to trial, the average contingency fee is generally between 40-45 percent. If the case goes to trial, the contingency fee may increase to as much as 55 percent.
How Does the Contingency Fee Get Paid?
When the defendant pays the settlement, they send it to your attorney. The money is placed in an account while they calculate how it needs to be distributed. They take their percentage and other agreed upon applicable fees and pay off any outstanding liens from the case such as medical bills before the remaining balance are distributed to the plaintiff. Any expenses or liens should be recorded in an itemized list of deductions and provided to the plaintiff with the remaining balance.
What Factors Can Impact a Personal Injury Lawyer’s Contingency Fee?
Personal injury lawyer fees are determined by estimating the amount of time, work, and money the attorney will be putting into the case. In situations that are more complicated or involved, the attorney may require a higher percentage. This is also why contingency fees increase when the litigation process starts. Even if the case does not actually make it to trial, there are many things that must be done beforehand that will result in higher fees, such as:
- Court filings
- Expert witnesses
- Discovery
- Investigations
- Serving documents
What is a Sliding Scale Fee Arrangement?
When an attorney has different fee percentages for different stages of the case, it is known as a sliding scale fee arrangement [1]. These rates are outlined for clients in the initial contract and reflect the increased amount of work required the further a case goes into litigation. The average rates generally increase about 5-10% between each stage. Having a sliding scale ensures that the attorney is paid fairly for the time and effort they put into the case while also ensuring that the client is not charged a higher flat rate for the lawyer’s services if the claim never goes to trial.
What Are Other Personal Injury Claim Expenses and Who Pays Them?
There are many different things involved in building and pursuing a personal injury case. Most of these things have their own fees and expenses attached that your attorney will have to pay at the time. Some firms will have a higher contingency fee to account for the extra costs. Others will calculate costs and expenses separately to be added to their fees at the end of the case. Common expenses added to administrative fees can include:
- Accident Reports
- Court Reporters
- Depositions
- Expert Witnesses
- Filing Fees
- Investigators
- Medical Records
- Postage
- Serving Documents
- Transcripts
- Trial Exhibits
Example of How Contingency Fees and Expenses Work
Some people do not realize that the overall settlement amount is not the total amount that they will personally receive. Below is a chart illustrating the different variables that can affect contingency fees and expenses as well as how a settlement may be distributed at the end. It also needs to be determined prior to the engagement if expenses will be deducted before or after the fee is calculated as this impacts the total balance paid out to the plaintiff. Another thing to remember is that if the attorney arranged medical treatment on a lien basis, those medical bills are paid off by the settlement as well.
The numbers in the example are more simplified than an actual case would be to give a clearer understanding of how things are calculated.
Expenses deducted before fee is calculated:
| Stage | Pre-Litigation | Arbitration | Trial |
| Settlement | $80,000 | $100,000 | $150,000 |
| Expenses | $300 | $5,000 | $20,000 |
| Medical Bills | $20,000 | $20,000 | $20,000 |
| Contingency | 35% | 45% | 50% |
| Attorney | $20,895 | $33,750 | $55,000 |
| Client | $38,805 | $41,250 | $55,000 |
Expenses deducted after fee is calculated:
| Stage | Pre-Litigation | Arbitration | Trial |
| Settlement | $80,000 | $100,000 | $150,000 |
| Contingency | 35% | 45% | 50% |
| Attorney | $28,000 | $45,000 | $75,000 |
| Expenses | $300 | $5,000 | $20,000 |
| Medical Bills | $20,000 | $20,000 | $20,000 |
| Client | $31,700 | $34,700 | $35,000 |
Who Pays for Expenses if You Lose Your Case?
Different attorneys will have different procedures for handling the additional costs and expenses in the event of an unfavorable outcome. Some firms assume the risk of lost expenses entirely and do not expect any kind of reimbursement if the case is lost. Others may split those costs with the client while some require the client to cover them completely. Many attorneys will cover the expenses of a lost case, but if the client terminates the contract or is responsible for the attorney dropping the case, the client may be responsible for any money spent on the case up to that point.
What Do You Pay If You Fire Your Lawyer Before the Case is Over?
There are many reasons why a client or attorney may need to terminate the representation before the case is over. Sometimes, a client may misrepresent the facts of the accident or become unresponsive, and the attorney may be forced to drop the case. Other times, a client may decide that they no longer wish to pursue the matter, or they think another attorney may be a better fit. In these situations, it is likely that the attorney will require the client to reimburse any incurred expenses.
Pros and Cons of Contingency Fee Agreements
Contingency fee agreements are generally favored as they allow injury victims to pursue legal action without worrying about being able to afford an attorney. They do not have to be mindful of hourly rates and the risks involved if the case is not successful. There is some debate as to whether contingency fee agreements make attorneys less willing to take on smaller or more complicated cases. However, if a case is too small or unlikely to succeed, other fee structures would not necessarily be a benefit. Attorneys who work on contingency have a personal interest in making sure they get the best possible settlement for their clients.
What are the Other Types of Ways to Pay a Personal Injury Lawyer?
There are a few different fee structures that attorneys may utilize [2]. Each has their own benefit for different situations.
Fixed Fee/Flat Fee – When a lawyer offers a specific service such as defending against a ticket or drafting finalized contracts, they often charge a set fee for the service itself.
Hourly Rates – The type of pay structure most people are familiar with for attorneys is an hourly fee. The attorney determines what an hour of their time is worth and documents the amount of time they spend on each case as they go.
Retainer – A retainer fee is when the client pays the attorney in advance. This is generally seen in combination with hourly rate structures. Some clients prefer to have an attorney on retainer for expected future issues, legal needs, or advice. Time that goes over the amount covered by the retainer would be billed separately.
Is it Worth it to Hire a Personal Injury Lawyer?
While you are not legally required to have a lawyer represent you in order to file a personal injury claim, it can be very beneficial. Personal injury attorneys are familiar with the complexities and obstacles involved in pursuing a claim and know how to navigate them. They know how to strategize and build a strong case that will result in the best possible outcome. The legal system is designed in a way that makes it difficult for people outside of it. Having an attorney reduces the amount of work and stress involved, giving the client the opportunity to focus on their recovery. A personal injury attorney can do the following:
- Filing insurance claims
- Finding medical treatment
- Coordinating property damage repairs
- Filing DMV paperwork
- Gathering evidence
- Taking witness statements
- Drafting legal documents
- Calculating compensation
- Negotiating with insurance companies
- Filing a lawsuit
- Presenting the case in court
- Retrieving the settlement
Studies have shown that personal injury claims filed with the assistance of an attorney are statistically more successful than those without. Among successful cases specifically, those with an attorney are often able to receive higher compensation as well.
Should I Hire a Personal Injury Lawyer?
Every situation is different, and everyone’s needs are different. Only you know what is truly best for you. When trying to determine which course of action to take, there are many things to consider.
- How complex is your case?
- Are there multiple parties involved?
- Are there overlapping claims?
- Is the other party a business or government entity?
- How severe are your injuries?
- Did you require an ambulance?
- Were you hospitalized?
- Did your injuries require surgery?
- Will you need continuing treatment?
- Is there a dispute with the insurance?
- Are they denying liability?
- Are they trying to offer a small quick settlement?
- How long ago was the accident?
- Are you still within the statute of limitations?
Depending on how these questions are answered, your claim may be complex enough that it makes professional legal support worth the expense. Even for simple personal injury claims, a free consultation with a qualified personal injury lawyer from Mesriani Law Group may be beneficial to see if there is an opportunity to leverage their expertise to get a larger settlement.
Contact Mesriani Law Group if You Have Sustained Injury Due to Someone Else’s Negligence
Working on contingency is just one of the ways that personal injury attorneys strive to make sure that accident victims have access to legal aid and the opportunity to pursue fair compensation. At our firm, we want our clients to be secure in the knowledge that we are fighting for their best interests without worrying about whether they can afford it. Our fee structure is designed to ensure that we are able to go above and beyond to achieve the best possible outcome for our clients. Our office is in Santa Monica and we provide legal representation to all of Los Angeles and the rest of Southern California. If you have been injured in an accident caused by someone else’s negligence, call Mesriani Law Group today for a free consultation.
Sources
[1] https://www.alllaw.com/articles/nolo/personal-injury/lawyers-fees.html [2] https://www.nolo.com/legal-encyclopedia/how-will-my-personal-injury-lawyer-get-paid.html
Personal Injury Fee FAQs
What percentage do most injury lawyers take?
Generally, the lowest contingency fees for personal injury claims start at about 33% or one-third of the settlement. Some firms may charge 35-40% as an initial fee. Sliding scale fee structures can raise much higher. It also depends on the type of claim and the amount of work inherent in that particular area. If an attorney specializes in cases that always require a great deal of time and effort from the beginning, they may charge a higher percentage to account for that.
What is the highest contingency fee for a lawyer?
Starting rates for claims that are settled pre-litigation do not generally go above 40% but could be as high as 45%. This number often increases once the litigation process begins and may continue to rise if the case goes to trial. The contingency percentage for a case that goes to trial is generally around 50% but some attorneys might charge as much as 60%.
What percentage of cases are settled before trial?
One thing that attorneys and insurance companies agree on is that it is preferable to settle out of court. Litigation is something that is pursued when absolutely necessary and is not taken lightly. Even those that do require the litigation process to be initiated will often reach a settlement agreement before it gets to trial. It is estimated that approximately 95% of personal injury claims reach a settlement in pre-litigation. The Bureau of Justice Statistics has further estimated that only about 3% of cases are actually decided by trial verdict.
