Contingency Fee

Victims injured through no fault of their own should have the best legal representation they can find. However, they are usually hesitant to even consult with a personal injury lawyer because of concerns about attorney fees. For these victims, whether they were hurt in an auto accident, slip and fall, or pedestrian accident, among others, hiring a lawyer to fight for their legal rights and pursue financial compensation could involve a contingency fee or an hourly fee.

With an hourly fee, when the lawyer and/or the legal team works on a case, they will charge a client an hourly fee, which means that there’s no cap on how much a client could end up paying the lawyer. Likewise, depending on how long the case could take, the fees incurred could add up to a substantial sum.  Keep in mind, the hourly fees just pays for the attorney’s time, but you would likely also be responsible for paying various costs needed to advance your case such as experts and filings fees.

Fortunately for injured victims, most, if not all, reputable personal injury attorneys work with their clients on a contingency fee basis. This arrangement means that you won’t owe anything upfront, and you will only owe legal fees if your attorney successfully recovers a settlement or award on your behalf.

What Is a Contingency Fee?

A contingency fee is an arrangement where the attorney agrees to represent a client and be paid a portion of the money if there is a recovery on the case, if it is successful–meaning  that the lawyer secures monetary compensation for the client either by settlement or award.  In most contingency fee agreements, the attorney also advances all the necessary costs and is only reimbursed those costs if a recovery is made.

But how much is the contingency fee? It’s negotiable.  The exact fee will vary based on the agreement made between the lawyer and client.  Factors might include the complexity of the case, the amount of anticipated work required, the reputation of the lawyer and the amount of compensation the lawyer wins for the client. This is why clients should always discuss the specific details of a contingency fee agreement with their lawyer in advance.  Typically the contingency rate free ranges from 33%-45% of the recovery.

A contingency fee agreement is a payment arrangement that enables injured victims pursuing legal recourse to have legal representation, even if they do not have the financial ability to pay a lawyer out of pocket. With this payment arrangement, the lawyer agrees to a fixed percentage of any compensation recovered.

Instead of the client paying a retainer or hourly fees over the course of the case, the contingency agreement only permits the lawyer to be paid when the case ends and results in financial recovery for the client. In short, the contingency fee agreement will ensure that you have legal help even if you don’t win your personal injury case and that you don’t have to pay your lawyer anything because your lawyer’s fee is contingent upon winning your case and securing financial compensation.

What Is the Average Contingency Fee?

Contingency fees can differ vastly from one firm to another and often depend on the details surrounding a client’s case. That said, broadly speaking, most contingency fees are between 33 percent and 45 percent of the recovered compensation. For example, let’s say that the lawyer secures a settlement of $350,000 from the liable party’s insurance provider in an auto accident case. If the contingency agreement specifies that the lawyer will get 33 percent of the compensation, your lawyer will receive $115,500, and you’ll receive $234,500 (assuming no case costs need to be reimbursed as well)

Sometimes contingency fee percentages are based on the position of the case when recovery is made.  This fee arrangement is known as a sliding scale. With this option where the fee may increase based on how the case concludes, the following payment structure may apply:

  • In cases that settle and don’t head to trial – If a case can be resolved before filing a lawsuit or before a trial is needed, attorneys usually will agree to be paid a lower percentage of the recovery because less work was required to obtain the settlement.  Usually in such cases the percentage is around 33%.  Each attorney may have a different structure so you should be sure to cover the particulars with your attorney.
  • In cases that go to trial – If a case fails to settle and goes to trial, the lawyer may charge a higher fee, oven 40% ore more. If the lawyer needs to put in more working hours and resources because the case goes to trial, it justifies a higher fee.

To some people, the contingency fee might seem high. On the other hand, surveys state that injured victims obtain higher compensation amounts for their personal injury claims if an attorney represents them instead of handling their claim without a lawyer. For instance, an Insurance Research Council (IRC) survey reported that claimants who had legal representation received 40 percent more than claimants without legal representation.

The survey likewise found that the average insurance settlement is more than three times higher for injured victims with private personal injury lawyers than those who did not have a private lawyer. In addition, 85 percent of the money that insurance providers paid for bodily injuries is to injured victims who worked with private lawyers.

Robert Bohn

Personal Injury Lawyer, Robert Bohn

When a personal injury lawyer accepts a case on a contingency fee basis, the lawyer accepts the risk that they won’t get paid for their services if they don’t win. Knowing this, the lawyer will work on the case to the best of their ability or end up not getting paid for their hard work. Additionally, accepting this risk means that the lawyer believes in the merits of the case and that they can resolve it and obtain fair compensation. The lawyer in a contingency agreement has every incentive to work hard to recover full justice for their clients because the more money they recover, the more they are paid.

Talk to a Skilled Personal Injury Attorney Today

A lot of injured victims simply can’t afford to pay out-of-pocket fees and upfront expenses, especially when there’s no foreseeable limit on these costs. This is why working with a personal injury lawyer on a contingency fee agreement will come in handy. You just need to make sure that the lawyer you’re planning to hire has ample experience with your specific case and that they are capable of taking your case to court if a settlement just isn’t possible.