Most people who need a lawyer can anticipate this need coming. In personal injury cases, however, the need for a lawyer arises from unforeseen circumstances.
Those hurt because of another's negligent or reckless behavior are entitled to recover damages from the wrongdoer. Still, the victims probably haven't been saving to pay an attorney for such an occasion.
Because of the unique nature of personal injury cases, and the right of injured parties to seek compensation, injury attorneys don't usually ask for up-front payment when they take the case.
Instead, most injury attorneys take the case on contingency, meaning the lawyer gets paid when the victim gets paid. What if you lose your case, however? Do you owe your lawyer even though you didn't win?
If a personal injury case loses, then the fee structure will determine how much, if any, they will have to pay their lawyer. Many personal injury lawyers are paid a contingency fee.
This means that if the case loses, these attorneys receive nothing. Some, however, will charge upfront or an hourly rate. If the case fails, these attorneys will keep the fee.
Simply put, if a personal injury case does not recover compensation, the personal injury lawyer's fees will depend on the fee agreement. There are several different types of fee agreements, such as the following:
- contingency fee;
- retainer fee;
- flat rate;
- hourly rate;
- retainer fee.
Victims who want to create an attorney-client relationship with an attorney to file a personal injury lawsuit must understand the fee structure. It's an essential part of the agreement they will sign. The fee agreement determines whether plaintiffs must pay their lawyer if their case does not recover compensation.
How Are Personal Injury Lawyers Paid?
The vast majority of personal injury lawyers work on contingency fees, meaning they will get paid a certain percentage of the amount won in the case. However, suppose the case does not recover any compensation. In that case, the lawyer is not entitled to a fee.
Generally, the contingency fee structure between a client and a personal injury attorney will range from 30% to 40%, which means if you win your case, the attorney will take the agreed-upon percentage from the winnings as their fee.
Sometimes, the fees can vary depending on whether the case goes to trial. For example, your agreement may set forth a 35% contingency fee if your case settles before trial and a 38% fee if your case goes to trial and you win.
A fee percentage of 33 percent is a standard contingency fee in personal injury claims. Whether the attorney's contingency fee comes before or after subtracting expenses can significantly affect what the client ends up receiving.
Some personal injury lawyers use a sliding scale for their contingency fee. This fee structure usually charges a lower rate for cases that settle early. However, the contingency fee will increase as the claim reaches each successive stage.
What Are California Contingency Fees?
Each state has different laws concerning lawyer contingency fees. However, under the law, personal injury attorneys and clients' contingency fee agreements should be in writing.
California's Business and Professions Code 6147 says, “(a) An attorney who contracts to represent a client on a contingency fee basis shall… provide a duplicate copy of the contract, signed by both the attorney and the client. The contract shall be in writing and shall include… (1) A statement of the contingency fee rate that the client and attorney have agreed upon. (2) A statement about how disbursements and costs incurred in connection with the prosecution or settlement of the claim will affect the contingency fee and the client's recovery. (3) A statement as to what extent, if any, the client could be required to pay any compensation to the attorney for related matters that arise out of their relationship not covered by their contingency fee contract. This may include any amounts collected for the plaintiff by the attorney.”
What Are Common Fee Structures for Injury Attorneys?
In addition to the contingency fee structure, you might encounter other fee agreements in seeking an attorney for your personal injury case, such as the following:
Flat Rate Fee Structure
- Flat rate fees are generally paid before the commencement of legal services. These fee structures are uncommon in personal injury cases and usually concern legal services for routine matters that can be resolved quickly. These are generally meant to be paid upfront before the attorney has done any work. Regardless of the outcome, they receive their fee under this agreement.
Hourly Rate Fee Structure
- Hourly rates are probably what most people think of when they think of attorney fees. An hourly rate will often be billed monthly to the client and is sometimes used in personal injury cases or ongoing work. Attorneys who charge hourly fees are entitled to payment for all work performed, even if they lose the case. Some will split the hourly rate to bill by a portion of an hour, sometimes as small as one-tenth of an hour.
- Retainer fees constitute a method of payment where the client pays the total hourly rate upfront. The attorney and client agree to a predetermined amount, and the lawyer collects their hourly rate from the already paid sum. Some lawyers require a retainer. The retaining fee is often enough for a significant amount of legal work. As they work, they will draw the funds from the retainer fee hourly or even a flat fee.
What Are Some Additional Costs Related to Your Case?
If you've entered into a contingency fee agreement with your attorney and lose, you probably won't have to pay your lawyer for their time. That being said, you might still have to pay for other costs associated with administering your case. Additional costs may include the following:
- Administrative fees;
- Court filing fees;
- Deposition costs;
- Case Research fees;
- Expert witness fees;
- Document fees;
- Police report fees;
- Medical record fees;
- Stenographer or court reporter fees;
- Transcripts of testimony;
- Trial exhibits;
- Postage fees.
These costs will range in amount, but they can add up during your case and subsequent trial preparation. For example, filing fees can amount to a few hundred dollars per filing, and case research may require acquiring certified copies of medical records or police reports.
Even when winning your case, these costs can still impact your ultimate payout. Your contingency agreement may call for the attorney's percentage to be taken from the gross payout before subtracting costs, leaving you with the burden of the costs.
The costs are deducted from the winnings if the case recovers compensation in a settlement or jury award. However, the attorney must take on the charges if the personal injury case loses.
Alternatively, the agreement may call for the attorney's percentage to be taken after costs are deducted, ensuring the attorney and the client share some cost burden.
Your fee structure, whether contingency or another arrangement, should be written. If you have questions, you shouldn't hesitate to ask, and your lawyer shouldn't hesitate to explain the details thoroughly.
Injury Justice Law Firm works on a contingency fee basis, and we offer a free case evaluation. We are located in Los Angeles, California.