Dealing with an injury is hard.
The bills are stacking up. Work is piling up. You’re taking forever to heal. The last thing anyone needs on top of that headache is costly attorney fees before you even file your claim.
Here’s the good news…
Contingency fees exist for that very reason. Every injury attorney in the country works on contingency fee arrangements and knowing how they work is perhaps the single most important thing a claimant should know before speaking with legal counsel.
In this article:
- What Is a Contingency Fee?
- Why Injury Lawyers Work on Contingency
- How is the Percentage Calculated?
- What Doesn’t the Fee Cover?
- Questions You Should Ask Before Signing
What Is a Contingency Fee?
Put simply: a contingency fee is an attorney fee that only gets paid if you win your case.
Easy.
The attorney and their legal staff will take a percentage of your settlement or court award and call it a day. No win. No fee.
It’s this type of payment agreement that makes pursuing an injury claim possible for so many people. It allows plaintiffs to work with a top personal injury trial lawyer without spending money they simply don’t have. That means injury victims can contact a Houston personal injury lawyer and secure skilled representation without any upfront financial risk.
Why Personal Injury Trial Lawyers Work on Contingency
Here’s a secret.
Clients are paying an attorney hourly rates BEFORE they ever see a penny from their case. That type of arrangement isn’t possible for most injury victims.
Hourly billing simply doesn’t work for injury claims.
Imagine going to work one day and coming home with $10,000 less in your bank account. Scary thought, right?
That’s essentially what you do when you agree to pay an attorney by the hour. You give them free reign to charge you for their time — regardless of how much money you recover.
When a lawyer works on contingency, however, their interests align perfectly with yours. The more they get you, the more they earn.
It also means that your lawyer has every incentive to maximise your recovery because their fee is directly tied to how well they do in your case.
Bottom line: Lawyers who take cases on contingency have every motivation to secure the highest possible settlement or verdict for their clients. That gives you a major advantage at the negotiation table.
How is the Percentage Calculated?
This may come as a surprise to some readers, but there is a standard contingency fee in personal injury law.
Most attorneys charge around 33%. Give or take.
That number is widely expected when hiring a lawyer — which means changing it can be a major point of contention during settlement negotiations.
The 33% figure is flexible, however. Certain factors influence your fee:
- Whether or not your case goes to trial. Fees are usually lower if you settle early. Once a lawsuit is filed and a trial date is on the horizon, law firms often bump their rates up to 40%.
- How complicated your case is. A workers comp claim is far easier to prove than medical malpractice. Product liability and cases with multiple defendants fall into this category as well.
- The attorney’s experience level. You get what you pay for. More experienced personal injury attorneys can — and often will — charge more on your case.
- Your state’s location. Every state handles personal injury lawsuits differently. That can impact your attorney’s fees as well.
If 95% of all injury cases settle before trial, however, the former percentage should apply to you.
Needless to say; read your agreement carefully before signing anything.
What Doesn’t the Fee Cover?
Ok. So your attorney takes X amount if you win your case. Everything else is gravy, right?
Wrong.
Keep in mind that this percentage only covers your attorney’s legal fee. It does not include any out-of-pocket expenses you will incur while preparing your case.
Certain costs are typical during a personal injury lawsuit. Here are some common examples:
- Court filing and administrative costs
- Retrieving medical and police records
- Hiring expert witnesses
- Deposition and court reporter fees
- Investigative expenses
- Documentation preparation and filing costs
These numbers can quickly add up. Most law firms will cover them upfront — and then deduct them from your settlement AFTER attorneys take their percentage.
Pay attention to this line in your agreement.
Either: The attorney takes their percentage first, then billing expenses.
Or: The attorney deducts case expenses, then takes their percentage.
Using a hypothetical 33% percentage, here is what that looks like:
Expense billing occurs after the attorney takes their percentage
The attorney collects $33,000 then deducts $5,000 in expenses.
Total to claimant: $62,000
Expense billing occurs BEFORE the attorney takes their percentage
The attorney deducts $5,000 from $100,000, leaving $95,000. The attorney then collects 33% from that number.
Total to claimant: $63,650
Not a huge difference. But it matters if your case expenses are $50,000+. Double check with your attorney. Make sure everything is in writing.
Questions to Ask Before Signing
If you’ve ever spoken with an injury lawyer, you know not every agreement is cut-and-dry.
Ask questions. Seek clarification. Whenever you sign a contract, knowing exactly what you’re getting into is step one to a successful relationship.
Now is no different.
Hold your attorney to the following before agreeing to work with them:
- What percentage am I being charged? Does this increase if we go to trial?
- Who covers case expenses if we lose?
- Are expenses deducted before or after the contingency percentage is applied?
- Is there a sliding scale? What changes my percentage?
- Have all the details of my agreement been explained? Can I receive a copy before signing?
Remember: a reputable lawyer has nothing to hide. Spending an hour together answering these questions benefits you both.
Statistics show that plaintiffs who hire attorneys recover three times more on average than those who don’t. Plus, 70% of personal injury claims are awarded a payout. Having an attorney dramatically improves your chances of joining that group.
And make no mistake about it — contingency fee agreements are what allow injury victims to work with a top-tier attorney in the first place.
The Bottom Line
Don’t let expensive attorneys scare you away from filing your rightful claim.
Contingency fees allow you to work with a lawyer regardless of your financial situation. They give you every incentive to recover the maximum amount of compensation possible. And they empower you to hold big-business and negligent parties accountable for their actions.
Remember:
- Most firms charge around 33%. Some will go to trial.
- Case expenses are NOT included in the percentage
- How expenses are deducted can change your take-home amount
- Don’t be afraid to ask questions
- Retain legal counsel to recover more compensation
Understanding contingency fees can help you confidently walk into (and walk away from) any attorney’s office. It’s that simple.
