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Understanding how and what personal injury attorneys charge for their services is an important first step to deciding whether to pursue a personal injury lawsuit. Typically, personal injury lawyers use either a contingency or an hourly fee structure. However, the cost of handling your case extends beyond your lawyer's rates. Court costs, expert witnesses, and other expenses add to the total cost of your suit.
This is the most common payment structure used by personal injury attorneys. A contingency fee means you only pay your attorney after the successful completion of your case, meaning that, if you don’t win, he or she doesn't get paid. For this reason, attorneys who work on contingency are highly selective when choosing which cases they'll represent.
There is no set contingency percentage (state law determines maximums), but the most common is one-third of the settlement of award. This means that you pay the lawyer one-third of any award amount. In a $100,000 settlement, your attorney receives $33,333. This is solely the price for handling your case; it does not include extra fees or charges. During your initial consultation, determine whether the fee is based on the gross award or net judgment. The gross amount is before deducting expenses; net is after deducting expenses.
Contingency fee arrangements have two big advantages. First, you don't pay the attorney's fees unless you win your case. Second, since your attorney's payment depends on the award amount, he or she has extra motivation to secure the largest settlement possible. The only real disadvantage is emotional; you may feel the attorney did not really earn that fee, especially if the case settles quickly.
You pay an attorney's hourly attorney whether you win or lose. Attorneys who bill hourly have a set rate, usually between $100 and $300 per hour, billed in either 10- or 15-minute increments. Typically, you pay an upfront retainer and then monthly payments as the case progresses. This payment structure is far less common, as attorneys charging hourly make less money than if they'd handled the case on contingency.
A lawyer offering to represent you on an hourly basis may be a sign that you have a weak case or that the settlement will be low. This is especially true if that attorney represents other clients on contingency. Do not hesitate to ask him or her why they won't take your case on contingency, and for an honest appraisal of your chance of winning your case.
Attorney Fees v. Costs
Attorney fees and costs are not the same thing. The fee is the lawyer's charge for his or her time. Costs are the expenses incurred while handling your case and include a wide variety of items. Some of the more common costs are:
- Court fees
- Obtaining records
- Expert witnesses
Though fees are waived if you lose your case, costs generally are not. Before hiring an attorney, ask him or her whether their contingency fee includes costs and your financial responsibility whether you win or lose.
Create a list of questions before meeting with an attorney, to ensure you don't forget anything, and bring a pad of paper and a pen to record his or her answers. You should also keep a journal of the ways your injury has impacted your daily life, documenting items such as the time spent traveling to doctor appointments, expenses incurred, and any activities you can no longer enjoy. You also want a written agreement on the costs and fees you should expect, signed by both you and the lawyer you choose to represent you.
Some questions to consider asking:
- Do you work on contingency or charge hourly?
- If contingency, is the fee calculated based on the gross or net settlement amount?
- If hourly, do you have other clients you represent on contingency?
- What costs am I responsible for?
- What costs do I have if I lose?
- What costs do I have if I win?
- Is my case viable?
- What is my case worth if it goes to trial?
- What is my case worth if it settles?
Schedule a Free Consultation
If you believe you have a viable personal injury case, schedule a free consultation with a personal injury lawyer. Take your list of prepared questions, as well as any documentation you may have. This gives the attorney a good idea of the strength of your case.