How Do I Pay An Injury Lawyer?

Short Answer: Contingency. Most, if not all, personal injury and car crash lawyers work on contingency. What that means is the lawyer takes a percentage of the recovery at the end of the case. There is no up front fee with a contingency payment. This blog post breaks down how contingency fees are paid on personal injury cases.

What Is A No Fee Guarantee?

A contingency fee agreement, by definition, means that if your lawyer does not make a recovery you do not pay. It also means the more the lawyer gets for you the more the lawyer is paid. Firms advertise “No Fee Guarantee” all over the place, but its a common way of handling injury cases. In fact, if a personal injury lawyer tried to get you to pay by the hour that is a good indication to me they don’t believe in the case and are trying to rip you off.

How Much Is A Contingency Fee?

I have seen fees ranging from 25% up to 45%. Usually there are two different rates. The first rate is for pre-litigation cases. This means that the lawyer is able to resolve the case without filing a lawsuit. It takes less time to do this so the fee is normally the lower of the two rates. If the lawyer needs to file a lawsuit it can take 2-3 years (or more depending on facts) to resolve the case. As a result, the fee normally goes up.

What Is A Fair Contingency Fee?

I see higher fees at bigger firms. Two large firms in town charge 45% for pre-litigation AND litigation. 45% for pre-litigation is very aggressive in my opinion. My normal pre-litigation rate is 33.3% to 35%. The higher rates the big firms charge pay for the big advertising budgets they have. So what is the value of that extra percent? I’m not a big fan of negative thinking but you are being ripped off if you are paying those rates. It is just money coming out of the clients pocket so their lawyer can market more. I would ONLY pay 45% for pre-litigation if I was getting a specific lawyer for a specific case. There are some areas of law where the higher rate is justified. Birth injury, admiralty, or aviation are the three that come to mind.

On the other end of the spectrum you have some lawyers advertising 25%. This is a nice marketing gimmick in my opinion. The catch here is the lawyer might be incentivized not to work the case as hard because the payout is lower.

Why Is the Litigation Fee Higher?

I do think a higher rate for litigation is justified. Most pre-litigation cases resolve within 4-12 months. When I file a lawsuit it is not for my health. It takes a lot more work. It is also me putting my money where my mouth is and saying “let me swing at this insurance company.” Litigation cases are often more difficult because liability or causation are in dispute. There are some cases where the lawyer can work for 3 years and NOT make any recovery because they are swinging at a very difficult factual pattern. For that reason the higher rate makes sense to me.

Personally, I would never pay 45% for pre-litigation. There would need to be a very good reason for me to pay that as a litigation fee. My firm charges 40% for litigation cases as I believe that number to be the most reasonable.

How Does a Contingency Fee Work – Mathematically?

Lets say your lawyer is able to resolve the case for $100,000.00. Here are some breakdowns:

45% Fee you pay $45,000.00 to the lawyer. 35% Fee you pay $35,000.00 to the lawyer. There are also costs that come out of a case. The lawyer puts up the costs. If the lawyer doesn’t make a recovery the lawyer eats the costs. On a pre-litigation simple case the costs average maybe a couple hundred. On a litigation case the costs could be a six figure number. Personal injury lawyer take chances on cases and if they lose the costs should be the lawyers problem. That said, during the pendency of a case the lawyer is working with no guarantee of any recovery. That is why the rates are not “low.” We sometimes work on cases for three years without getting paid up front.

Who Should I Hire For My Contingency Injury Case?

Hire a personal injury lawyer that you like and trust. Make sure to research the lawyer and see if they actually goes to court or just settles cases fast and cheap. Don’t get ripped off by a big firm charging a high fee just so you can pay for their advertising budget. You also want to make sure the lawyer you hire is going to respond and communicate with you. Plenty of lawyers are either too big or too small for their britches. Too little experience and you may suffer from ineptitude. Too much experience and the lawyer might be over lawyering. There are obviously exceptions.

For follow up questions on contingency rates email bdettman@dettmanlawgroup.com. Consultations are always free and I only work on contingency.