Injury Lawyers work on contingency. The injury lawyer percentage is a portion of the recovery at the end of the case. There is no upfront fee for their services. Some states limit the percentage amounts. Normal fees are between 33.3% and 40% of the recovery. Some firms charge 45% or 25%. This blog post breaks down contingency fees and how they are paid and provides some tips.
Pre-Litigation versus Litigation Fees
Normally a lawyer will charge a lower rate if the case resolves without a lawsuit. This is called pre-litigation. It usually involves less work to resolve a case without litigation so it makes sense the fee is lower. A pre-litigation case can take six month to a year. Some litigation cases take multiple years. That is why the injury lawyer percentage is higher for litigation.
My fees are between 33.3-35% for pre-litigation and 40% for litigation. I have seen big firms out here charging 45% for pre-litigation and 45% for litigation. That is WAY too high in my opinion. You are basically paying for their tv ads and marketing budgets if the lawyer is taking that large of a cut.
Be aware of lawyers that file a lawsuit early on just to jack up the fee. It is not in the best interest of the client to do it, but some out there are doing it.
Cut Rate 25% Fee Lawyers Are Too Low
I occasionally hear of lawyers advertising 25% fees. I question what type of advocacy the client is getting at cut rate fees. My concern here is the lawyer is incentivized to resolve the case fast and move onto the next one. I’m not saying this happens in every case, but I want the lawyer to have some skin in the game. If the injury lawyer percentage is too low it can be a problem and it is my position that 25% doesn’t cut it. Pun intended!
Big Firm 45% Rates Are Too High
I can’t say enough bad things about lawyer that are charging 45% for pre-litigation work. That injury lawyer percentage is too high from my view. However, its not their fault. They are taking orders from the advertising lawyer at the top of the firm. However, it is my opinion the client is getting ripped off at the 45% rate to pay for the big firms advertising budget. The only exception for a 45% rate is the quality of the lawyer on a medical malpractice or sophisticated, specialized case. There are maybe three lawyers in town that I would personally pay this rate to on a case if my family was involved in a tragedy involving malpractice. On car crash, truck crash, dog bites, slip and fall cases paying this rate is too much.
But does a higher fee mean a better lawyer? Once you hire a big injury firm it is luck of the draw who gets your case. You could get the lawyer that has been there six months and kinda sucks. You could get the main litigating lawyer. I still think that main litigating lawyer isn’t worth 45%. And I’ve been offered to be that guy at one of these outfits. It just doesn’t make sense to me.
Another consideration is the financial package of the lawyer who gets your case. Big firm lawyers can be incentivized to resolve the case for less than what it is worth. For example, if the junior lawyer gets 10% of the lawyer fee and the case is worth $1,000,000.00 the baby lawyer would get $40,000.00. But if the last offer on the case is $800,000.00 the percent for the baby lawyer is $32,000.00. Is the lawyer going to risk $8,000.00 even though the difference in those numbers is $120,000.00 in the clients pocket? You need to look at incentives which is difficult to do.
Here is a link to the American Bar Association discussing rates: https://www.americanbar.org/groups/legal_services/milvets/aba_home_front/information_center/working_with_lawyer/fees_and_expenses/
I am always happy to be transparent about the fees that are charged at Dettman Law. Consultations are free and I can be reached at 502-779-9998 or bdettman@dettmanlawgroup.com
