One of the first questions most injury victims have is whether they can afford to hire a personal injury lawyer. You may be surprised to learn that payment is often structured without upfront costs so that the injury victim can access all necessary medical treatment and ensure her legal rights are protected.
Many personal injury attorneys handle cases for a percentage of the settlement. This is called a contingency fee. The attorney’s fee is contingent upon recovering damages for their injured client’s case. Often, the contingency fee depends on the status of a case when the attorney secures compensation for the client.
Fees are greater in some circumstances than they are in others. That’s because the traditional contingency fee structure acknowledges situations where an attorney relied on his or her expertise and needed to invest more time in a case.
There are many ways to arrange for an attorney’s payment, but once legal rights have been forfeited, the opportunity to try and obtain redress is generally lost forever. Don’t lose your legal rights out of concerns of paying an attorney. Contact a personal injury attorney from Dolman Law Group as soon as possible after you or a loved one has sustained a personal injury.
In This Article
- How Is a Lawyer Paid in a Personal Injury Case?
- Setting a Reasonable Hourly Rate
- What Are the Personal Injury Contingency Fee Guidelines for Florida Attorneys?
- Contingency Fees for Medical Liability Claims
- Some Attorneys Pay Expenses Up Front
- A Contingency Fee Schedule Reflects the Attorney’s Professional Service
- What Does an Attorney Do to Earn a Contingency Fee?
- Why Contingency Fees?
- Aggressive Representation By a New Port Richey Injury Attorney
How Is a Lawyer Paid in a Personal Injury Case?
Most personal injury attorneys do not require accident victims to pay attorneys’ fees out of their own pockets. Instead, these cases are generally paid through a contingent fee agreement, by which a lawyer will be paid an agreed-upon portion of the total settlement.
This gives the lawyer even more incentive to secure as much compensation as possible for her client. This also helps a client share the risk of loss with the attorney. If there is no award through settlement or after a trial judgment, the attorney will receive no payment.
How Contingency Fees Work
Contingent fee agreements are also subject to litigation costs and court fees. These can include the fee to file a lawsuit, expert witness fees, copying costs for medical records, and other such expenses. It is important to know whether your attorney’s contingent fee will be calculated before or after such expenses are deducted from the total settlement amount.
Settlements can also be subject to medical liens. While many providers will accept private health insurance, some will secure their fee by filing a lien against the personal injury award. This obligates the attorney to pay the lien before distributing the settlement proceeds to the injury victim.
Check with your attorney and medical providers to be sure you understand how they will be paid, what claims exist against your settlement, and if there are any other financial issues that must be addressed.
How Hourly Fee Agreements Work
Occasionally, a personal injury lawyer will prefer to be paid through an hourly fee agreement but this is much less common. In this case, a lawyer has a set hourly rate. The client then pays the attorney a deposit and signs a contract agreeing to the rate. The attorney will send the client itemized statements of the time spent on the case.
The deposit is moved from the client’s trust account as the attorney works through it. When the funds are exhausted, the attorney either requires another deposit or sends the client monthly bills to be paid.
Hourly fee agreements are common in criminal defense and family law cases. In personal injury cases, however, they are rare, and contingency fee agreements are used much more often.
Setting a Reasonable Hourly Rate
If a personal injury attorney does choose to work at a set hourly rate, he is bound to set a rate that is reasonable. Attorneys who fail to do so are subject to sanctions by the state bar for this violation of ethical obligations.
There is no single test for what makes a fee “reasonable”, but Rule 4-01.5 of the Florida Rules of Professional Conduct define several factors for a court or ethics committee to consider. These include:
- The time and labor required, the novelty, complexity, and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
- The likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;
- The fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;
- The significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained;
- The time limitations imposed by the client or by the circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;
- The nature and length of the professional relationship with the client;
- The experience, reputation, diligence, and ability of the lawyer or lawyers performing the service and the skill, expertise, or efficiency of effort reflected in the actual providing of such services; and
- Whether the fee is fixed or contingent, and, if fixed as to amount or rate, then whether the client’s ability to pay rested to any significant degree on the outcome of the representation. (It is worth noting that contingent fees are generally allowed to be higher than set hourly or flat fees because the attorney is bearing a risk of loss in the event that no financial award is made.)
If you are considering an hourly fee agreement with an attorney, make sure to research these issues before committing to the payment of her hourly rate. Consider speaking with other local attorneys to compare their rates.
Carefully weigh the pros and cons of an hourly fee versus a contingent fee agreement. Get an estimate of how many hours of work the attorney expects to take to perform specific tasks (such as negotiating with the insurance company, drafting a complaint in the event a lawsuit must be filed, etc.).
What Are the Personal Injury Contingency Fee Guidelines for Florida Attorneys?
Contingency fee agreements made in Florida must comply with The Florida Bar Rules of Professional Conduct. The rules require that clients sign written contingency contracts that spell out the specific fee percentages involved.
The agreement must also confirm that the injured client reviewed and signed an acknowledgment of their Client’s Rights, which explain that a client may “bargain about the rate or percentage” of the fee, just like they could in any contract for services.
Contingency fee contracts must contain a cancellation clause. This means that the contract must say that if a client cancels the contingency agreement within three business days they won’t owe the attorney any fees. However, they still must reimburse the attorney for any expenses that the attorney advanced on their behalf.
The rules also establish a standard structure for Florida personal injury contingency fees, and require that an agreement containing higher fees be approved by a court: The guidelines suggest the following fee structure:
For a case where the other side’s attorney hasn’t yet filed an answer to their client’s lawsuit, the personal injury attorney may charge:
- 33 1/3 percent for settlements up to one million dollars, and
- 30 percent of the settlement amount between one and two million dollars, and
- 20 percent of the settlement portion that exceeds two million dollars.
A personal injury attorney may charge a higher contingency fee once the other side files an answer to their client’s lawsuit, responds with an arbitration or settlement request, or the deadline to answer their client’s complaint expires. At this point the attorney may charge:
- 40 percent of damages up to one million dollars, and
- 30 percent for the damage amount between one and two million dollars, and
- 20 percent of the portion of the damages that exceeds two million dollars
The contingency fee structure also changes if the other side admits liability and the court holds a trial only to determine the amount of damages. If this happens, the attorney may charge:
- 33 1/3 percent fee on damages up to one million dollars, and
- 20 percent fees for the damages between one and two million dollars, and
- 15 percent of damages in excess of two million dollars
An injured person’s attorneys also may receive an additional 5 percent in fees for recoveries received after an appeal or following some other post-judgment action.
Contingency Fees for Medical Liability Claims
Article 1 §26 of the Florida Constitution sets contingency fee guidelines for medical injury cases. It outlines legal fees that are based on the injured person’s “right to fair compensation.”
Any “reasonable and customary” costs an attorney expends on a client’s behalf are recoverable over and above the amounts described in the constitution. For a medical liability claim, an attorney may charge:
- 30 percent of any damages up to 250,000 dollars (plus expenses) and
- 10 percent of all damages over 250,000 dollars (plus expenses)
If they choose, an injured client may permit their attorney to collect a larger percentage of their recovered medical liability damages. Clients must sign any fee increase agreement for it to be valid.
Some Attorneys Pay Expenses Up Front
Attorneys may incur a number of expenses while preparing a case for negotiation, mediation, or trial. The client is ultimately responsible for these costs but some attorneys will agree to pay for them up front.
Here are just a 10 of the typical expenses necessary to investigate, negotiate, or try a case
- Court costs and fees
- Trial exhibit preparation
- Industry expert costs to analyze product defects
- Vehicle accident reconstruction experts
- Independent medical examinations
- Expert reports and testimony
- Physician’s narrative reports
- Economic experts to calculate future expenses
- Court reporter costs for depositions
- Video deposition costs
In keeping with traditional contingency arrangements, attorneys must explain the potential costs to their clients. Some law firms pay costs and fees up front and deduct them from the final settlement amount. Other firms won’t proceed with a case until the plaintiff pays the necessary costs and expenses.
A Contingency Fee Schedule Reflects the Attorney’s Professional Service
The Florida Bar didn’t set contingency fees based on arbitrary standards. The fee structure recognizes that personal injury attorneys do a lot of work for their injured clients. No two personal injury cases are alike. A simple two-car auto accident is less complicated than a product liability case. Still, all cases require substantial attention before they are settlement- or trial-ready. The contingency fee schedule reflects the knowledge, experience, and expertise it takes to prepare a case for its ultimate outcome.
When an attorney presents a case on an injured person’s behalf, they can’t afford to do a half-hearted job. Even if the attorney hopes to negotiate a settlement, they must prepare the case as though they might have to present it in a courtroom some day. An attorney must know the evidence and understand all of the issues. They must recognize each defendant’s role in causing an injury-producing incident and be ready to prove how and why all of the other parties are legally liable for their client’s damages.
A good deal of the work to develop a case happens during the initial period after a client’s injuries occur. That’s when a personal injury attorney needs to determine if an injured person has a valid case and whether they have recovery options. During the life of an active case, it’s not usually just the attorney doing the work. Often the attorney relies on paralegals, secretaries, law clerks, investigators, or other paid support staff. The contingency fee must cover all of these costs.
What does an Attorney Do to Earn a Contingency Fee?
When a client signs a contingency agreement, they get access to a personal injury attorney and all of their law firm’s resources and expertise. Personal injury attorneys understand complex liability and statutory issues. They use their knowledge to evaluate each case and they work diligently with the intent of getting their client the best settlement possible.
Personal injury attorneys handle auto accidents, premises liability incidents, product liability injuries, workers compensation claims, and other injury cases. Before they receive a single dollar of a contingency fee payment, they perform a long list of professional services, often including:
- Investigating the accident. An attorney or a professional investigator obtains witness statements, site photographs and diagrams, police reports, and more. They find available information and evidence to determine what happened, why it happened and who is at fault.
- Evaluating the other parties’ liability. The attorney reviews statutes, legal standards, case law, and more so that they can make a realistic evaluation of the liability and comparative fault of everyone involved. The attorney’s legal research helps them determine each party’s negligence and present a solid case for successful damage recovery.
- Evaluating the damages. An attorney reviews medical bills and expenses, hospital records, doctor’s reports, rehabilitation reports, narrative medical reports, and expert evaluations. The attorney talks to their injured client about the client’s pain, healing process, and personal limitations. The attorney studies prior cases, judgments, settlements, and economic projections about potential future costs and uses what they learn to determine a case’s true value.
- Negotiating settlements. When a client is ready to settle, an attorney presents the client’s demands to the other parties in the case. The attorney usually works directly with a liability insurance carrier and tries to resolve the case without going to court, if possible. Negotiation may last weeks or months, but does not always end in an agreement.
- Filing a lawsuit. The litigation process can be exhausting and frustrating for an injured client. That’s why a personal injury attorney makes a good faith effort to settle a case before the statute of limitations runs. When defendants won’t settle for a reasonable amount, an attorney must draft a lawsuit and file it with the local court to protect the injured client’s legal right to recover damages. A lawsuit shows the defendants that the injured person and their attorney are serious about pursuing a liability claim.
- Taking the case to mediation. Florida courts require that parties first attempt to resolve a case through Mediation. Mediation is a reasonable alternative to an expensive trial. The process requires that all parties, their insurance carriers, and their attorneys meet at a neutral location to discuss the case. A neutral mediator facilitates negotiation. The parties share information and attempt to reach an agreement.
- Resolving the case. If the parties can’t negotiate or mediate a settlement, they eventually resolve the issues at trial. In a bench trial, a judge hears the evidence and makes a decision. In a jury trial, the judge oversees the trial and the jury decides the outcome.
- Executing documents. After a settlement or court judgment, the attorneys exchange releases, dismissal orders, and other closing documents. The personal injury attorney receives the settlement check and distributes the funds to the plaintiff.
Why Contingency Fees?
Lawyers who bill by the hour charge fees that vary from a low of 100 dollars per hour to a high that can exceed 500 dollars per hour or more. If injured clients had to pay for personal injury attorneys by the hour, many wouldn’t have the resources to recover damages for their injuries. Negligent people and entities could walk away without paying for the damages they caused.
According to an excerpt from The History of Contingency and the Contingency of History, attorneys began to accept contingency fees a few centuries ago. Apparently, the “highly placed” people of 18th century England didn’t like the idea that poorer people could have access to the court system through contingency fee arrangements. They viewed the practice as a plague.
In Colonial America, on the other hand, many saw contingency fee legal representation as a positive. They believed that ordinary citizens deserve legal representation.
Oddly enough, the earliest contingency fee opponents from a few centuries ago rationalized their position the same way some critics do today: they believed that access to counsel on a contingency basis would lead to a flood of lawsuits.
Aggressive Representation By a New Port Richey Injury Attorney
Whether your personal injury was caused by a vehicle or a workplace accident, medical malpractice, or other factors, you need an experienced personal injury attorney who will aggressively defend your right to compensation for your losses.
Dolman Law Group has over 46 years of experience in protecting the rights of injury victims in and around the New Port Richey area. Call (727) 477-9660 or contact us online to schedule your free consultation with a personal injury attorney today.
Injury victims across southern Florida trust our professional staff, comprehensive legal knowledge, and superior customer service.