One of the most common questions we receive from prospective clients is: How much does it cost to hire a personal injury lawyer? While most lawyers off a few different types of fee arrangements, how much your attorney gets paid often depends on the outcome of your case. Read on to learn why.
What Are Contingent Fees?
Many personal injury lawyers provide their services on a contingent fee basis. This means that the client doesn’t pay the lawyer for their services upfront. The lawyer only gets paid if they help their client actually recover damages in the case. Usually, the settlement or award check is sent directly to the attorney. The attorney then informs the client that the check has arrived and presents the client with an itemized accounting of the attorney’s fees for working on the case, as well as any expenses that the attorney has paid on behalf of the client during the course of the case.
Lawyers working on a contingent fee basis generally take one-third (or 33 percent) of the full settlement amount for their time and efforts, although they may take up to 40 percent, depending on the fee structure the client agreed to and the amount of work that they put into the case. Some attorneys offer a sliding scale of contingent fees, which allows them to take the standard one-third in cases where a settlement is negotiated before a lawsuit is filed, or to take a higher percentage in cases where a lawsuit is filed before the settlement is reached or where the case actually goes to court.
When a client decides to hire a personal injury attorney, the attorney will present them with a document explaining their fee structure. The client and the lawyer both sign this agreement so that there will be no surprises when the case is over and the attorney takes their fee from the settlement check.
Florida requires attorneys to provide their clients a list of client rights in writing when they offer a contingent fee agreement. Those rights include:
- The right to bargain with the attorney in order to reduce the percentage that the attorney will receive if they are successful in resolving the case.
- The right to back out of the contract they signed with the attorney within three days after signing it.
- The right to know about the lawyer’s education, training, and experience before entering into a contingent fee contract with them.
- The right to know who will be working on the case alongside the attorney.
- If the lawyer asks the client to pay a deposit before the conclusion of the case, they have the right to ask reasonable questions about how that money is being spent.
- The right to be told about any adverse impacts that may come from losing the case, including having to pay court costs or the defendant’s legal fees and costs. In cases where the lawyer agrees to take on a contingent fee basis, the client will not have to pay fees for the lawyer’s time working on the case if they don’t get a settlement or award. But there are usually other costs that the client will ultimately be responsible for, like court filing fees, costs to collect evidence, and other expenses related to the case.
- The right to receive and approve a closing statement of the costs related to the case.
- The right to ask for progress reports on the case.
- The right to make a final decision about whether to accept a settlement offer in the case.
- The right to report inappropriate or excessive fees to the state bar.
Other Costs to Consider
As mentioned above, there are other legal costs involved in your case besides the lawyer’s fees. These costs, which the lawyer often agrees to pay upfront and then deduct from your settlement, may include:
- The cost of obtaining copies of your medical records
- Copies of police reports
- Fees charged by expert witnesses, which may come out to hundreds of dollars per hour and will likely be the second highest cost, behind the attorney’s fees
- Court filing fees
- Payments for investigators
- Costs associated with depositions, including fees for the transcriptionist and for renting the room where the depositions take place
- Costs associated with creating trial exhibits
- A daily stipend for jurors if your case goes to a jury trial
Other costs that occasionally arise in personal injury cases include:
- Medical liens, which providers file to ensure that their own fees are paid in the event of a successful settlement of your case.
- Attorney liens, which are an issue if you fire one attorney in the middle of your case and select another to conclude your case. The first attorney has the right to place a lien on your settlement in order to recoup the costs that they paid for while working for you.
These additional costs can be quite high in lengthy cases, and it is not unusual to see up to 60 percent of the settlement in a personal injury case go toward the attorney’s fees and paying the costs for legal services. When hiring a personal injury attorney, you should be sure you understand whether your lawyer will deduct their fees from your settlement amount before or after legal costs have been paid as that arrangement may greatly impact the amount you’re charged for the lawyer’s contingent fee.
Is There Another Option?
Although an hourly fee structure is common in criminal cases, it is rare to find a personal injury attorney who charges clients by the hour. However, the few personal injury attorneys who provide their services for an hourly rate are required by law to keep their hourly fees reasonable. As explained by the Florida Bar, the factors that must be considered by an attorney when developing an hourly rate are:
- The time and labor required, the novelty, complexity, 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; and
- 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.
Lawyers are required to explain their fees in writing for clients they have not regularly represented, including nonrefundable fees.
How to Reduce Your Legal Costs
If you’re worried about the amount of your settlement or award that will go toward paying the lawyer’s fees and costs in a contingency fee agreement, there may be some steps you can take to reduce those costs, such as:
- Negotiating a lower percentage contingency fee: If you’ve done quite a bit of the legal legwork ahead of time in your case, like obtaining copies of the relevant documents, the lawyer will not need to do as much work, which could prove to be a strong negotiating point when you and the attorney are determining their fee.
- You can talk to your lawyer about paying a reduced percentage for their fees if a fair settlement is negotiated and the case doesn’t go to trial.
- You can arrange for hourly pay up to a certain amount. If the lawyer is unable to negotiate the settlement within the agreed upon time, you can switch to a contingency fee.
- Talk to your lawyer about the possibility of a limited fee if an acceptable settlement is achieved before much work is done.
- Pay an hourly fee for advice only, if you’re willing to negotiate on your own and are prepared for the risk of settling for less than your case is worth.
A lawyer will rarely offer to reduce their fees unless you bring the subject up first, and most are reluctant to offer partial services because they are legally responsible for advice they give to you and won’t have control over how that advice is used. Some of the reasons that an attorney will entertain offering lower fees include:
- A low risk case in which liability has already been established and all that remains is determining a fair settlement amount.
- A small settlement. Often, when the settlement is likely going to be a low dollar amount, the attorney will be more willing to negotiate their fees in order to avoid leaving their client without enough compensation to cover their injuries.
- The client already organized an accident case file with many or all of the documents the attorney needs for the case.
- The case is likely to bring in a high verdict with a large amount of punitive damages. Attorneys representing these cases may be willing to participate in a sliding fee contingent plan in which they take a higher percentage up to a certain dollar amount and a lower percentage once the award passes that amount.
You will very likely fail to convince a lawyer to reduce their fees in high risk cases, such as when you bear some of the responsibility for the accident that caused your injuries. Florida’s comparative fault rule means that you are eligible to seek compensation even if you share the blame, but any award you receive will be reduced by the percentage of blame you bear. For example, if a court finds that you are 20 percent responsible for the accident, your award would be reduced by 20 percent.
You Get What You Pay For
While being cost-conscious is an admirable trait, it is important to remember that the fees that you’re going to pay when you obtain a settlement or award compensate your attorney for actual services they’ve provided you. While television and movie portrayals of attorneys tend to only show them litigating cases, there is a lot more work than courtroom presentations involved in the job. Some of the services your attorney will provide to you include:
- Giving you the information you need to make an informed decision about how to proceed with the insurance claim and/or legal process.
- Establishing the value of your personal injury case considering the severity of your injuries and related expenses.
- Collecting witness statements, photographs, medical records, an accounting of expenses, and other evidence to make your case.
- Attempting to negotiate a fair settlement with the insurance company so that you can be properly compensated for the injuries you sustained.
- Keeping track of and meeting the filing deadlines and other court requirements for the case.
- Communicating regularly with you to update you on the status of the case and any progress they have made.
- Interviewing witnesses and experts and evaluating evidence gathered by the defendant’s attorneys.
- Litigating the case in court.
- Helping to relieve you of the burden of debt collector calls while your case is in process.
- Handling the details of the compensation payout and representing you in the appeals process if you or the defendant wish to appeal the court’s decision.
Another point to consider is that studies have shown that personal injury claimants receive higher settlements or awards if they are represented by an attorney. There are a number of different theories about why this happens, including the threat of litigation, which makes insurance companies think twice about denying a settlement, as well as the fact that attorneys tend to be more highly skilled and experienced at negotiation than the general public.
Dolman Law Group
800 North Belcher Road
Clearwater, FL 33765