Matthew Minner | January 8, 2021 | Personal Injury
In personal injury cases, most lawyers charge a fee based on the results they produce. This fee will usually range between 25-40% of the settlement amount or damages award that the personal injury attorney secures in your case.
A contingency fee guarantees that you receive compensation for your injuries after a car accident, slip-and-fall, or nursing home abuse. It also motivates your lawyer to work for the largest amount of compensation possible. Larger compensation for you means larger fees for your lawyer.
Here is some information about how much personal injury attorneys cost and what they do to earn their fees.
The structure and amount of legal fees will vary depending on the type of work the lawyer performs. Most personal injury lawyers bill a contingent fee rather than an hourly fee or a flat fee. The drawback of flat fees or hourly fees for personal injury cases is that you could end up owing more in legal fees than you recover in compensation.
For example, if a lawyer works 100 hours on your case and bills $300 per hour, you will owe the lawyer $30,000 in legal fees whether you win or lose. If the lawyer only wins a $25,000 settlement, you will spend your entire settlement, plus $5,000 out of your pocket, to pay the lawyer.
Contingent Legal Fees
The key features of a contingency fee include:
- No out-of-pocket charges: A lawyer will usually start work on a contingency fee case without requiring you to come up with a deposit or fee advance.
- No fee if you lose: A contingency fee is “contingent” on the outcome of the case. If the case results in a loss, you do not have to pay the lawyer’s fees. In most personal injury cases, the lawyer will also shoulder all the hard costs incurred for your case if you lose. In other words, the lawyer must win some money for you to earn a fee and receive reimbursement for costs. If the lawyer does not win a settlement or damages award, the lawyer does not receive a fee or reimbursement.
- The fee is calculated after you win: The amount paid to the lawyer is based on a percentage of the money you recover for your injuries. This percentage is calculated to leave the bulk of the compensation for your medical bills, lost wages, and other damages. For example, if the contingency fee is 33%, your lawyer will take about one-third of the settlement or damages award while you will keep about two-thirds.
According to the Kentucky Rules of Professional Conduct, lawyers must provide a written agreement for a contingent fee to the client. That agreement must indicate whether the fee is calculated before or after expenses are deducted. In other words, you must know whether the fee is calculated using your gross award or your net recovery.
When you hire a personal injury attorney, you should review the fee agreement carefully. You should ask the lawyer about any terms that you do not understand.
Typical Contingent Legal Fee Percentages
The fees charged by personal injury law firms will vary widely, but Kentucky’s Supreme Court Rules require that lawyers charge a reasonable fee. Some factors in determining the reasonableness of a fee include:
- The amount of work required: Some cases, like product liability cases, require more time and labor than other cases, like a simple motorcycle accident.
- The difficulty of the case: Cases might be complicated by the difficult medical, scientific, or legal issues involved.
- The lawyer’s experience, reputation, and ability: A lawyer with greater experience or skill can charge more than newer lawyers.
- The customary fee: Legal fees in a local area should fall within a similar range.
- The lawyer’s caseload: If a lawyer has to turn down other cases to take on your case, the lawyer can charge a fair fee to cover the lawyer’s time.
You will likely find that different law firms charge different fees for the same work. Talk to the lawyer about the fee so you understand what is covered and what is not covered.
Services Usually Covered by Contingent Legal Fees
A law firm must provide many services to get compensation for your injuries. Most of these services are covered by your contingency fee. Some examples of the services personal injury lawyers provide include:
- Legal counseling: A personal injury lawyer will listen to your story and provide legal advice. Most contingency fees will cover your emails, telephone calls, and meetings with the lawyer.
- Collecting evidence: Your lawyer will build a file with medical records, bills, photos, witness statements, and other evidence that supports your injury claim.
- Negotiating with the insurance company: Your lawyer will submit a claim to the insurance company with evidence to support the claim. The insurance company will either deny the claim or make an offer. In either case, the lawyer will negotiate with the insurance company to try to get a fair offer.
- Litigating against the driver at fault: In Kentucky, you are limited to compensation from your auto insurer unless your injuries exceed statutory thresholds. When your injuries meet these thresholds, you can sue the at-fault driver for compensation.
Keep in mind that these services might vary. Discuss your expectations with your lawyer to make sure you receive the services you expect.
Charges Usually Not Covered by Contingent Legal Fees
Law firms incur out-of-pocket costs when handling your case. Most contingency fee agreements allow the law firm to charge you for costs on top of your contingency fee at the end of the case.
Some examples of costs include:
- Filing fees: Courts charge a filing fee when filing a lawsuit.
- Process servers: If you file a lawsuit, the lawyer will hire a process server to deliver the lawsuit to the defendant.
- Delivery expenses: Your lawyer might charge you to ship boxes of documents to the insurance company or the opposing lawyer.
- Stenographers: Stenographers (also called court reporters) record and transcribe depositions.
- Document costs: Litigation requires your lawyer to copy documents and prepare exhibits.
You should know which costs can be billed to you before you sign a contingent fee agreement.
Discussing Fees With Your Lawyer
Lawyers have an ethical responsibility to ensure you understand your fee agreement. You may feel awkward about discussing money with your lawyer, but knowing how much your lawyer will cost will help both you and your lawyer avoid misunderstandings.