A contingency fee arrangement reduces your upfront expenses when working with personal injury lawyers, helping you focus on recovery. This is a payment arrangement where the lawyer’s fee is a percentage of your settlement amount. These are contingency fees contingent on the lawyer winning your case.
Contingency fees are different from retainer fees, in which the client pays the lawyer money upfront to retain their services. The contingency fee structure is more common in personal injury cases, while retainer fees are used in other types of law, such as contract law.
Though you only pay a contingency fee if the case settles or you receive a court award, additional expenses may be involved when working with a personal injury law firm. Before obtaining legal representation, you should discuss these points with your attorney and sign a written fee agreement.
Benefits of Contingency Fee Agreements for Clients
Contingency fee arrangements benefit personal injury clients, meaning victims have fewer upfront costs. Because attorneys are paid a percentage of the total settlement, they are more motivated to work hard on a given case. They are also less willing to work on cases that don’t have a reasonable chance of success, preventing frivolous lawsuits from going to trial.
Lawyers working on a contingency fee basis are motivated to align their interests with their clients. They do not want to provide legal services for free, so they will work closely with the client and ensure they create the best possible case.
A contingent fee shifts the financial risk to law firms rather than personal injury victims. This helps injured people who may otherwise have no legal recourse. When the attorney’s fee comes from the settlement, those without significant financial resources still have an opportunity to get justice for an accident.
The Distinction Between Fees and Expenses
The contingency fee is to pay the law firm for working on your case, but there are additional legal costs that you may have to pay. These will vary depending on your case length and whether you go to court. You and your attorney should discuss all additional costs during your free consultation to familiarize you with what you must pay throughout the legal process.
Attorney’s Fees
Attorney fees are to compensate the law firm for their services in handling your case. A personal injury case requires significant resources and numerous individuals working together.
These services include reviewing medical records, gathering evidence, finding and interviewing expert witnesses, estimating damages using medical bills and pay stubs, and representing you in negotiations.
Case Expenses
Beyond the contingency fee, additional legal fees are associated with a personal injury case. In most cases, you must pay expert witness fees, deposition costs, and medical record retrieval fees.
When we submit a lawsuit to the court, there will also be court filing fees. If your case goes to a jury trial, there will be additional court costs, including jury fees.
Does a Contingency Fee Agreement Typically Include Expenses?
Contingency fee agreements do not include case expenses. These other costs are billed separately, as they are paid to parties different from your lawyer. For example, some fees may go to the court system, and others may go to third parties like medical experts, private investigation agencies, hospitals, or experts in other fields.
All legal cases are slightly different and will involve other costs, especially if a case has to go to trial. The law firm should know what resources they are likely to use ahead of time and communicate this to you. They should also explain what other costs may come up throughout the case and who will be responsible for paying them upfront.
Variations in Fee Agreements
Each law firm will have a different expense and contingency fee arrangement. You may pay an hourly fee, a flat fee, or a predetermined percentage of your settlement for contingency fees.
The typical contingency fee ranges from 25% to 40%, and it may vary depending on how complicated the case is. A case that goes to trial will likely have a higher contingency fee because the firm must devote more resources to the case than if they are only negotiating with insurance companies.
With some firms, you will have to pay some expenses upfront, while in others, the attorney will deduct the expenses from your settlement and then calculate the contingency fee percentage. Whatever the firm’s arrangement, you and the attorney should discuss the overall cost of the case before you sign an agreement.
How Expenses Are Handled
Expenses are different from attorney fees, and they may be handled in several different ways. The attorney should explain their firm’s way of handling expenses upfront so you’re not surprised by a bill.
Upfront Payment vs. Reimbursement
There are two ways that expenses can be handled in a case. With upfront payment, you are responsible for paying some or all of the expenses upfront as the case progresses, such as deposition fees or medical records retrieval. If you choose this, the attorney should explain how much it might cost you and when you must pay them.
With reimbursement, the attorney agrees to advance the money for expenses and then deduct them from your settlement. This reduces your out-of-pocket costs, but it also reduces your settlement amount.
You may agree with your lawyer to pay some of the costs upfront, and the rest will be deducted from your settlement. Whatever you choose, get everything in writing and ask clarifying questions before signing anything.
Itemizing Expenses
Your attorney should itemize all the costs of your case, including the contingency fee and court costs. Once the case is over, the lawyer will review all your invoices and explain what sum you will get after deducting everything. This provides transparency and ensures you can calculate how much you may receive.
The Importance of Clear Communication
Attorneys are meant to provide legal services for your benefit, including being honest about how much you can expect from your case. You and the law firm should always be on the same page about how much their legal fees will cost and your financial obligations throughout the process.
Discussing Fees and Expenses with Your Lawyer
Before you sign a contingency fee agreement, you and the attorney should discuss all potential expenses and how they will be paid. For example, if the lawyer knows that a certain expert witness charges an hourly fee, they should explain how long they expect to need that expert’s services and how the expert will be paid.
Once you and the attorney are satisfied with your agreement, everyone should sign the contract and keep a copy for their records.
If anything changes throughout your case, the attorney should contact you directly and ensure you agree to the additional charges. Never hesitate to contact your lawyer or ask for further clarification about a given expense.
Understanding Your Financial Obligations
The lawyer is responsible for explaining their contingency fee and expenses to you, and you are responsible for fulfilling your financial obligations throughout the case. During your free consultation, ask the attorney what you are expected to pay upfront, how they calculate the contingency fee, and what costs they feel your case might involve.
Expert Legal Representation on a Contingency Fee Basis!
Rosenfeld Injury Lawyers is a nationally recognized law firm advocating for personal injury victims. We strive for honesty and transparency with every client, and we will take the time to ensure you understand every financial aspect of your case before we sign any agreements.
Contact us today for a free case evaluation by calling (888) 424-5757 or using our online form. During our initial meeting, we’ll discuss your legal options and explain our contingency fee arrangement so you feel confident moving forward with our firm.