Explaining Contingency Fees: What You Need to Know Before Hiring A Personal Injury Lawyer

Don’t let the fear of legal fees stop you from hiring a personal lawyer. Read about contingency fees and how they work.

If you have been in an accident that was caused due someone else’s negligence, you may be entitled to compensation for your medical bills, lost wages, pain and suffering, and other damages.

However, getting a lawyer to handle your personal injury claim can be a complex and costly process, especially if you have to go to court.

This might be because of the cost of hiring a personal injury lawyer.

But how can you afford to pay for one if you are already struggling financially due to your injury? The answer is contingency fees.

In this article, we will look into explaining contingency fees: What you need to know before hiring a personal injury lawyer

What you need to know before hiring a personal injury lawyer

Contingency fees are payment arrangements that some lawyers offer to their clients, especially in personal injury cases.

Unlike other types of fees, contingency fees are based on the outcome of the case.

This means that the lawyer only gets paid if they win the case or get a settlement for their client.

However, If they lose the case or fail to secure any compensation, the lawyer does not get paid at all.

The contingency fee is usually a percentage of the total amount of money that the client receives from the case, either through a verdict or a settlement.

The percentage can vary depending on the lawyer, the type of case, the complexity of the case, and the jurisdiction. However, the typical range is between 25% to 40% of the recovery.

If you hire a personal injury lawyer on a contingency basis and they agree to take 33% of the recovery as their fee, and they manage to get a $100,000 settlement for you, they will receive $33,000 as their fee, and you will receive $67,000 as your net recovery.

What are the Benefits Of Contingency Fees?

Having explaining contingency fees: What you need to know before hiring a personal injury lawyer

Contingency fees have several advantages for both the client and the lawyer. Some of the benefits are:

No upfront costs: Hiring a lawyer on a contingency basis means that you do not have to pay any money upfront or out of your pocket to retain their services. This can be a huge relief if you are facing financial difficulties and cannot afford to pay for a lawyer upfront.
No risk Involved: Since the lawyer only gets paid if they win the case or get a settlement, you do not have to worry about paying for a lawyer who does not deliver results.

If the lawyer loses the case or fails to get any compensation, you do not owe them anything. This also motivates the lawyer to work hard and diligently on your case, as their income depends on the outcome.

Access to justice: Contingency fees make it possible for people who otherwise could not afford to hire a lawyer to access the legal system and seek justice for their injuries.

Peace of mind: Hiring a lawyer on a contingency basis can give you peace of mind and reduce your stress, as you can focus on your recovery and leave the legal aspects of your case to the professional.

You can also trust that your lawyer has your best interests at heart and will fight for the maximum compensation that you deserve.

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What are the drawbacks of contingency fees?

Contingency fees are not without their drawbacks, however. Some of the disadvantages are:

Higher fees: Depending on the percentage of the contingency fee and the amount of the recovery, you may end up paying more to your lawyer than you would have if you had hired them on an hourly or flat fee basis.

If you hire a lawyer on a contingency basis and they agree to take 40% of the recovery as their fee, and they were able to get a $100,000 verdict for you, they will receive $40,000 as their fee, which may be more than what they would have charged you if they had billed you by the hour or by the case.

Less control: When you hire a lawyer on a contingency basis, you give up some control over your case, as the lawyer has the final say on whether to accept a settlement offer or proceed to trial.

You may not agree with the lawyer’s decision or strategy, but you have to abide by it, as they are the ones who are investing their time and money in your case.

Potential conflicts: Contingency fees can also create potential conflicts of interest between the client and the lawyer, especially if the case does not go as expected or if there are multiple parties involved.

What You Should Know Before Hiring a Personal Injury Lawyer base on contingency

Now that we have explaining contingency fees: What you need to know before hiring a personal injury lawyer

If you are considering hiring a personal injury lawyer based on contingency, there are some things that you need to know and understand as well as some questions you should ask before signing a contract.

Here are some questions that you should ask your potential lawyer and some tips that you should follow:

Ask What is the percentage of the contingency fee:

As mentioned earlier, the percentage of the contingency fee can vary depending on the lawyer, the type of case, the complexity of the case, and the jurisdiction.

You should ask your lawyer what percentage they charge and whether it is negotiable.

You should also compare the percentage with other lawyers who offer similar services and see if it is reasonable

Ask What expenses are included in the contingency fee:

In addition to the percentage of the recovery, some lawyers may also charge you for the expenses that they incur while working on your case, such as court fees, filing fees, expert fees, travel expenses, copying costs, etc.

These expenses can reduce your net recovery. Hence, you should ask your lawyer what expenses are included in the contingency fee and what expenses are separate and payable by you.

You should also ask for an estimate of the total expenses that you can expect to pay and whether you have to pay them upfront or at the end of the case.

How will the contingency fee be calculated and distributed?: You should also ask your potential lawyer how they will calculate the contingency fee and the recovery.

Don’t forget to ask them to explain how they will deduct the expenses, taxes, and other claims from the recovery, and how they will split the remaining amount between you and them.

They should provide you with a written statement that shows the breakdown of the recovery and the fee, and give you a copy of the settlement check or the verdict slip.

Ask What are the terms and conditions of the contract?: Before hiring a personal injury lawyer on a contingency basis, you should read and understand the terms and conditions of the contract that they will ask you to sign.

You should pay attention to the details, such as the scope of the representation, the duration of the contract, the termination clause, the dispute resolution technique, and the confidentiality agreement.

Also, ask your lawyer to explain any terms or clauses that you do not understand or that you are not comfortable with.

You should not sign the contract until you are fully satisfied and confident with your choice of lawyer.

Final Note

Hiring a personal injury lawyer based on contingency can be a convenient option for people who have been injured in an accident and who need legal representation but are not financially buoyant.

Contingency fees can help you access the legal system and seek justice for your injuries, without having to worry about the upfront costs and risks of hiring a lawyer.

However, contingency fees also have some drawbacks and challenges that you need to be aware of and prepared for which we have discussed in this blog post on explaining contingency fees: What you need to know before hiring a personal injury lawyer

Therefore, before hiring a personal injury lawyer on a contingency basis, you should do your research, ask the right questions, and understand the pros and cons of this type of payment arrangement.

We hope that this article has helped solve the riddle around explaining contingency fees: What you need to know before hiring a personal injury lawyer

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