Unlike other types of lawyers, a personal injury lawyer doesn’t have to cost a lot of money upfront. Usually, personal injury lawyers don’t charge unless you win the lawsuit or reach a settlement. However, as with everything in life, there are always exceptions to the rule.
In this guide to how much personal injury lawyers charge, we’re going to cover several topics. At the end of this guide, you should understand everything about personal injury lawyer fees and charges and be prepared for your first consultation with a lawyer.
How Much Do Personal Injury Lawyers Charge?
A personal injury lawyer is usually paid on a contingency fee basis and charges a portion of any money collected at trial or settlement. The percentage a lawyer might charge for personal injury can be as high as 45% or as low as 20% from any recovered amount. However, there are some exceptions to this rule, which we discuss in this article.
The other thing to remember is that a personal injury lawyer isn’t forced to charge using a contingency fee and might simply charge an hourly rate. The two ways this could happen are if you request to pay an hourly rate instead of a contingency fee. The other way is if the lawyer refuses to take your case on a contingency fee basis. They might refuse because in their eyes your case is weak and they don’t think you’ll recovery anything at trial or reach a settlement.
The Percentage a Lawyer Takes Must be Reasonable
The percentage a lawyer takes for personal injury is usually between 20% and 45%. However, some states require that the percentage for a personal injury lawyer working on a contingency basis must be reasonable. Let’s explore how to decide whether fees a lawyer takes for personal injury are reasonable.
The test whether a contingency percentage is reasonable is not “whether you think it’s fair in your own mind.” Instead, the test is what would be reasonable under the circumstances. Isn’t that a circular argument? Yes, it is. But there are some factors which help determine whether the percentage is reasonable. Some of these factors might include how long the lawyer has practiced personal injury law, the percentage other local personal injury lawyers charge for a similar case, the strength and nature of your case, etc.
In some situations, a contingency fee of 55% might be unreasonable. On the other hand, if the case is weak, then a percentage higher than 45% might not be unreasonable. Finally, in a large case with millions of dollars at stake and a world-renown lawyer by your side, a higher rate might be reasonable.
The best advice is don’t sign the contingency agreement unless you are comfortable with the fee percentage. Seriously. It’s much easier to stay out of an uncomfortable fee situation from the start then try argue its unreasonable after the fact.
Tip: Do not sign a contingency fee agreement with a personal injury lawyer unless you are comfortable with the fee percentage.
Personal Injury Lawyers Charge Costs in Addition to Fees
In addition to paying a personal injury lawyer’s fees, someone (usually you) also has to pay their costs. The common misconception is that you don’t owe anything unless you win, which is not always true. You might owe your lawyer thousands in costs if you lose at trial, even if your lawyer is working for a contingency fee. The problem is in the difference between fees and costs.
Fees cover the lawyer’s salary. In a contingency fee agreement, the lawyer’s salary is coming out of any recovery at trial or settlement. In an hourly rate scenario, you are paying the lawyer based on how many hours they are working on your case.
Costs are separate from fees and cover everything else other than fees. Here are some examples of costs you might incur:
- Document costs such as retrieval, copying, mailing, filing, etc
- Service costs for serving the lawsuit on the other party
- Court and jury costs
- Administrative costs
- Expert witness costs (which can be very high)
- Investigator costs
- Additional costs incurred by the lawyer working on your case
The best advice is to talk with your lawyer before you sign a contingency agreement. You should ask for an estimate of the costs for your case based on their experience. Each case has different costs, and the costs can vary widely based on the situation.
As an example, let’s say an insurance company is the one paying. If you choose to settle, that might reduce many costs usually incurred by going to trial. It might eliminate jury costs, court costs, and many other costs that a trial might create. Therefore, it’s in your best interest to talk to your lawyer about what the costs might be for your specific situation.
Tip: Ask for an estimate of costs before you sign the contingency agreement.
Another tip is to read over the contingency agreement before you sign. The contingency agreement will specify who pays the costs in the event of an unsuccessful outcome. The contingency agreement might state that the lawyer pays. But more often than not, it will say that you pay the costs if you lose at trial or don’t settle. Is this okay with you? The thing to remember is that before you sign, you are in charge.
If you don’t like what the agreement says, then talk with the lawyer before you sign. Maybe you can negotiate a cost split. If you and the lawyer can’t agree, then speak to a few other personal injury lawyers. Is every lawyer pushing the costs on you? Can you find a lawyer who will incur the costs if you lose your case?
Tip: Ask who incurs the costs if you don’t succeed at trial or reach a settlement.
Ask the Personal Injury Lawyer for a Payment Estimate
When you meet with a personal injury lawyer to discuss your case, you should ask for an estimate of the various fees and cost. Ask the lawyer for the following:
- Possible amount you could win at trial or settlement
- Percentage the lawyer charges in contingency fees
- Estimation of the expected costs for your case
- Whether the costs come out before or after the contingency fee
The lawyer should be able to answer these questions using their experience. They should give you a rough idea of how much you might get at trial after their fees and costs are deducted. The one thing to keep in mind is the last question which asks whether the costs are deducted before or after the contingeny fee. The difference can be significant.
Here is an example of how the order of the deducations can affect your final amount. Let’s say a court awards $100,000. The congingency fee was 25% and costs were $10,000.
If the costs are deducted before the contingency fee that gives us ($100,000 – $10,000) x 25% = $22,500 in contingency fees and $67,500 for you.
If the costs are deducted after the contingency fee that gives us ($100,000 x 25%) – $10,000 = $25,000 in contingency fees and $65,000 for you.
The difference between the two situations is $2,500. It might not seem like a lot in the grand scheme of things, but it’s still money that could have been yours if the agreement was arranged differently.
Tip: Ask how if the costs are deducted before or after the contingeny fee.
As you should know by now, trying to figure out how much personal injury lawyers charge is tricky. Just keep in mind what you learned in this guide. Also, make sure to read the agreement before you sign and talk with the lawyer before you sign anything. Communition goes a long way. Good luck!