It’s easy to underestimate the cost of a serious injury until you experience one firsthand. Hospital bills, lost wages, and other damages can add up to a veritable fortune, and when faced with such financial adversity, it’s only natural to be cautious about your spending. Fortunately, most personal injury lawyers work on a contingency fee basis, so you won’t have to pay anything upfront, and if you don’t win, you won’t have to pay any attorney’s fees.
That said, not all law firms have the same fee structure. In this blog, we’ll discuss the most common fee structures used by personal injury lawyers.
Contingency Fee Agreements
This is the most common fee structure used by personal injury attorneys. Lawyers who work on a contingency fee basis typically offer free initial consultations, during which they evaluate the facts of the case, determine whether the claim has merit, and answer the client’s questions.
When a contingency fee agreement is put into place, the attorney’s payment for legal representation is contingent on the outcome of your case. Typically, if you don’t make a financial recovery through a settlement or trial verdict, you won’t have to pay any legal fees. But if your case is successful, the attorney’s fee will be deducted from your financial recovery.
A variety of factors may influence the contingency fee that applies to your case and the amount of compensation the attorney is able to charge, including:
- The attorney’s level of experience;
- The complexity of your case;
- Whether you were partially liable for the accident and your financial recovery is reduced as a result; and
- The location where the tort took place or will be litigated.
Your lawyer may require you to pay the agreed upon percentage from the gross amount awarded to you. This means the attorney’s fee would be calculated based on the total financial award rather than your net recovery after paying medical expenses or deducting costs incurred by your lawyer. California personal injury attorneys are also permitted to cover the legal expenses required to litigate a case and deduct that amount from the financial recovery.
Several factors can go into a lawyer’s decision of whether or not to accept your case on a contingency fee basis including:
- The strength of the available evidence of liability and damages;
- The potential value of your claim; and
- The amount of insurance coverage that applies to your case.
In the state of California, fee agreements must be in writing:
- Whenever a contingency fee agreement is used; or
- Any time it is reasonably foreseeable that the costs will exceed $1,000.
A flat fee is an agreed upon amount of money paid to the attorney for representation. Flat fees are typically used only in uncomplicated matters when the lawyer can accurately predict the amount of time and resources that will be needed to resolve the case.
It’s rare for personal injury lawyers to charge flat fees because these proceedings are relatively unpredictable compared to other types of cases. There are many factors that could prolong the proceedings that are largely out of the attorney’s control. For instance, the insurance company might dispute liability or damages despite being presented with strong evidence, or simply refuse to pay a fair settlement.
As a result, it’s not easy to determine the amount of time or resources that will be needed to resolve a personal injury claim. In fact, you should be suspicious of an accident lawyer who charges a flat fee because if a complication does arise, he or she might not be willing to devote the extra time and effort that will be needed to achieve the best possible outcome.
Hourly Billing Agreements
Paying an hourly billing rate is the most common method of hiring an attorney in California, though these agreements are not typically used by personal injury lawyers. Hourly fees vary widely between attorneys, law firms, locations, and the nature of the claims being handled.
Hourly fees are usually charged incrementally by dividing up an hour into segments of minutes and only billing for the nearest increment of time worked. For example, a lawyer may divide billable hours into increments of 6 minutes and charge for every 0.1 hour of work (or fraction of it). For hourly agreements, lawyers often require a retainer fee.
Retainer fees are payments that must be made before the attorney will start providing representation. These payments are set aside in a special trust created by the attorney to avoid commingling any of your funds with their own, and the monies in that trust are withdrawn by the attorney as needed to cover accumulating costs and legal fees related to your case. Depending on the resources and time needed to represent you, the retainer agreement may set out conditions regarding when you would be required to add additional money to replenish the trust.
To ensure responsible conduct, you should review the attorney’s billing statements related to your case and the use of your retainer fee. Usually, any unspent retainer fees (unless they’re determined to have been earned) are refundable if you decide to discontinue being represented by the attorney.
Before hiring a personal injury attorney, you should clarify if any additional expenses, such as document delivery charges, filing fees, or support staff costs, are included in the proposed fee agreement. Some lawyers charge flat fees for these costs, but others only charge for these expenses if their client’s case results in a financial recovery.
One of the hallmarks of a good personal injury lawyer is their willingness to be transparent about the fee structure. Your attorney should be clear from day one about how fees will be charged and whether costs exist that are not contingent on the outcome of your claim.
Contact a Long Beach Personal Injury Attorney to Discuss Your Case
Your Injuries Are Personal to Me
If you were harmed or lost a member of your family due to someone else’s negligence or intentional wrongdoing, you may be entitled to compensation for all resulting damages. To determine the most strategic way to proceed with your claim, contact the Law Office of Michael D. Waks for a free consultation.
Michael Waks accepts personal injury and wrongful death cases on a contingency fee basis, so you won’t owe any attorney’s fees unless you win. Michael has over 30 years of experience in legal practice, and he knows what it takes to help his clients pursue the highest possible compensation. He performs thorough investigations, consults with medical and financial experts when necessary, and uses proven strategies during settlement negotiations and litigation.
Throughout the proceedings, you will have a direct line of contact with Michael, and he will provide regular updates on the progress of your case. He intentionally limits his caseload so he can provide attentive counsel through every step of the claims process.
To schedule a free, no-obligation case review, call our office today at (562) 206-1939. We’re available 24 hours a day, 7 days a week. You can also send us a message via our Contact Page. If you are unable to come to us, a member of our team will come to you.
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