What Is a Contingency Fee?
If you’ve suffered an injury in an accident that wasn’t your fault, you may be wondering how to get the compensation you deserve from the person who caused your injuries. Maybe you’re facing costly medical bills and missed time from work and income. You know you need help, but how can you afford a personal injury lawyer with your financial losses?
The good news is that most personal injury attorneys work on a “contingency fee” basis. Let’s explain what that means and how it can help you get justice after an accident, even if you have scarce financial resources at the moment.
What Exactly Is a Contingency Fee?
A contingency fee means your lawyer only receives fees if they win money for you in your case. If they don’t succeed in getting you a settlement or court award, you owe the attorney nothing. There are no upfront costs or hourly charges to worry about. This makes it possible for anyone to hire a skilled personal injury lawyer and pursue a case, regardless of their financial situation.
Here’s how it typically works:
- You meet with the personal injury attorney for a free consultation to discuss what happened and see if you have a case. There is no charge for this meeting.
- If the lawyer takes your case, you’ll sign an agreement detailing the contingency fee percentage the attorney will receive from any settlement or verdict amount. This percentage can vary but must be reasonable, given the circumstances.
- The attorney will work on your case by investigating the accident, gathering evidence, dealing with the insurance companies, filing necessary paperwork, negotiating with the other side, and taking the case to trial if needed.
- If and when your case resolves successfully, the agreed-upon contingency percentage gets deducted from the settlement or award money received. The rest goes to you.
- If your case is not successful, you owe nothing to the attorney for their time and effort. You may still be responsible for minor costs like filing fees, but the lawyer assumes the primary financial risk.
As you can see, the contingency fee arrangement benefits you by providing access to legal representation with no upfront costs. It also motivates your personal injury attorney to work hard on your case since they only get paid if you do.
A Contingency Fee Aligns Your Interests With Your Attorney’s
When you work with a personal injury attorney on a contingency fee, it gives you confidence that they will strive for the best possible results for you. This is because your lawyer only receives fees if they win your case. Further, the more compensation they win, the more fees they receive.
When you meet with an injury lawyer for your initial consultation, they will assess whether you have a valid claim. You can trust them to be honest, as a personal injury attorney does not want to spend time on a case they do not believe they can win. This will waste their time and resources for nothing in the end.
When your attorney’s fees are also at stake in your case, your interests are aligned. You can trust they will aggressively fight for full compensation that covers your losses. This is yet another way that contingency fees benefit injury victims throughout the legal process, so never wait to begin by scheduling your free case evaluation today.
Are Contingency Fees Allowed in All States?
Yes, all 50 states allow lawyers to work on a contingency fee basis. However, some states cap the percentage an attorney can charge. Contingency fees are also prohibited in some practice areas, like criminal defense and divorce. However, they are very common in personal injury cases. If you have any questions about fee arrangements, ask your personal injury lawyer during your initial consultation.
Will I Still Owe Other Costs Besides Attorney Fees?
Even with a contingency fee, some additional costs may be involved in pursuing your case. These can include things like:
- Filing fees and court costs
- Fees for obtaining medical records and police reports
- Expert witness fees, if needed, to prove your case
What Factors Should I Consider When Hiring a Personal Injury Lawyer?
While a contingency fee makes hiring an attorney low-risk, you still want to ensure you work with the right lawyer for your case.
Here are some important things to look for:
Relevant Experience
Not all lawyers handle personal injury cases day in and day out. Look for an attorney who focuses their practice on cases like yours, whether it’s car accidents, slip and falls, dog bites, or another type of personal injury matter.
Proven Results
Most personal injury attorneys’ websites share information about past case results. While every case is unique, this can give you an idea of the firm’s track record of success.
Good Communication
You want a personal injury lawyer who will keep you informed about your case and promptly return your calls and emails. The attorney should clearly explain the legal process and what to expect. You should feel comfortable asking questions.
Positive Testimonials
Reading reviews from past clients can provide insight into what it’s like to work with a particular lawyer or firm. You can usually find testimonials on the firm’s website or 3rd party review sites.
Personal Rapport
Your personal injury case can take months or even years to resolve. You must feel good about the lawyer you’ll work with. Do you feel heard and respected? Do your goals seem to be a priority?
Remember, the initial consultation is your chance to interview potential attorneys and see if they are a good fit before signing a fee agreement. Come prepared with a list of questions you want to ask.
What if I’m Not Happy With My Lawyer?
Hopefully, if you’ve chosen a lawyer carefully, you’ll be satisfied with the representation you receive. However, if serious issues arise, you may have the option of changing lawyers, even in a contingency fee arrangement.
The rules for switching attorneys during a case vary by state. In many jurisdictions, clients can change lawyers anytime and for any reason. However, you may still owe a portion of the contingency fee to your original attorney to compensate them for the work they already performed.
If you are considering changing lawyers, first try to resolve any problems directly with your current attorney. Have a frank discussion about your concerns. Clarify expectations on both sides. You may need to terminate the relationship if you still feel your lawyer is not meeting their professional obligations. Consult your fee agreement and your state’s ethics rules for specific guidance.
How Are Contingency Fees Split Between My Current and Former Lawyer?
If your case ends up settling or reaching a positive verdict after you switch personal injury lawyers, the contingency fee may need to be split between the two attorneys. There are a few different ways this can be handled:
- The lawyers agree on how to divide the fee based on the work performed by each.
- The attorneys go to court and ask a judge to decide how to allocate the fee fairly.
- If you negotiated different contingency fee percentages with each lawyer, the final settlement or award gets divided proportionately.
Again, the specific process can vary by jurisdiction. The important thing is to understand your obligations and work with your new attorney to ensure any fee disputes are resolved properly.
How Long Does Getting a Settlement Check After Agreeing to a Contingency Fee Arrangement Take?
Even after you agree to a settlement with the other party, receiving your portion of the funds can still take some time. Here’s a general timeline of what to expect:
- Signing the settlement agreement: Once you and the other side have agreed on a number, you’ll need to formally accept the settlement offer in writing. Your attorney will review the agreement with you before you sign.
- Processing the release: In exchange for the settlement funds, the insurance company will require you to sign a release form stating that you will not pursue any further legal action related to the accident.
- Issuing the check: Once the insurance company has the signed settlement agreement and release, they will issue a check to your lawyer. This typically takes 2-4 weeks.
- Depositing the funds: Your lawyer will deposit the settlement check in a special escrow account. It can take a few days for the check to clear.
- Paying liens: If any of your medical bills were paid by health insurance or you owe money to medical providers, those bills will need to be paid out of the settlement funds.
- Deducting attorney fees and costs: Your lawyer will then take out the agreed-upon contingency fee percentage and any case costs, as outlined in your contract.
- Issuing your check: The remaining funds are your compensation for your injuries. Your lawyer will issue you a check for this amount.
From start to finish, expect it to take about 4-8 weeks to have the settlement check in your hands. Your attorney will keep you posted on the progress and contact you if any additional information is needed to expedite the process.
What Should I Do With My Settlement Money?
Receiving a personal injury settlement can feel like a huge relief, especially if you’ve been out of work and accumulating medical debt. However, it’s important to be smart about using the funds. Here are some suggestions:
Pay Off Accident-Related Bills
If you still owe money to hospitals, doctors, physical therapists, or other providers for treatment related to your accident injuries, those balances should be a priority. Remember, the bills are ultimately your responsibility, even if you were expecting the other driver’s insurance to cover them.
Set Aside Funds for Future Treatment
Some accident injuries require ongoing care, like follow-up doctor appointments, medications, or physical therapy. Consider setting aside a portion of your settlement to cover these anticipated future medical expenses.
Replenish Your Emergency Fund
Did you have to dip into your savings to cover bills after the accident? Now is the time to build your emergency fund back up so you’re prepared for future unexpected events.
Pay Down High-Interest Debt
If you have credit card balances or personal loans with high interest rates, using some of your settlement to pay down these debts can provide peace of mind and save you money on long-term interest.
Invest in Your Future
If your immediate needs are met, you may consider investing some settlement funds for long-term financial security. A financial advisor can discuss options that align with your goals.
What Happens if My Case Goes to Trial Instead of Settling?
The majority of injury cases settle out of court via negotiations. But if the insurance company denies your claim or you can’t agree on fair compensation, your case may need to go to trial. This can extend your timeline for receiving funds.
Even if you file a lawsuit, your lawyer will continue trying to negotiate a settlement before the trial date. If the case goes to court, you will have to wait for the scheduled trial and then for the judge or jury to reach a verdict. If you win at trial, your lawyer will deduct the contingency fees from the court-awarded damages.
Your lawyer should prepare you for the possibility of trial from the beginning and discuss the strength of your case. While going to court can be stressful and time-consuming, sometimes it’s necessary to get the compensation you deserve as an accident victim. Your attorney should be by your side every step of the way.
Contact a Personal Injury Lawyer Today
Contingency fees allow personal injury accident victims to get much-needed legal representation without worrying about upfront costs. The arrangement gives you access to an experienced attorney with no financial risk.
If you’ve suffered an injury by someone else’s negligence, don’t hesitate to schedule a consultation with a reputable personal injury lawyer. An attorney will fight to get you the maximum compensation possible so you can focus on your physical and emotional recovery. Concerns over legal fees should never stand in your way.