There is no book on what you are going to pay to your personal injury lawyer, but there are some tips to consider. We go through some of those below.
What Do I Need to Pay My Personal Injury Attorney - 5 Things to Consider Before Hiring Your Lawyer
The personal injury legal market is estimated to be worth approximately 35.2 billion in the United States, and the market continues to grow year over year. But does this mean you should hire a personal injury attorney after you've been in an accident? If you're thinking about hiring a personal injury lawyer you've also heard the terms “billable hour”, “contingency fee”, “disbursements” and “fixed fees”, but what does it all mean and how does it all work?
If you've been in an accident and are thinking about hiring a personal injury attorney, here are six things to consider when it comes to paying your lawyer.
Typically, personal injury lawyer fees will be paid as a contingency fee plus disbursements to resolve your accident claim. A contingency fee means a lawyer will be entitled to earn a percentage fee from the amounts your lawyer recovers for you. If you have a 25% contingency fee with your lawyer and you recover $100,000 from your accident, that means your lawyer will be paid $25,000 representing you in your accident.
Contingency fees are the most common payment method in personal injury lawsuits throughout the United States, and will often be used regardless of the type of accident, including work accidents, car accidents, medical accidents (malpractice), slip and falls or assaults.
What is the Typical Amount of a Contingency Fee?
A contingency fee in a personal injury lawsuit may vary from anywhere between 20% and 50%, and the amount of the contingency fee may depend on the type of lawyer you hire (i.e. experience of the lawyer you hire), the time it takes for your claim to settle or be resolved (i.e. the contingency fee may increase if your claim takes longer to resolve) and the type of accident (i.e. a contingency fee may be lower for a minor car accident than a complicated brain injury case resulting from medical malpractice). Furthermore, most States limit the amount a lawyer can charge a client as a contingency fee.
While the amount of the contingency fee is an important factor to consider when hiring a personal injury lawyer, it is also very important to consider the experience of your lawyer as an experienced lawyer may be better suited for maximize the value of your claim. For example, say you hire the best personal injury lawyer in San Antonio at a 30% contingency and the lawyer recovers $100,000 for you in your claim. You would pay the lawyer $30,000 and take-home $70,000. Say you were to hire a less experienced lawyer at a 20% contingency fee, however, that lawyer recovers you $50,000 for your claim. In the second example, while you would pay the lawyer $10,000, you would also recover $40,000 (or $30,000 less than the first example). Thus, its very important for you to consider both the experience of the lawyer and the amount of the contingency fee before deciding what lawyer to hire.
With that said, if a lawyer charges you a higher contingency fee it does not mean that lawyer is the best attorney to hire for your personal injury claim, and you should determine your lawyer's experience before you decide to hire that lawyer.
What are Legal Disbursements?
A disbursement is a third party cost incurred by a lawyer to resolve your claim. A lawyer will typically incur disbursements to advance your claim, and its important to understand what disbursements may be incurred and whether disbursements are included within the "contingency fee" or whether they are a charge in excess of the contingency fee. On some occasions, a contingency fee is just payment for the lawyer's time, and you will be responsible to reimburse your lawyer the contingency fee plus disbursements. Depending on the nature and severity of your accident, the amount of the expenses incurred by your lawyer can very significantly and your lawyer may be required to incur some very significant disbursements to resolve your claim. Thus, before you hire your lawyer, it's important to understand the potential disbursements the attorney will need to incur to resolve your lawsuit and the estimated value of those disbursements.
Below are some examples of the types of expenses your lawyer may incur to resolve your claim:
- Medical Reports - Your lawyer may hire a medical expert (i.e. a doctor) to independently confirm the nature and scope of your injures and use this report to prove your case and the amounts you are entitled to;
- Investigators - After some accidents, it's not entirely clear who is at fault. As a result, a lawyer may hire a private investigator to investigate the accident to help prove which party is at fault;
- Court Fees - To file your claim, there will likely be charges to file documents in the courthouse in your City. In addition, if your lawyer is required to bring an application before a judge and loses that application, you may need to pay some costs to the court in such event.
- Photocopying Charges - Kidding, but not kidding…..You should be aware if your lawyer intends to charge you for office related expenses, including photocopying.
There are a couple other payment alternatives with respect to how a lawyer can be paid to settle your personal injury lawsuit, however, they are not that typical. You can find further details of those in our Blog on What Questions To Ask Before Hiring A Personal Injury Lawyer.
Unlike other legal services, and assuming you are being billed on a contingency fee basis, you typically will not be required to pay your personal injury attorney unless you are successful recovering some money for your claim. There can be exceptions to this principle. Given that a personal injury lawyer will typically only be paid if your claim is settled, that personal injury lawyer will often only agree to take on your claim if there is a strong prospect of you recovering some money.
We noted there may be some exceptions to the rule above. When a lawyer agrees to take on your case, that lawyer will require you to sign an agreement which is called a “retainer agreement”. On some occasions, a lawyer will still charge you disbursements if the lawyer is unsuccessful with you claim so its important to ask this question before signing a retainer agreement with your lawyer so you understand what you may have to pay the lawyer and when, even if you lose your case.
Yes, when a lawyer is working under a contingency fee arrangement the higher the settlement the more the lawyer will be paid for your personal injury lawsuit. Accident lawyers are typically incentivize to maximize the amount they recover for your claim, as they can be paid more. With that said, there are some important factors to keep in mind before hiring a lawyer on a contingency fee basis:
- Hiring a personal injury lawyer legitimizes your personal injury claim. As an example, say you were injured by a doctor and you called the hospital on your own to say you were injured and that you have a claim. In this instance, it is unlikely that the hospital will be very helpful to you and the hospital will likely not help guide you on how to resolve your claim. Even worse, the hospital may offer you an extremely low amount in an attempt to make your claim "go away" while mitigating the exposure to the hospital. Hiring a lawyer will help prevent this. After you hire a lawyer, not only will the hospital now know the lawyer intends to maximize the value of your claim, the hospital will also know that it will need to hire a lawyer to defend itself, at a potentially significant cost to the hospital. This incentivize the hospital to settle your claim as quickly as possible.
- Experience matters. If an insurance company, hospital, employer or other person responsible for a personal injury claim recognizes the fact that you have an experienced lawyer representing you, again, they should be incentivized to settle your claim as quickly as possible because they know the lawyer understands the actual value of your claim and will likely be successful resolving it.
- Avoid the lawyer quick to settle. Even though lawyers have a legal duty to act in your best interest, some lawyers simply intend to "churn" out your claim as quickly as possible to earn their fee as quickly as possible. It may not be worth the lawyer's time to push for an extra few thousand dollars for you when that only means the lawyer recovers a few extra hundred dollars. As a result, it's important to have a clear understanding before you hire your lawyer what your claim may be worth and what type of settlement to expect.
- Don't let your lawyer drag out your claim. If your claim is taking a long time to resolve (and your lawyer has already spent a significant amount of time working on your claim), that lawyer may be incentivized to stop working as the lawyer isn't making any more money and the lawyer may spend his or her time on more lucrative opportunities. You may need to pressure your lawyer to resolve your accident claim if you find yourself in this circumstance.
- Make sure the lawyer you hire is actually your lawyer. While this activity may be prohibited in some States, some lawyers may "sell" your claim to other lawyers. For example, you may hire a lawyer on a 30% contingency basis while that lawyer will turn around and hire another lawyer to resolve your claim for a 20% contingency fee (meaning the first lawyer would make 10% without doing any work!). You typically want to avoid this scenario if you've been injured in an accident, as the car accident lawyer you hire should be the one resolving your claim and you will want to ensure you maximize the settlement you recover from your claim, rather than giving more to lawyers.
Yes, however, this can be very complicated in a personal injury contingency claim - and in most cases it is very difficult or impractical to fire your personal injury lawyer. If you haven't paid your lawyer anything, and you decide to fire that lawyer, then the following could happen:
Your lawyer may demand payment of his or her hourly rate for services performed up to the date you fire your lawyer. Some lawyers may have this right in their contingency fee agreement. This could be extremely expensive for you, and could force you to keep using the lawyer you want to fire.
Your lawyer may require a percentage of the contingency fee from the new lawyer you retain. This means your new lawyer will be required to split the contingency fee between the new lawyer and the lawyer you fired. Negotiating the amount to be paid between lawyers can be complicated, and could result in you paying the lawyers more than you originally were required to pay. Furthermore, it may be hard for you to find a personal injury lawyer willing to take on your case after you fire a personal injury lawyer.
So, if you hire a personal injury lawyer on a contingency basis, you should be aware that it will be likely be extremely difficult and potentially prejudicial to your case if you want to fire your personal injury lawyer.
5. Can I get quotations from multiple lawyers for my personal injury claim before deciding what lawyer to hire?
Yes, and this is exactly what you should do before hiring a personal injury lawyer. Getting quotations from multiple lawyers allows you to determine what different lawyers may believe your claim is worth, what the lawyer may charge you to resolve your claim and how long it may take to resolve your claim. You can then compare lawyers and quotes to determine the best lawyer to hire. But how do you do this if you don't know:
- what questions to ask a lawyer;
- what lawyers you should contact; or
- how to assess the lawyer's qualities or qualifications.
Even worse, do you have the time to interview multiple lawyers? While getting multiple quotations is exactly what you should do before hiring a personal injury lawyer, it is a time consuming and potentially complicated process.
That's where Adidem can come in to help you.
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