Understanding Contingency Fees When Working With Personal Injury

Getting injured in an accident can be an overwhelming experience – physically, emotionally, and financially. Anticipating a heavy monetary burden when it comes to medical care and missed paychecks due to immobility, victims are often hesitant to hire a lawyer because of the imagined costs involved. 

Our personal injury lawyers at Trust Guss understand this conundrum all too well, which is why we don’t require any upfront fees. Working on a contingency basis allows us to alleviate our clients’ stress and misgivings about getting legal representation after a devastating accident. Instead of charging fees, we get paid through a percentage of your award after we win your case. This makes hiring a personal injury attorney a win-win situation for both parties. 

Types of Legal Fees

There are multiple ways that a client can pay, outlined below:

• Hourly fees – This is a traditional payment structure for lawyers. The attorney sets an hourly rate, which is paid regardless of how the case turns out. This payment method often presents challenges for the client, as they face uncertainty when it comes to their results. Personal injury lawyers rarely work on an hourly basis for this reason.
• Flat fees – Flat fee billing is usually more favorable for the client than hourly billing because it places a cap on expenditures. For lawyers, flat fee billing only works if the attorney knows ahead of time how much work a legal strategy will require. Flat fee billing is often used at law firms that handle a high volume of similar case types, such as divorce filings, will preparations, or other “cookie-cutter” type legal proceedings. Personal injury lawyers rarely use this type of billing because their cases are more unique and complex.
• Contingency fees – Contingency fees are what personal injury lawyers use the most. In this scenario, the lawyer does not receive any payment until the case is won. Once successful, the client’s costs are paid out of the total compensation recovered. While it is common for personal injury lawyers to take about 30%, contingency fees can vary based on the agreement established. 

Establishing a Contingency Fee Agreement in a Personal Injury Case

At the start of the relationship between the client and their personal injury lawyer, the two parties will create an official agreement that lays out the details of their work together and how payment will work. The agreement may be called a “fee agreement," a “retention agreement," or a “legal services agreement.” There are two critical components of the agreement:

• The lawyer’s percentage – The client and the lawyer will negotiate a percentage of the compensation that will be used as the attorney’s fee in a personal injury case. In general, the more money the lawyer can recover for the client, the higher their percentage will be. This incentivizes the lawyer to be aggressive when fighting for their client’s rights. The lawyer’s percentage can also be calculated on a scale. For instance, it might be one percentage up to a certain compensation dollar amount and then a different percentage past that dollar amount. The percentage might also vary according to how quickly the case is settled. In other words, contingency fee agreements are flexible and can be tailored to the client’s unique situation and needs. The attorney will need to use creativity and sensitivity to make sure the agreement works for their client and also for their law firm.
• Case expenses – Like other business owners, personal injury lawyers have costs and expenses related to their work that need to be addressed. Some costs are ongoing business expenditures like rent, utilities, and staff wages, while others are related to the specifics of the case at hand, and may encompass travel expenses, court filing fees, and the cost of hiring accident reconstruction experts or other authorities to bolster the client’s claim. While a personal injury lawyer will typically cover their normal business expenditures themselves, the case-related fees and costs will need to be factored into the retention agreement at the start. In some instances, the client will pay case expenses out of their pocket. This may be feasible, provided that the client has a good understanding and expectation of what the total number will be. Other times, the law firm will agree to pay the case expenses up front, with the costs being reimbursed at a later date once the claim is settled. In cases that require hiring expensive expert witnesses, such as medical specialists, the case expenses are usually factored into the contingency percentage. 

Why Do Personal Injury Lawyers Choose to Work With Contingency Fees?

Some clients might wonder why a personal injury lawyer would choose the contingency fee payment structure when they could easily just charge hourly and walk away with a fat paycheck regardless of how the case turns out. Below, we will explore a few reasons why personal injury lawyers might prefer the structure of the contingency fee agreement.

1. It helps clients obtain outstanding legal representation that they ordinarily might not be able to afford 

Our personal injury lawyers at Trust Guss have chosen their careers because they truly wish to be of service to clients facing legal challenges. They are motivated by a desire to help others and see that justice is served in any given situation. Personal injuries can occur anywhere and at any time, and they don’t discriminate based on financial bracket. Anyone can suffer injuries after a serious car crash, building collapse, or slip-and-fall at the store. These experiences can leave ordinary people in a state of financial, physical, and emotional hardship that no one deserves. Our personal injury attorneys at Trust Guss believe that if your injuries are due to another person’s negligence or recklessness, you shouldn’t be the one to shoulder the financial fallout from the accident. By working on a contingency fee basis, our legal team makes it possible for victims to claim the damages they rightfully deserve without having to worry about paying for legal representation out of their pocket when they’re already dealing with medical expenses and lost wages. 

2. It incentivizes the lawyer to obtain the highest compensation possible in the case

When taking on a case on a contingency fee basis, our lawyers are faced with risks and uncertainty. However, this motivates them to rise to the challenge, as they wish to have something concrete to show for their efforts. By working on a contingency fee basis, personal injury lawyers actually have the opportunity to earn far more than would be possible through an hourly or flat rate. They are incentivized to obtain the highest possible compensation amount for their clients and themselves, bringing about a win-win outcome that all parties can celebrate.

How to Choose the Best Personal Injury Lawyer and Fee Agreement 

In today’s litigation-minded landscape, there are numerous personal injury law firms to choose from. How can you make the best selection? Here are a few important tips:

• Look for positive referrals – Look for testimonials, reviews, and professional ratings for each law firm. This will give you a clear picture of what other clients have experienced in the past. 
• Attend a consultation – There is no substitute for speaking with your personal injury lawyer face-to-face, whether in person or via videoconferencing. This will give you a better idea if working with them is a good fit.
• Go over your agreement – It is essential that you fully understand any agreement that you are entering into with your personal injury attorney. You should know how case costs will be calculated and how much the contingency fee percentage will be.
• Negotiate fees – Don’t be afraid to negotiate the contingency percentage or case cost fees. Most attorneys are willing to work with their clients to arrive at a plan that feels good for everyone.

Get Started Today With a No-Cost Case Evaluation

If you are looking for outstanding legal representation in a “Clients First” environment, contact our team at Trust Guss today. We have over 30 years of expertise in personal injury law and will tirelessly advocate for your rights, helping you to obtain the maximum in damages. Our lawyers will delve into the evidence, establish liability, communicate with insurance companies and other third parties on your behalf, and work to achieve a fair and favorable settlement. If that’s not possible, we will not hesitate to take your case to court. Call us today to schedule a free case evaluation. We work on a contingency fee basis, so you never have to spend a dime unless we are successful with your claim.