You have all heard personal injury law firms use the famous quote (or a variation of the quote), “you pay us nothing until we recover for you.” This is a common fee agreement in personal injury cases. All too often people readily agree to these fee arrangements without fully understanding the consequences. Let me be clear on two things first: 1) we are injury attorneys and we do a contingency fee arrangements; 2) we want all of our clients to understand exactly what that arrangement means. Whether you were browsing the internet and stumbled upon this article or you were given a link to this article by one of our attorneys, you should read this to fully understand the contingency fee arrangement.
THERE ARE SEVERAL DIFFERENT TYPES OF CONTINGENCY AGREEMENTS. Some agreements are very simple, you pay nothing up front, when the case settles or a judgment is entered, your attorney takes a certain percentage of the compensation (almost always 1/3, but ranges from 10% to 50% depending on the facts of your case). Typically, when a case is harder to win, the attorney wants a higher percentage because he/she is taking on more risk. Another arrangement is to pay your attorney nothing up front, and then he/she gets a certain percentage of the compensation OVER a predetermined amount. For example, maybe an insurance company has already offered to settle the claim for $100,000. Then you contact an attorney. Make sure that your agreement with the attorney is that he only gets paid on a percentage of the amount OVER $100,000. Otherwise, it is not fair to you. Yet another arrangement is where you pay a portion of the litigation costs up front, and your attorney gets a portion of the compensation, but it is usually a smaller percentage (because the attorney is taking less risk).
Believe it or not, many personal injury lawyers in South Jordan and Salt Lake County are not doing as well as you might think. Litigation is very expensive, even if you are not counting attorney’s fees. In a typical car accident case you are going to have expert engineers prepare reports and reconstruct the accident at a cost of thousands and even tens of thousands of dollars. Then you have to pay to have a doctor diagnose all of your injuries and study the accident to determine if all of your pain and suffering. It is not uncommon for fees to hit $50,000 or more in a personal injury case. It is the lawyer who typically pays these costs up front. And if he/she loses the case, he/she is not only our all of the time put into the case, but the $50,000 spent on expert witnesses, reports, and more.
If you have a lot of money, and you want to hire a personal injury attorney. You might consider an hourly rate. You take on all of the risk, but you also stand to win big because you won’t end up giving your attorney 1/3 or more of the award.
THE BOTTOM LINE: Personal injury attorneys work on contingency fee arrangements because most people who have been injured do not have the money in the bank to pay for litigation costs and the injury lawyer is agreeing to take on all the risk of those expenses.