If you have been in a car accident, and someone else is responsible, you will be looking for a car accident attorney. We all know hiring a lawyers is costly, but how much will you have to pay?
Most car accident lawyer charge clients in a fairly unique way — contrary to the hourly fee that many firms charge in other types of cases. A typical auto accident lawyer will charge a contingency fee to take an injury case. A contingency fee means that the firm will not get paid any lawyer’s fees unless you recover money in the case.
The lawyer or a law firm will get a percentage of the money received from an insurance settlement or the jury verdict.
In this article, we will take a closer delve into how the contingency fees work and what you can expect if you have decided to hire a lawyer to handle your accident case.
Contingency Percentage
The percentage that a lawyer can receive in a contingency fee agreement differs from one state to another. The percentage typically ranges from 25 to 40%, and 33.33% (or one-third) is pretty standard. If you have a 33.33 percent contingency fee arrangement and you recover $90,000 in your accident case, your lawyer will receive $30,000.
The contingency fee may depend on whether the offender (defendant) in your case has responded or answered your legal complaint in the court or not. If the case settles before there is an answer to your complaint in the court, the allowed percentage is usually lower.
Conversely, if the settlement occurs after the defendant serves a formal answer to your complaint or if the case proceeds to trial and a jury verdict is reached, the allowed percentage increases.
For example, suppose that you sent a demand letter to the offender in your case and you quickly reached a settlement agreement for $80,000-90,000. In this situation, the lawyer would again receive $30,000 (33%). But, suppose that the case instead ended in a jury verdict of $80,000-90,000 and your state allows a lawyer to receive 40% of the recovery after the complaint is answered. In this situation, the lawyer can recover $36,000.
It is always important to discuss with your lawyer about the contingency fee and to wisely review the contract for legal services. If you don’t understand the fee arrangement that is stated in the contract, ask your lawyer to explain it to you.
Fees and Expenses
Depending on the lawyer and your contract for the legal services, you may or may not be responsible for the upfront court fees and other lawsuit expenses.
These fees and expenses include the cost of serving subpoenas, court filing fees, court reporter fees, and costs of obtaining medical records and police reports, and the expert witness fees.
Many personal injury firms require their client to pay the aforementioned fees as they become due. If your contract states that you are liable for these costs, you can expect a personal injury firm to call you and seek these payments as the fees become due. If you cannot pay these all of these expenses, your case will likely not proceed until the payment is made.
Other personal injury firms typically the large ones, will cover all the fees and expenses. Yet the fees and expenses will be deducted from your settlement or final judgment. Let’s say that you settled your car accident case for $100,000. This time, your contract stated that the costs and expenses would be abstracted from the settlement. Your lawyer incurred $10,000 in costs and expenses. In this situation, your lawyer would receive $10,000 as a refund for the costs and expenses, and $30,000 for the legal services. You would end up receiving $60,000 as a final recovery amount ($100,000 – $10,000 – $30,000 = $60,000). We charge a contingency fee based on the gross recovery, i.e., without first subtracting costs.
Other Fee Arrangements
Not all of the cases involve a pure contingency fee arrangement. Lawyers may first collect an initial retainer to begin your case and also a contingency fee at the end of your case. Conversely, if you recover your money in the case, the amount that is already paid to the lawyer should be subtracted from the percentage that is due to the lawyer at the end of the case. For example, if you have paid $2,000 to the lawyer as a retainer and recovered $90,000 in a settlement, the lawyer will receive $28,000 from the settlement ($30,000-$2,000 = $28,000).
Most of the car accident cases will not involve a flat fee payment for the legal services. Flat fee arrangements are usually reserved for less-complex cases. A law firm may charge a flat fee where the legal representation is limited only to the drafting and responding of a demand letter. Then the fee may range from $300 to $1,000.
Is a Car Accident Advocate Worth The Cost?
If you were injured and needed any significant medical treatment than the settlement value of your case rises quickly. This means that the insurance adjuster will work to minimize all your damages and try to get you to accept a very low settlement offer as they are in the business of making money, not spending it. This fact is evidenced by a study conducted by an Insurance Research Council who concluded that, on average, plaintiffs represented by a lawyer received 3 ½ times the settlement money as those without.
In this case, you will benefit from having a lawyer to negotiate all your damages effectively. Additionally, the threat of a lawsuit and trial puts pressure on the insurance company and they are forced to offer a fair settlement.
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