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Do Personal Injury Lawyers Work on Contingency?

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If you need to file a personal injury case, but don’t have the funds to pay for a lawyer upfront, you might be wondering, “Do personal injury lawyers work on contingency?”

Serious business persons looking at documents.

Personal injury lawyers usually work on a contingency basis. With this type of arrangement, you don’t pay a retainer fee upfront. Instead, you pay the lawyer a percentage of the settlement awarded to you if your case is successful. If your lawyer doesn’t recover compensation on your behalf, you won’t pay any lawyer fees.

What Are Contingency Fees?

Contingency fees are like “pay if you win” agreements for lawyers. Instead of charging an hourly rate, the lawyer takes a percentage of the compensation you receive from your case. This makes legal representation accessible if you can’t afford upfront fees, but means the lawyer shares the risk.

Most personal injury attorneys accept cases on a contingency basis. This includes car accident attorneys, medical malpractice lawyers, workers’ compensation attorneys, and attorneys who handle wrongful death claims.

Attorneys agree to contingency fees for several reasons. First, operating on a contingency basis means that a broader range of people can afford the attorney’s services. Charging a retainer fee upfront would exclude a lot of people from hiring the lawyer, including people who have high chances of winning large settlement amounts.

While attorneys don’t get paid upfront with a contingency fee arrangement, they’re incentivized by the possibility of a larger payout. They assess cases for strong liability and potential for compensation to justify the risk of not getting paid. They also benefit from:

  • Reduced overhead: There is no time spent billing clients for hours, freeing up time for casework.
  • Attracting clients: Contingency fees attract prospective clients who might not otherwise hire legal representation.
  • Percentage-based fees: If the case wins, the percentage-based fee can be higher than hourly rates.

How Do Contingency Fees Work in Personal Injury Cases?

Personal injury lawyers typically start you off with a free consultation. This consultation gives the lawyer a chance to familiarize himself or herself with your case.

During the consultation, you can explain what happened and tell the lawyer about the injuries you suffered. The lawyer will advise you on which types of compensation you can file for. For example, in a car accident case, you may be able to file for compensation not only for the costs of your medical bills, but also for lost wages, including the loss of future income. You may also be able to file for pain and suffering and even punitive damages.

The cost of a contingency fee can vary depending on several factors, including how difficult and complex the case is. If a case is more difficult to win, the lawyer may charge a higher amount. If the case goes to trial instead of being settled out of court, the contingency fee may also increase, as such cases require more resources and effort on the part of the lawyer.

In general, a third of the total settlement is typical for personal injury cases in Illinois. Illinois law limits contingency fees for certain scenarios.

As per Illinois law, medical malpractice contingency fees can not exceed one third (33 and 1/3%) of all recovered sums. For workers’ compensation cases, the limit is 20%, although exceptions apply.

There is a broad range for contingency fees. Since it depends on the type of case, the complexity of the case, and other factors, speak to your lawyer to get a quote.

There may be additional costs involved in your case. For example, some lawyers may bill you for filing fees, which are charged by the court for filing and initializing your lawsuit. Of course, if the case doesn’t go to court, filing fees won’t apply.

Another type of fee is expert witness fees. Your lawyer may bring on an expert witness to confirm the injuries you suffered or evaluate the total loss of future income you will suffer due to having this injury. These experts may charge a fee for their time and expertise. Mileage and travel fees may also apply.

If a lawyer is working with you on a contingency basis, he or she won’t charge you any of these upfront. Instead, the contingency fee agreement will determine how these expenses are charged. While the law firm will usually pay for these costs out of pocket while the case is proceeding – you won’t need to worry about them – they may be deducted from the settlement amount once the case is won. Again, this varies depending on your contingency agreement, and every lawyer is different.

In some cases, these case fees may be deducted from the settlement amount before your percentage share is calculated. For example, let’s say the settlement amount was $120,000, the lawyer takes 30%, and the filing and other case fees are $20,000. If the case fees are deducted first, the $20,000 will be deducted, leaving $100,000, of which the lawyer will take $30,000. That leaves you with $70,000.

In other scenarios, your share may be calculated immediately, and the case fees will then be deducted from your share. If the total settlement amount was $120,000, your share would be $84,000, which is 70% of $120,000. The settlement fees of $20,000 (using the above scenario) would then be deducted from the $84,000 that makes up your share, leaving you with $64,000.

Note that this is based on a sample scenario. The amount you can get from a car accident or personal injury lawsuit varies. It depends on factors such as the extent of your injury, who was liable, the percentage of fault you hold for the accident (if any), and the insurance policies held by both parties.

When Do Personal Injury Lawyers Get Paid?

The steps in a personal injury lawsuit start with an initial consultation with the attorney. The attorney will usually try to negotiate a settlement with the defendant or his or her insurance company. To that end, the attorney will collect and document evidence proving liability and the extent of the damages incurred as a result from the injury.

A settlement can help accelerate the process and ensure you get your compensation quicker. However, in some cases, the case may have to go to trial. These steps occur before the lawyer gets paid.

Getting paid is one of the last steps. An attorney working on a contingency basis will not require any upfront fees, as mentioned. Instead, he or she will take the contingency fee out of the settlement amount that the defendant agreed to pay or was ordered to pay during the trial.

In other words, the attorney will get paid as one of the last steps of the lawsuit, right before your share of the settlement gets released.

What Are the Advantages of Working With Personal Injury Lawyers on Contingency?

Most personal injury lawyers work on a contingency basis. You should avoid personal injury lawyers who require you to pay a fee upfront.

There are many benefits for clients using a contingency fee arrangement. If an attorney is working on a contingency basis, it means that he or she will have an interest in maximizing the settlement amount.

After all, if the settlement amount doubles, so does the lawyer’s payout from the settlement amount. An attorney working on a contingency fee will do his or her utmost to ensure that you are properly represented and that all resources necessary are invested into making sure there is a positive outcome. The more you win, the more the attorney wins.

That will give you peace of mind, as you know the lawyer is on your side.

Helps to Minimize Your Financial Risk

An attorney will only take your case if he or she thinks you have a winnable claim. However, there are no guarantees in life, nor in court. While it might be rare to end up with no compensation if an attorney determined you had a solid chance of winning, it could happen in a small number of cases.

By only working with an attorney on a contingency basis, you can help minimize your financial risk. Since you don’t have to pay anything unless you get awarded a settlement, it’s a win-win for you. In the worst-case scenario, you would end up the same way you started, with no losses. There’s no risk to you.

If you were paying your lawyer upfront, whether he or she charges a retainer or an hourly rate, there is a risk of coming out at a loss if you lose your case. To avoid such a scenario, work with an attorney who charges on a contingency basis.

Access to High-Quality Legal Representation Regardless of Financial Resources

Access to high-quality legal representation should not be dependent on your financial resources. Many people who suffer personal injuries or are involved in car accidents have bills that keep piling up, daily expenses that must be paid, and other unexpected costs. Until the settlement money comes in, finances can be tight.

Everyone should have access to high-quality legal representation, and the contingency fee system helps ensure that.

With that said, there are some tips for hiring a lawyer after a car accident. Of course, you should first look for a lawyer who works on a contingency basis. Ask for a free consultation, during which you can get an overview of the case and learn more about the fees.

During the initial consultation, your attorney will explain how the contingency fee agreement works and the percentage he or she will take. Make sure the lawyer is clear and transparent about all potential fees, including case fees that may be deducted from the settlement.

The initial consultation is also an opportunity for you to ask the attorney questions about the case and his or her approach. Ask the attorney what your chances of success are and the estimated compensation you may recover.

During the initial consultation, ask the attorney about his or her track record dealing with cases similar to yours. For example, if you got into a motorcycle accident, ask the attorney if he or she has won motorcycle accident cases before.

You should also check reviews about the attorney. Reviews are usually available on Google, Yelp, and other third-party review sites.

Your initial consultation is also an opportunity to get acquainted with the attorney. The attorney should make you feel comfortable. He or she should also make you feel like the case will be a top priority for him and her. For clarifications, don’t hesitate to ask questions during the initial consultation. 

About the Author

Kurt D. Lloyd is a plaintiff’s trial lawyer who focuses on medical malpractice and other catastrophic injury cases. He lives in Chicago and represents injured clients throughout Illinois. He is also the founder of Lloyd Miller Law, Ltd.

Years of Experience: Over 35 years
Illinois Registration Status: Active
Bar Admissions: Illinois State Bar

Kurt D. Lloyd is a plaintiff’s trial lawyer who focuses on medical malpractice and other catastrophic injury cases. He lives in Chicago and represents injured clients throughout Illinois. He is also the founder of Lloyd Miller Law, Ltd.

Years of Experience: Approx. 20 years
Minnesota Registration Status: Active
Bar & Court Admissions: Illinois State Bar Association U.S. District Court, Northern District of Illinois

Kurt D. Lloyd is a plaintiff’s trial lawyer who focuses on medical malpractice and other catastrophic injury cases. He lives in Chicago and represents injured clients throughout Illinois. He is also the founder of Lloyd Miller Law, Ltd.

Years of Experience: Over 35 years
Illinois Registration Status: Active
Bar Admissions: Illinois State Bar

Kurt D. Lloyd is a plaintiff’s trial lawyer who focuses on medical malpractice and other catastrophic injury cases. He lives in Chicago and represents injured clients throughout Illinois. He is also the founder of Lloyd Miller Law, Ltd.

Years of Experience: Over 35 years
Illinois Registration Status: Active
Bar Admissions: Illinois State Bar