Part IV: Working With Your Attorney

The Contingency Fee Agreement

Accident cases involving personal injury or wrongful death are usually taken on a “contingency fee” basis in the United States. This means that your lawyer gets paid only if she is successful in getting a settlement or jury award for you. Some lawyers use a hybrid form of fees in which they ask for a certain nonrefundable fee up front, such as $2,500, and then take their full percentage of the fee after the case has settled or a jury has awarded you a specific sum. Sometimes an attorney will ask the client to pay for costs and expenses as they are incurred, rather than waiting until the end of the case. This is especially true of newer lawyers or lawyers who do not have much confidence in your case and don’t want to put up a couple of thousand dollars getting expert witnesses to testify on your behalf.

In personal injury cases, the amount of the lawyer’s fees generally ranges from 25 to 50 percent of the gross settlement or jury award. Some lawyers have a standard 33 or 40 percent of the gross settlement or award regardless of when the case settles. Other lawyers have fees that increase as certain landmarks are passed. For instance, an attorney may charge 25 percent if the case settles before a complaint (the formal document filed in court to start a lawsuit) is filed, 33 to 40 percent after the complaint is filed but before a trial date is assigned, and 40 to 50 percent after the trial date is assigned. Some lawyers are now charging 50 percent of the gross settlement or award, regardless of when the case settles (e.g., before a complaint is filed).

Note that the lawyer’s fee normally comes out of the gross settlement or jury award, before any other costs are deducted. Costs and expenses that come out of your share after the lawyer has been paid can include:

  • An expert in traffic accident reconstruction
  • Medical doctors testifying to the extent and permanency of your injuries
  • Rehabilitation experts
  • Physical therapists
  • Court reporter’s costs
  • Court costs and expenses

You should try to negotiate with the lawyer for her contingent fee to be based on the net recovery, after costs and expenses have been deducted.