Many people hesitate to reach out to a lawyer after an accident because they think they can't afford to pay a lawyer's high hourly fee or come up with a retainer to secure the lawyer's services.
Here's what you need to know if you're deciding whether to hire a lawyer on a contingency fee basis:
A contingency fee is a type of fee arrangement that personal injury lawyers often use. If you work with a car accident lawyer on a contingency fee basis, you won't have to pay money to the lawyer to get your case started or pay the lawyer an hourly fee. Your lawyer will only collect a fee if you win:
So, a contingency fee is "contingent" (dependent) on a successful outcome in your case.
Most lawyers handle car accident lawsuits on a contingency fee basis. The arrangement works well for clients and lawyers because it offers clients low-risk access to the court system (no upfront costs and no fees for a loss) and attorneys get a piece of the pie instead of an hourly rate or fixed fee.
Some car accident attorneys are willing to provide a specific legal service for a fixed fee. For example, you might be able to pay a lawyer a fixed fee (say $300 to $1,000) to write a demand letter for you to send to the at-fault driver's insurance company.
A contingency fee agreement is only an option when an attorney is representing a plaintiff—the person filing the car accident lawsuit.
Attorneys typically charge the person or entity that is getting sued (the "defendant") an hourly fee, which varies among lawyers.
Most liability car insurance policies include a "duty to defend" term. If the policyholder is sued in connection with an event that triggers coverage, the insurance company has to pay for the policyholder's defense attorney.
But drivers who don't have insurance, or who exceed the limits of their coverage, have to hire an attorney on their own and pay a hefty hourly fee (typically around $150 to $500 per hour, depending on where they live and the attorney's experience and reputation).
Learn more about how much car accident lawyers cost.
With contingency fee agreements, the idea (as you've no doubt read or heard in lawyer ads) is that "You don't pay if you don't win." That's not always technically true, though. You need to read the fine print of your contingency fee agreement to see whether you will have to repay your lawyer for "costs" if you lose your case.
Costs in a car accident case are expenses paid by the lawyer's office in investigating and pursuing your claim, including:
Costs can add up quickly, easily reaching thousands or tens of thousands of dollars. Be sure to spell out in advance in a written contingency fee agreement how costs will be handled. Some personal injury lawyers will cover costs up front and only expect to be reimbursed if you win a settlement or court judgment. But most lawyers will want you to agree to pay some or all costs if you lose your case.
The timing of when costs are to be deducted from your final compensation matters. Your agreement should clearly say whether costs will be deducted before the lawyer's fee is calculated or after. If the lawyer's fee is taken first and then costs are deducted, the lawyer's fee is larger than if the costs are deducted before the lawyer's fee.
For example, let's say you agree to pay your lawyer a standard 33% contingency fee in a case with $3,000 in costs and a settlement of $20,000. If costs are deducted before fees are calculated, your lawyer gets $5,610 (33% of $17,000). If costs are deducted after fees are calculated, your lawyer gets $6,600 (33% of $20,000).
Now, back to the original question. A lawyer's fee is usually 33% to 40% of a car accident plaintiff's settlement or court award. The exact percentage depends on many factors, including the laws and attorney ethics rules in your state.
You can negotiate a reduced contingency fee percentage. Some attorneys are willing to set contingency fee percentages on a "sliding scale," depending on when the case is resolved. For example, an attorney may charge:
Of course, most lawyers won't suggest a reduced fee arrangement. You'll have to bring it up. Here are some options for how to negotiate reduced personal injury lawyer fees.
You might not need a lawyer to handle your car accident claim. Many people can handle their own claims, especially when their injuries are minor and they can easily prove the other driver was at fault for the accident.
But you might benefit from the skills of a car accident lawyer if your injuries are serious, your case involves complex legal issues, or the insurance company is giving you the runaround.
If you've been injured in a car accident, talk to a lawyer. A lawyer can answer your questions, negotiate a settlement, and file a car accident lawsuit.
Prepare for what to expect when meeting with a car accident attorney. You can also connect with a lawyer directly from this page for free.