Problems Paying a Personal Injury Lawyer's Contingency Fee

Your lawyer's fee will come out of your injury settlement or jury verdict. Here's how these contingency agreements work, and what might go wrong.

The first thing most people consider before hiring a personal injury lawyer is how much it will cost them.  While each lawyer may have a slightly different fee arrangement, the general rule is that personal injury lawyers charge clients a fee only if they recover money for their client.  This is called a contingency fee.  The payment of the legal fee is contingent upon the lawyer successfully recovering money for their client. 

Typical Percentage a Lawyer Would Collect

The fee is a percentage of the total money recovery, either from a settlement or a jury verdict following a successful trial.  The typical industry standard is somewhere between 30% and 45%.  That is, the lawyer will charge anywhere from 30% to 45% of the total recovery. The percentage fee for any given case is always negotiable, and will depend on the details of the case and the likely cost of pursuing it.

(See Lawyers Fees in a Personal Injury Case for more on fee amounts and related issues.)

Case Expenses

Most injury attorneys will pay the cost and expenses of the case up front.  In many serious injury cases, a lawyer will pay significant sums of his or her own money to obtain critical evidence, such as medical records, exhibits showing injuries, depositions of witnesses and expert witnesses, accident reconstructionists, scientific testing, background investigation, copy charges, and many other expenses. In some cases -- and when state law allows -- the attorney will pay for medical expenses, and even extend loans to clients that are injured too badly to return to work. 

Case expenses must be paid back out of the recovery, if there is one.  Most lawyers have a clause in their contract that waives expenses in the event that the lawyer loses the case.  This way, the client does not wind up owing legal fees for an unsuccessful case. 

If a Client Chooses to Fire His or Her Attorney Mid-Case

Switching Lawyers

In rare instances, the client decides to terminate the services of a lawyer and hire a different lawyer.  In most of those situations, the first lawyer will have a lien for his fees and expenses on the case. 

Dropping Representation Altogether

Similarly, situations may arise where a lawyer has been working on a case for months or years, invested money into the case, and their client decides to fire them and try settling the case on their own in order to avoid paying legal fees.  Despite being terminated from the case, the lawyer would have a right to their fees and reimbursement of expenses, and would be able to sue both the former client as well as the defendant that failed to protect and honor the attorney’s lien.  The attorney can recover not only his fees and expenses, but can also recover additional attorney's fees and possibly punitive damages as well.   For this reason, it is extremely uncommon for any halfway sophisticated defendant to settle a case in such a way to cut out any lawyer that has represented the Plaintiff for any amount of time. 

If you find yourself in a situation where you feel you have to terminate your lawyer, it is best to get them to agree to seek no fee interest or expense interest in the case.  It is critical to get this agreement from the lawyer in writing.  This document should then be forwarded to the defendant before settlement in order to avoid any unnecessary delays in the future. 

If a Lawyer Terminates the Agreement

When the lawyer terminates the agreement, the lawyer is typically not entitled to fees or expenses.  If your lawyer decides not to continue handling your case, it is critical that you have them state in writing that they "seek no attorney's fees and expenses and expressly waive any attorney's fee or expense lien."  Again, it is helpful for future purposes to go ahead and forward a copy of this to the defendant to avoid them trying to delay a future settlement based upon a concern over attorney's fees.

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