You might be concerned about hiring a lawyer in your workers’ compensation case because you’ve heard how expensive lawyers can be. While this is true in many other areas of law, it’s actually much more affordable to hire a workers’ comp lawyer. Most states limit how much lawyers can charge in these types of cases, and you usually won't owe your lawyer any fees unless you win your case.
In workers’ compensation cases, hiring a lawyer typically doesn’t require you to pay anything out of pocket. Most lawyers charge a contingency fee—a percentage of the benefits that the lawyer helps you obtain. If you receive a settlement or an award by a workers’ comp judge, the lawyer will take a percentage of that payout as his or her fee. If the lawyer doesn’t help you recover benefits, the lawyer doesn't get paid.
In some states, lawyers are compensated by the hour in workers’ comp cases. However, they are typically still paid out of the proceeds of your settlement or award at the end of your case. This means that you won’t have to pay legal fees up front.
To protect injured workers, most states have laws that cap attorneys’ fees in workers’ compensation cases. The cap varies quite a bit from state to state, but is generally in the range of 10% to 25%. These limits are significantly lower than contingency fees in other types of cases, such as personal injury lawsuits, in which the standard fee is 33%.
Caps on attorneys’ fees can be structured in different ways. In some states, the maximum contingency fee depends on how the case is resolved (for example, before or after a workers’ compensation hearing), which types of benefits are recovered, or the size of the award. For example, a lawyer might be able to take 20% of the first $10,000 of a settlement or award, but only 10% of the remainder.
In states where workers’ comp lawyers are compensated by the hour, there is usually a cap on the hourly rate. This may be in addition to a maximum contingency fee. For example, a lawyer might be able to collect $150 per hour for every hour worked, but not more than 20% of the worker’s total settlement or award.
A minority of states don’t have caps on attorneys’ fees in workers’ comp cases. Workers’ comp lawyers are free to negotiate their own rates with clients, as long as the fee is reasonable. In these states, it’s not uncommon for lawyers to charge a 33% contingency fee.
In most states, attorneys’ fees in workers’ comp cases must be approved by the workers’ compensation agency. At the end of your case, your lawyer must submit his or her fee for approval by a worker’s comp judge. It is often illegal for a lawyer to take a fee without getting the agency’s approval first.
A workers’ comp judge will consider several factors in deciding whether the fee is appropriate, including:
If your lawyer’s fee is reasonable and within the state’s limits, the judge will approve it. If the fee seems unreasonable given the above factors, the judge will set an appropriate fee.
Legal costs are a separate item that will need to be paid in your case. These are the expenses that a lawyer incurs in furthering your case, such as the costs to file documents, copy medical records, and hire expert witnesses (a doctor, for example) to testify at your worker’s comp hearing.
You will be ultimately be responsible for paying these costs. However, if you don’t have the cash to pay for these costs up front, many lawyers will agree to advance the costs and deduct them from your settlement or award. Some, but not all, lawyers will also agree to waive legal costs if they aren’t able to help you recover benefits.
Every lawyer has his or her own policies when it comes to attorneys’ fees and costs. Be sure to read the lawyer’s fee agreement carefully and ask questions before signing.
Most lawyers will offer a free initial consultation to an injured worker. (In some states, such as California, lawyers are legally required to provide a no-charge initial consultation.) This meeting is an opportunity for the lawyer to evaluate your case and decide whether to take it on. It’s also an opportunity for you to understand your claim better and decide whether you want the lawyer to represent you.