How Does a Mass Tort Lawyer Get Paid?

A mass tort is a situation in which many individuals affected by the same harmful act file lawsuits against the defendant who is legally responsible for that harm. Many events or circumstances can lead to mass tort litigation, including:

• toxic chemical exposure
• defective consumer products or medical devices
• dangerous prescription drugs, and
• a single event that affects a large group of people (i.e. a plane/train crash or hotel fire).

Mass tort lawsuits aren't by definition grouped together in a single legal proceeding, although many individual lawsuits are often consolidated in federal court in a process known as multi-district litigation (MDL), and in some instances a class action might be possible. Regardless of the form a mass tort case takes, lawyers who handle these kinds of lawsuits often get paid under either a "contingency fee" or "billable hour" arrangement, depending on which party they represent.

What Is a Contingency Fee?

In the realm of personal injury law, a contingency fee agreement is one in which a lawyer only receives compensation for legal services if his or her client receives compensation from the at-fault party (the defendant). The contingency fee arrangement makes it possible for plaintiffs to bring suit when they wouldn't otherwise be able to afford an attorney's services. In the vast majority of personal injury cases, including mass torts, the plaintiff's attorney will work under a contingency fee agreement.

Fees Versus Costs

It's important to differentiate a lawyer's fees for representing a client from the costs that are incurred in bringing and litigating the case, including:

• postage
• copying and other document prep costs
• database management
• court filing fees, and
• expert witness fees.

These expenses might not sound like much, but in a simple personal injury case, they can easily add up to a few thousand dollars. In a mass tort case, these costs will often venture into five figures. It's important to read the fine print of your contract with your attorney to understand the details on who bears ultimate financial responsibility for costs and expenses. Learn more about costs and expenses in a personal injury case.

What's a Common Contingency Fee Percentage?

Assuming the plaintiff's attorney is successful in obtaining some sort of recovery for the client— by settling the personal injury case or obtaining a verdict for the plaintiff at trial—the exact amount of money the lawyer gets under a contingency fee arrangement depends on two major factors.

First, there's the contingency fee percentage. In most personal injury cases, it's around 33%. This means if the plaintiff recovers $100,000, then the plaintiff's attorney gets $33,000. But depending on the complexity of the case, or the stage at which it's resolved, the contingency fee percentage can sometimes range from 20% to 40%.

Second, there's the question of whether the contingency fee percentage is applied before or after litigation costs and expenses get taken out of the monetary recovery. For instance, let's say the contingency fee is 30% and applies to the gross proceeds recovered. Let's also assume that the litigation fees and expenses add up to $10,000.

If the plaintiff recovers $100,000, they only take home $60,000 ($100,000 minus the $30,000 that represents 30% of $100,000, minus the $10,000 for litigation fees and costs).

But if the contingency fee applies to the net proceeds recovered, the plaintiff takes home $63,000 ($100,000 minus the $10,000 for litigation fees and costs, minus the $27,000 that represents 30% of 90,000).

What Is a "Billable Hour" Arrangement?

A "billable hour" arrangement normally applies when a lawyer represents a mass tort defendant (the individual or company getting sued).

In the world of legal services, a "billable hour" is a little bit more complex than an hourly wage. That's because there are usually several billable hourly rates that might apply to a single matter—especially at bigger firms—including:

• the billable rate of the legal assistant (such as a paralegal) which might be around $100 an hour
• the billable rate of the junior attorney, which might range from $150 to $350 an hour, and
• the billable rate of a senior attorney or partner, which can vary widely, from as low as $200 an hour to more than $1,000 an hour.

To keep things simple, some defense lawyers will charge a blended rate, which combines two or more billable rates. For example, the defense attorney might charge $80 an hour for paralegal work and $300 an hour for attorney work, regardless of whether it's a junior attorney working on the case at $200 an hour or a senior attorney who typically charges $400 an hour.

The more billable hours worked, the more the defendant pays its attorney, regardless of how the case turns out.

When mass tort lawsuits take years to complete and involve hundreds of millions of dollars, things can get more complicated. Sometimes, variations of the billable hour and contingency fee arrangements might apply, such as the mixed hourly-contingent arrangement.

If you or a loved one has suffered the kind of harm that might give rise to a mass tort claim, you might want to discuss your situation (and your options) with a personal injury lawyer.