Navigating the legal landscape after a personal injury can be overwhelming. You are already facing mounting medical bills and lost wages on top of the stress of dealing with the insurance company. Getting legal representation does not need to add to your financial burden. A contingency fee agreement allows you to hire a personal injury lawyer without the burden of upfront legal costs. 

Here’s how a contingency fee agreement works and what to expect when hiring a personal injury lawyer on a contingency fee basis.

What Is a Contingency Fee Agreement?

Attorneys may use one of three typical fee structures: hourly, fixed fee, or contingency. Fixed fees are common for basic services like preparing a will. Personal injury lawyers usually provide services on a contingency fee basis. 

A contingency fee is an arrangement in which the lawyer receives a specific percentage of your financial recovery if your case is successful with no upfront legal fees. Their attorney’s fees are contingent on the success of your case. If you do not recover compensation, you do not pay legal fees. 

Types of personal injury cases that usually involve contingency fees include: 

The California State Bar requires contingency fee agreements to be in writing. Attorneys cannot charge “unconscionable” fees. The agreement must specify the percentage fee and how costs and other disbursements will affect the size of the attorney’s fee and the client’s share of the recovery. 

What Is the Average Contingency Fee?

A lawyer’s contingency fee can depend on a variety of factors. 

According to the American Bar Association’s Model Rules of Professional Conduct, the percentage may be based on: 

  • The type of personal injury case and complexity
  • The lawyer’s skills, experience, education, and certifications
  • The geographic area
  • Customary contingency fees for similar services
  • The number of parties involved
  • How much time is expected to be spent on the case

It’s common for an agreement to have a sliding scale for the percentage depending on when the case settles or goes to trial. The average contingency fee is 33.33%, but it may range from 25% to 40% if there is a sliding scale. The lowest fee may apply if your case reaches a pre-lawsuit settlement, with a higher fee if a lawsuit is filed. The highest contingency fee would apply if your case goes to trial. 

This sliding scale reflects the increased risk, effort, and time the lawyer must invest in your case at various stages. 

Are There Costs Not Included In The Contingency Fee?

The contingency fee covers the lawyer’s payment, but there may be many expenses that are not included. 

Additional costs may include the following: 

  • Court filing fees
  • Expert witness fees
  • Deposition and discovery costs
  • Medical records fees
  • Mailing, postage, and copy fees

How these costs are handled depends on the attorney or law firm. They may be covered by the attorney upfront and deducted from your recovery, or you may be billed for costs as they are incurred. Some law firms require you to maintain a minimum balance in a trust account with expenses billed against your balance. 

Make sure you understand how these costs will be paid and if you will still owe expenses if you lose your case. Your agreement must state whether you will be obligated to pay for costs related to your case that are not specified in the agreement. 

How Are Contingency Fees Paid at the End of a Case?

If your case is successful, the contingency fee will be deducted from your settlement or jury award. However, other expenses and liens should be deducted first. 

Your settlement check will be sent directly to your attorney, who will then deposit the amount into a special trust account. Medical liens, workers’ compensation liens, and other liens are paid out first. Next, court costs and other expenses may be deducted by the law firm as well. Finally, your attorney’s contingency fee should be deducted. 

The remaining amount is your recovery which will be paid out to you. 

A Personal Injury Lawyer Can Represent You on a Contingency Fee Basis 

Contingency fees are important because they ensure all injury victims have access to the courts and legal representation. A contingency fee arrangement also means your attorney has the same goal as you: maximizing the recovery. If you do not win compensation through a settlement or trial verdict, you are not required to pay your attorney’s fees. Many Encino personal injury attorneys accept personal injury cases on a contingency fee basis to ensure you receive the quality legal representation you deserve.

If you have been injured in an accident, contact our law office today for a free consultation at 833-852-3600 with an Tarzana personal injury lawyer from JUSTICENTER Personal Injury Lawyers to discuss how they can help you. We proudly serve in Encino, Tarzana, Sherman Oaks, FL and surrounding areas.