What Is a Contingency Fee?
After being seriously injured in an accident, getting back to normal can be an arduous journey. You’re dealing with physical pain, mental and emotional trauma, medical bills, and maybe even job loss. The situation may be even more dire if you have a family.
Facing so many challenges at once might be overwhelming; you may not know where to turn or who to
ask for help. It’s important to know you’re not alone. If your injuries were the result of another party’s negligence or wrongdoing, you may be entitled to compensation. An experienced personal injury attorney can lay out your options and chart a path forward for you and your family.
For some people, merely the word attorney evokes images of enormous bills and surprise fees. After all, the average billing rate for an attorney is between
$100 to $300 per hour, but often much higher in a big city like Chicago. Considering this is a common perception, it may come as a surprise that most personal injury attorneys will take a case with no retainer, primarily through the use of a
contingency fee.
The Definition of Contingency Fee?
Although it sounds like impenetrable legalese, contingency fees are fairly straightforward. The client only pays their attorney if they’re awarded damages or reach a settlement agreement with the defendant. The lawyer’s fee is taken as a percentage of the damages or settlement agreement, and the client is left with no out of pocket attorney fees.
Pros of Contingency Fees
As already mentioned, the cost is one pro.
Hiring a lawyer on a contingency fee basis can drastically reduce the cost—especially the out of pocket cost—of legal representation.
Additionally, working on contingency provides certain incentives to the lawyer that may also benefit the client.
For one, because the lawyer is working at zero cost until a settlement is reached or damages are awarded by the court, he has an incentive to achieve a payday for his client as soon as possible, when it makes financial sense for the client.
Relatedly, because the size of the lawyer’s paycheck is determined by how much he earns for his client, he has an incentive to earn the largest possible compensation for the person he is representing.
Finally, contingency fees make the cost more predictable, because the lawyer’s fee is guaranteed to be a fixed percentage of the client’s award. In a traditional fee arrangement, if a lawsuit runs longer than expected, the client can expect a corresponding rise in the attorney’s bill. Additionally, with an hourly rate a lawyer has more opportunities to saddle the client with
surprise fees and costs. Thus, a contingency fee can potentially earn the client more money in a shorter amount of time than a traditional fee arrangement. Additionally, it makes the legal fees from a lawsuit more predictable for the client.
Cons of Contingency Fees
Most plaintiffs see no disadvantages to a contingency fee arrangement. If the client doesn’t prevail, the client owes nothing to the personal injury lawyer. The attorney, on the other hand, who has invested hours in a case that pays him or her nothing. Should the client obtain compensation from the lawyer’s efforts, those damages almost always exceed what the client could have obtained on his or her own.
What Are Damages?
Because contingency fees are inextricably linked with how plaintiffs recover compensation, at least a brief discussion of damages is necessary. Damages are meant to compensate the client for their losses, to put it simply. In the common parlance of the court, they attempt to make the victim whole.
Courts generally consider a few different factors to determine how much compensation a plaintiff deserves. They will look at pain and suffering, medical bills, loss of income, and even cost of care if the plaintiff sustains permanent disabilities.
Coping with the effects of a serious injury is never easy, especially if you’re dealing with financial difficulties, such as medical bills, at the same time. Knowing that your injuries were the result of wrongdoing only adds frustration. Thankfully, you don’t have to suffer in silence.
The law allows victims of negligence to obtain financial compensation through the court system. A successful personal injury lawsuit can achieve the support that both you and your family need and deserve.
The first step in vindicating your rights is consulting with an experienced
personal injury lawyer. A lawyer can
evaluate your case, determine your options, and give you a sense of direction in an otherwise turbulent moment.
Furthermore, most personal injury lawyers will handle cases at no upfront cost to the client by working on contingency. The lawyer is paid only if the lawsuit is successful. If the court awards the client a monetary reward, the lawyer will collect a certain percentage of that reward to cover the cost of his services. This should eliminate any amount of money the client is required to pay out of pocket for a fee.
Further, most personal injury lawyers will advance any costs to prosecute a case. For example, the cost of obtaining the police report, copies of medical records, or expert opinion fees. You would have to pay these costs on your own if you were representing yourself. The expenses a lawyer advances typically get reimbursed at the time of settlement or verdict.
Contact an attorney right away if you believe you’ve suffered injuries because of another party’s wrongdoing.
Personal injury lawsuits are often complex, and may require an extensive investigation. Additionally, many jurisdictions impose a statute of limitations on personal injury lawsuits, requiring that you file claims within a certain time after the accident. Call a personal injury lawyer now to make sure that deadline doesn’t pass before you file your claim.
