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Why are personal injury attorneys paid on contingency?

Those who hire an attorney will often find that the cost is based on the time spent working on the legal matter. Usually, a retainer is paid up front to start the work, and they will then charge an hourly rate against the retainer with additional billing for work above the retainer amount. They then break the billing down into increments of their rate.

Personal injury billing is different

Personal injury attorneys are paid by contingency fee. This means that they are paid a percentage of the settlement or award they help secure for the client. The scale is sliding, based on the settlement size and the law firm’s rate, but one-third of the amount is standard middle ground.

Both the judge and the defendant’s legal team understand the lawyer will receive a portion and factor this into their award or offer. The attorney gets nothing if the injured plaintiff does not win their case in court or secure a settlement.

Why does it work this way?

There are good reasons why the plaintiff’s attorneys work on contingency:

  1. Many cannot afford the legal fees: This pay scheme ensures credible legal representation even if they usually could not afford a retainer.
  2. Levels the playing field: Insurance companies have legal staff on retainer and large budgets for legal fees, ensuring legal representation is available to everyone regardless of how big your bank account is or how much you earn.
  3. Avoids predatory billing: Contingency avoids a lawyer taking on a case they know they will lose because they want to bill the hours. It also can avoid stretching out the case with more billable hours even when the plaintiff has a fair offer on the table.

There are still expenses

The attorney works on contingency, but others do not. There are related costs to filing a claim, including court fees, charges for getting copies of medical records, and expenses for verifying the defendant received a copy of the complaint. The plaintiff may also need to hire expert witnesses like doctors or motor vehicle crash reconstruction experts. Regardless of the case’s outcome, these people are paid for their time, travel expenses and possibly lodging, as well as related expenses.

Attorneys will explain the costs

Lawyers will go over how contingency works and what their percentage is for the case. Often law firms will also cover out-of-pocket expenses to the client until you recover a settlement or award.

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