You got hurt in an accident. You know you need a lawyer to help you obtain compensation from the party at fault and his insurance company. But, you can barely keep up with the bills you already have. You can’t imagine adding the cost of a lawyer to your budget. Here’s some good news: you don’t have to worry. Personal injury lawyers do things differently than other lawyers. Hiring a lawyer to handle your personal injury accident case will not cost you a dime unless and until you receive compensation for your injuries and losses. Let’s explore why.
The Three Standard Lawyer Fee Structures
All attorneys get paid for their work. However, what many people may not realize is that different lawyers charge for their services in different ways. The three most common attorney fee structures are hourly fees, flat fees, and contingent fees.Hourly Fees
Hourly fees constitute the most well-known and commonly-used attorney fee structure. In this payment arrangement, a lawyer charges clients for every minute the lawyer spends working on a client’s case, win-or-lose. Personal injury lawyers rarely charge hourly fees. The amount of the hourly fee typically varies depending on the lawyer’s skill level, education, years of experience, and geographic location, among other factors. The bulk of lawyers who charge by the hour have hourly rates in the $150 to $450 per hour range, although lower and higher fees are both common. Lawyers who bill their clients by the hour send out biweekly or monthly bills that detail the time the lawyer has spent on a case down to the tenth of an hour. Like any business, lawyers expect timely payment of bills if clients want them to continue working. Hourly fee arrangements have obvious financial benefits for lawyers if they have a client who can pay their bills. However, tension and billing disputes can arise when clients question whether their lawyer has given them good value for their money. Lawyers who often charge by the hour include defense lawyers in personal injury cases, business and tax lawyers, and some criminal defense lawyers.Flat Fees
Some lawyers charge their clients a flat fee for a particular legal service. Personal injury lawyers only rarely charge flat fees, usually in low-dollar-value, cut-and-dried matters. Clients tend to favor flat fees when lawyers offer them, because they make legal expenses predictable and prevent overbilling. Lawyers, however, tend only to offer flat fees when they know exactly how much work a particular legal service or case will require. They do not want to run the risk of misjudging a case and charging far less than they would earn if they charged by the hour. So, for example, lawyers usually do not offer flat fees for open-ended lawsuits, but they may offer them for drafting a will, closing a loan transaction, handling an uncontested divorce, overseeing a real estate sale and closing, forming a business entity, or defending a first-time DUI.Contingent Fees
In some types of cases, lawyers agree to work for a client in exchange for a percentage of the amount of money they succeed in obtaining on the client’s behalf, or that their efforts save for a client. Contingent fees are, by far, the most common fee structure for personal injury lawyers to use in representing injured clients. Contingent fee arrangements differ from other fee structures in that clients do not have to pay the lawyer anything unless the lawyer delivers results for them, and even then, the lawyer’s fee essentially comes off the top of what clients ultimately receive. Clients pay no money up-front, and no money as the case goes along. The lawyer, in essence, works on spec and only gets paid if the client gets paid. Were it not for contingent fees, many people injured because of someone else’s wrongdoing would not have access to justice. Personal injury victims rarely have the financial resources to pay a lawyer by the hour or a flat fee, because their injuries put them under financial strain. By offering to work in exchange for a cut of the winnings, so to speak, personal injury lawyers make their services available to anyone who needs them. Personal injury lawyers put terms of their contingent fee arrangements with their clients into an agreement—commonly called a fee agreement, fee letter, or legal services agreement—at the very beginning of the representation. The agreement explains in plain-English how the lawyer gets paid, and specifically identifies the percentage of any recovery the lawyer will receive as a fee. The agreement also explains how the lawyer and client will handle other costs associated with the case, such as travel expenses, expert fees, and other out-of-pocket costs.Worried About the Cost of a Personal Injury Lawyer? Don’t Be.
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- Was I a Victim of Medical Malpractice?
