Personal injury lawyers almost always work for a contingency fee (also known as working on a contingent fee basis). This is an arrangement between the lawyer and client in which the lawyer agrees only to collect a fee for legal services from any money the lawyer obtains on the client’s behalf. The fee is “contingent” because the lawyer only receives it if the lawyer gets results for the client. If the client does not get paid, neither does the lawyer.
With limited exceptions, no laws or rules mandate a standard amount for the contingency fee in a personal injury case. Instead, in most cases, the lawyer must charge a reasonable fee as recognized by long-standing legal industry practices applied on a case-by-case basis.
Learn how Emorch and Kilduff can support you and more about standard contingency fees.
The 33 Percent Standard Fee: Now More Myth Than Reality
At one time, if you asked what the standard contingency fee was for an attorney, the answer would uniformly be 1/3, or 33 percent, of the recovered amount. This was a simple, straightforward convention, and when it came to the average personal injury case, it more or less approximated a reasonable fee.
That is, on average, the $33,000 a lawyer would collect as a fee for securing a $100,000 for a client’s injuries might roughly equal what the lawyer would have charged the client for the same services if billing on an hourly basis (plus a small premium for the risk the lawyer ran in agreeing to work on contingency). That’s more than worth it to a client who received an initial offer of $25,000—the lawyer more than doubled what the client recovered.
But as any experienced personal injury lawyer knows, it is one thing to talk about what is reasonable on average for a legal fee and quite another to say what is reasonable in any particular case. Sometimes, a lawyer would need to put minimal effort into achieving a favorable settlement, making the 33 percent seem like a windfall. Other times, getting results for a client would require a massive amount of work, making the 33 percent seem like a pittance.
In today’s legal marketplace, 33 percent still serves as a broad rule of thumb when discussing contingency fees, and some states use it as a benchmark in statutes that regulate what lawyers can charge. But 33 percent does not necessarily represent a true standard contingency fee for personal injury attorneys anymore. Instead, as we discuss in the next section, lawyers and clients these days frequently agree on a variety of contingency fees aimed at achieving a reasonable fee in the specific case at issue, instead of as a matter of averages.
Is There Any Flexibility For Contingency Fees?
Personal injury lawyers and their clients agree on the contingency fee at the beginning of the legal representation. A written agreement between the lawyer and the client spells out the amount. So long as the final agreed-upon fee is reasonable and complies with applicable laws, the lawyer and client are free to negotiate its precise amount and the terms and conditions in which the lawyer will collect it.
It remains an industry-standard practice to state the contingency fee in terms of a percentage of the amount the lawyer obtains for the client.
In short, contingency fees today aim to tailor contingency fees to the specific features, challenges, and potential outcomes of the case at hand. A contingency fee must always be reasonable, of course, but will not necessarily fit into any preconceived and rigid standard unless statutes require them.
How do you spot a non-standard contingency fee?
The rule-of-reasonableness that governs contingency fees does set some practical limits on what lawyers can charge. And because some states regulate contingency fees whereas others do not, it is always a good idea to ask the lawyer about any limits or laws that apply where you live.
How do you spot a non-standard contingency fee, even under today’s more flexible standards?
Here are some items worth asking about if you see them in the fee agreement a personal injury lawyer proposes.
- A contingency fee of over 50 percent (which, while not impossible, is higher than most and invites further questions).
- A contingency fee agreement that explicitly or implicitly takes away your right to decide when, whether, and for how much to settle a case;
- A contingency fee that violates your state’s laws (if you live in a state that regulates or caps them).
Ask a Personal Injury Lawyer About Contingent Fees Today
If you suffered injuries in an accident, you might have a right to receive financial compensation. A personal injury lawyer can help you obtain it and will likely offer to charge you a contingency fee to do so.
Contact a personal injury lawyer today for a free consultation to learn more about contingency fees.