Negotiating Fees with a Personal Injury Lawyer

How do accident lawyers charge? Are there any hidden costs?

An injured person sits down and tries to find accident lawyers that can represent their interests.

They've seen the ads on TV.

They've looked through the search engines and found an array of personal injury attorneys trying to get their interest.

Negotiate fees with an accident attorney: Money Talk

As you struggle to handle bills and medical expenses, you may also be asking “How do I pay my lawyer?”

Digging deeper, it becomes apparent that everyone sees the issue of payment differently.

Most lawyers, as is the norm in the industry, handle personal injury fees on a contingency basis, meaning they only take a portion of the settlement or verdict if they're successful in getting money for the client.

The percentages, however, are all over the place, and some accident lawyers have hidden costs.

The situation can be baffling:

Why does one firm only work on contingency while another expects certain costs to be paid in advance? Is there really a benefit to be gained from working with a practice that wants 40% of the recovery versus one that only wants 25%?

Accident Attorney Fees

Be sure to ask about:

  • Contingency vs. hourly or flat fee
  • Upfront costs
  • Fee changes for going to trial or other conditions
  • Expenses charged separately

If you like the firm but aren't thrilled about their fees, how much room do you have to negotiate?

Contingency-based fees - what are they?

The majority of injury law practices work on contingency.

This means that you, as the injured party, agree to pay a portion of any compensation that's recovered to the firm when the case is settled or a verdict is handed down.

Contingency - you pay a portion of compensation from your case to your lawyer but owe no fees upfront  Tweet this

There are several reasons for this practice within the industry:

  • 1

    Firstly, a lot of injured people end up in situations where they simply cannot afford to pay upfront for counsel, due to medical bills and lost work time.

  • 2

    Secondly, it provides the attorneys an incentive to work harder to achieve a higher settlement amount.

  • 3

    Thirdly, the risk of higher settlements and verdicts can drive insurance companies and responsible parties to choose to settle sooner.

Accident attorney fees and what to look for

There are several things to look out for when considering the fees you're expected to pay.

The first issue is upfront costs.

Most injury practices offer free initial consultations, so you shouldn't have much trouble at least finding someone to talk to regarding the merits of your injury claim.

Secondly, you'll want to learn what the accident attorney's fee is. 33.3-percent is considered a typical starting point for contingency fees in Texas and other states - although there is no standard fee across the industry.

Some firms will raise the fee if the case has to go to trial to 40%, for example, and they may also require you pay expenses.

Competition in the field is driving fees down, with some firms now going as low as 15%.

Generally, if a case is smaller, the firm will want a greater portion of the recovery in order to be fully compensated for its time.

Enjuris tip: Generally, if a case is smaller, the firm will want a greater portion of the recovery in order to be fully compensated for its time.

It is possible to find injury law practices that work on hourly or flat rates. You should be prepared, however, in this scenario to put up a lot of your own money early on in the process.

It's also likely that the practice taking on your case will want expenses for investigators, travel and other needs paid upfront.

Negotiating with a personal injury attorney

There is an essential tension between the client and the attorney when dealing with fees.

As an injured person, you'll likely wish to get as much money as possible.

There's also a fear that if the case settles quickly you won't really be getting your money's worth from the lawyer. You'll owe them the agreed upon percentage no matter how long the case takes.

From the attorney's perspective, the fear is reversed.

A personal injury lawyer worries that he or she may end up shelling out money to pay for specialists to testify, only to ultimately end up footing the bill if the case results in no recovery.

There is no happy medium, and that means you have to be prepared to negotiate.

As with almost any deal, you should shop around. If you can find several similar law firms in your part of the state to take on your case, it's prudent to find who has the best fee structure.

Enjuris tip: Even putting in an additional week of searching could yield significant benefits by way of lower fees or better representation.

If you like one firm's service but want a lower fee, don't be afraid to ask. If you have a good case, there's a chance that the firms you're talking to will be comfortable budging a bit on fees in order to get it.

Time is always of the essence. In Texas, for example, statutes limit your time to file a claim to two years from the date of the injury. You're also likely already dealing with a lot of bills, and getting compensation means paying those sooner.

Your lawyer may not have to even charge you a single penny

In some cases the attorney may not have to even charge their client a single penny. In these cases, the attorney collects a “reasonable hourly fee” from the losing side.

The circumstances tend to be strict, but Texas, for example, expanded upon its “loser pays” rule in 2011.

Enjuris tip: While your attorney may not charge you directly, there’s a possibility you would have to include as income the fees they collect from your settlement, if your settlement or verdict is taxable. See taxation details on our blog here.

If you are in a situation where you must have an attorney represent you, do not be afraid to ask the attorney how she plans on collecting her fee.

Don't shy away from discussing fees with your attorney.

We tend to want to just assume and hope that things will go according to our expectations. Money is an uncomfortable subject for many people. However, it's always best to get a clear picture of expectations from both sides.

The discussion about fees is also a good way to gauge how well your lawyer will treat you.

Enjuris tip: The necessary discussion of fees is a good way to get a sense of how your potential lawyer will treat you when you're working together. For example, are they forthcoming with details or hoping you'll simply trust them?

If the lawyer has no problem with the discussion about fees, then the lawyer is most likely a professional working in accordance with the rules - and he or she should be able to put you at ease when discussing their fees, too.

Furthermore, don't be afraid to request an attorney fee agreement in writing. A good, professional lawyer should provide his or her fee agreement in writing.

Avoid the temptation of the easy oral agreement.

Finding the right accident attorney is worth putting in the extra time

The biggest challenge when seeking to negotiate fees with an injury attorney is that the situation is inherently unfair. Injured people are among the most financially vulnerable, due to loss of work and accumulated medical expenses.

Obtaining counsel on contingency is typically not the most efficient way to do it, but you may be in a position where there is no other way to move ahead with your accident case.

Within the limits of your situation, including time and money problems, try to patiently contact and negotiate with the lawyer that you're comfortable dealing with.

Even putting in an additional week of searching could yield significant benefits by way of lower fees or better representation.

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