Accident Lawyer Fees - Negotiating Personal Injury Lawyer Costs

Accident Lawyer Fees - Negotiating Personal Injury Lawyer Costs

How much do accident lawyers charge? What are an auto accident attorney’s fees? And how do I talk to a lawyer about costs?

Attorneys can be expensive. Find out what fee arrangements are available, how you can keep costs down, and what states limit the fees an attorney can charge.
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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.

If you’re in the market for a personal injury attorney, the chances are pretty good you’re already facing mounting medical debt. You may also be facing a prolonged absence from work.

So how much is a personal injury attorney going to cost you?

The answer is more complicated than you might think.

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.

Let’s take a close look at lawyer fees, including the different fee arrangements, the factors that might impact the cost of an attorney, and the various state limitations on what an attorney can charge.

What are contingent fees?

The most common type of fee arrangement in a personal injury case is a contingent fee arrangement.

In a contingent fee arrangement, your lawyer agrees to accept a fixed percentage (usually around 33%) of the money you recover. If you don’t recover any money (either through a verdict or settlement), you don’t owe your lawyer a penny for the work they performed on your case.

Enjuris tip:Fees are different from costs. Even in a contingent fee arrangement, the client is typically expected to pay litigation costs—things like the cost of filing the lawsuit and fees charged by expert witnesses—regardless of whether they recover any money.

A lawyer in a contingency fee case might agree to front litigation costs and seek reimbursement at the end of the case (win or lose). Other attorneys will require clients to pay these costs as the case progresses.

A contingent fee arrangement is typically a good idea if you have a challenging case or you simply don’t have the money to pay an attorney upfront. However, if your case is very winnable and you have the funds, another type of fee arrangement may be more cost-effective.

What are the most common attorney fee arrangements?

Although the vast majority of personal injury cases are contingent fee cases, there are other types of fee arrangements:

  • Hourly rate. The most common type of attorney fee arrangement outside of the personal injury world is an hourly rate arrangement. In short, the lawyer charges a per-hour rate and tracks their time in fractions of an hour. A billing statement documenting the work completed by the lawyer and the time it took to complete the work is sent to the client (usually monthly) to be paid. 
  • Flat fees. Some lawyers charge a flat fee to handle a case. Flat fee cases are typically straightforward and predictable cases (for example, a bankruptcy case or the preparation of a will). It’s uncommon, although not unheard of, for a personal injury case to be handled for a flat fee.
  • Statutory fee. In some states, a statute or regulation sets the amount an attorney can charge for a particular service.
  • Free legal services. There are a number of organizations that offer free (or “pro bono”) legal services. To qualify, you must typically have an income that’s less than 125% of the federal poverty level.
  • Retainer fees. A retainer fee (sometimes called a “deposit”) is a fee that a client pays in advance. The attorney places the retainer fee in a trust account. As the lawyer performs work, they withdraw money from the trust account as payment. Any amount left in the trust account after the legal representation has concluded must be returned to the client. Any of the above-mentioned fee arrangements can include a retainer fee.

What can I do to keep attorney fees down?

Attorneys are expensive.

What’s more, the cost of hiring an attorney has been steadily rising.

Facing factsAccording to a report from Clio, a legal technology company, the average hourly billable rate for lawyers in the United States was nearly $300 at the start of 2020.

Let’s take a look at some simple things you can do to keep attorney fees down:

  • Request a written fee agreement to avoid surprises and miscommunications.
  • Answer all of your lawyer’s questions fully and honestly so your lawyer doesn’t waste time addressing discrepancies.
  • Respond to your lawyer promptly so your lawyer doesn’t waste time following up with you.
  • Consider whether you can or should sue in small claims court (the filing fee is typically less in small claims court and you don’t need an attorney).
  • Consider mediation or arbitration (in lieu of going to trial)
  • Keep your phone calls with your attorney brief
  • Review your bills carefully and dispute any charges that are inaccurate

Keep in mind that attorney fees are not set in stone. As is the case when hiring a babysitter or a contractor, you’re allowed to negotiate.

Before you negotiate, it’s a good idea to shop around and see what rate you can get for a comparable attorney in the area.

Although you may not be successful, it never hurts to negotiate attorney fees. If you’ve done your homework and you have a really good case, there’s a chance the lawyer will drop their price.

Enjuris tip:Just because an attorney costs less, doesn’t mean they’re a better deal. Similarly, just because an attorney is more expensive, doesn’t mean they’ll do a better job. Here are some tips for finding the right attorney.

Are there limits on what an attorney can charge?

In all states, lawyer fees must be “reasonable” based on a number of factors, including the time and labor required, the novelty of the legal issue, and the time limitation imposed by the client or by the circumstances.

However, some states have passed laws that limit the fees attorneys can charge in more specific ways. Many of these laws apply only to certain types of legal services (such as how much an attorney can charge in a bankruptcy proceeding).

Below you’ll find a chart detailing any fee limitations relevant to personal injury lawsuits.

Personal injury attorney fee limitations
State Fee limitations Statute
Alabama No limitations  
Alaska No limitations  
Arizona No limitations  
Arkansas No limitations  
California Contingent fee limitations for medical malpractice cases only are as follows: 40% of initial $50,000 recovered, 33.3% of next $50,000, 25% of next $500,000, and 15% of any amount that exceeds $600,000. CA. Bus. & Prof. Code § 6146
Colorado No limitations  
Connecticut Contingent fee limitations for all personal injury cases are as follows: 33.3% of initial $300,000 recovered, 25% of the next $300,000, 20% of the next $300,000, 15% of the next $300,000, and 10% of any amount that exceeds $1.2 million. Conn. Gen. Stat. § 52-251c
Delaware Contingent fee limitations for all personal injury cases are as follows: 35% of the initial $100,000 recovered, 25% of the next $100,000, 10% of any amount that exceeds $200,000. 18 Del. C. § 6865
Florida Contingent fee limitations for all malpractice cases are as follows: 30% of the initial $250,000 recovered, 10% of any amount that exceeds $250,000. Art. I, §26, Fla. Const.
Georgia No limitations  
Hawaii No limitations  
Idaho No limitations  
Illinois Contingent fee limitations for all medical malpractice cases are as follows: 33.3% of the initial $150,000 recovered, 25% of $150,000 to $1 million, and 20% of any amount that exceeds $1 million. 735 ILCS 5/2-1114
Indiana Attorney fees may not exceed 32% of any award made from the Patient Compensation Fund Ind. Code § 34-18-18-1
Iowa No limitations  
Kansas No limitations  
Kentucky No limitations  
Louisiana No limitations  
Maine Contingent fee limitations for all professional negligence cases are as follows: 33.3% of the initial $100,000 recovered, 25% of $100,000, and 20% of any amount that exceeds $200,000.  
Maryland No limitations  
Massachusetts Contingent fee limitations for medical malpractice cases as follows: 40% of initial $150,000, 33.33% of next $150,000, 30% of next $200,000, and 25% of any amount that exceeds $500,000. Mass. Gen. Laws ch. 231, § 601.
Michigan Contingent fee limitation is 33.33% for all personal injury cases. MCR § 8.121(b)
Minnesota No limitations  
Mississippi No limitations  
Missouri No limitations  
Montana No limitations  
Nebraska No limitations  
Nevada Contingent fee limitations for medical malpractice cases are as follows: 40% of initial $50,000, 33.33% of next $50,000, 25% of next $500,000, and 15% of any amount that exceeds $600,000. Nev. Rev. Stat. § 7.095
New Hampshire Contingent fee limitations for medical malpractice cases are as follows: 50% of initial $1,000, 40% of next $2,000, 33.33% of next $97,000, and 20% of any amount that exceeds $100,000 RSA § 507-C:8
New Jersey Contingent fee limitations for all personal injury cases are as follows: 33.33% of initial $750,000, 30% of next $750,000, and 25% of next $750,000. N.J.S.A. § 1:21-7
New Mexico No limitations  
New York Contingent fee limitations for medical malpractice cases as follows: 30% of initial $250,000, 25% of next $250,000, 20% of next $500,000, 15% of next $250,000, and 10% of any amount that exceeds $1.25 million. N.Y. Laws CVP. § 474-A
North Carolina No limitations  
North Dakota No limitations  
Ohio No limitations  
Oklahoma Not to exceed 50% of the judgment in any case. Okla. Stat. tit. 5 ch. 1 § 7
Oregon No more than 20% of punitive damages awarded can be paid to an attorney; no limitations on economic damages. ORS § 31.735
Pennsylvania No limitations  
Rhode Island No limitations  
South Carolina No limitations  
South Dakota No limitations  
Tennessee Contingent fees are limited to 33.33%. Tenn. Code Ann. § 29.26.120
Texas No limitations  
Utah Contingent fees are limited to 33.33%. Utah Code Ann. § 78.14.7.5
Vermont No limitations  
Virginia No limitations  
Washington No limitations  
West Virginia No limitations  
Wisconsin Contingency fee limitations for medical malpractice cases are as follows: 33.33% of the first $1 million, or 25% of the first $1 million recovered if liability is stipulated within time limits; 20% of any amount that exceeds $1 million. Wis. Stat. § 655.013
Wyoming No limitations  

And here’s a chart detailing any fee limitations relevant to workers’ compensation claims.

Workers’ compensation attorney fee limitations
State Fee limitations Statute
Alabama Fees are limited to 15% of the total award. Ala. Code § 25-5-90(a)
Alaska Fees may not be less than 10% of all sums in excess of $1,000 of compensation. AS § 23.30.145
Arizona Fees are limited to 25% of the total award. AZ Rev Stat § 23-1069
Arkansas Fees are limited to 25% of the total award and the employer of the injured worker is required to pay half of the fees. AR Code § 11-9-715 (2014)
California No limitations but fee must be approved by the Workers’ Compensation Appeals Board. CA LABOR § 4903
Colorado No limitations.  
Connecticut No limitations but fees must be approved by the Workers Compensation Commissioner. Conn. Gen. Stat. § 31-327
Delaware No limitations.  
Florida No limitations.  
Georgia Fees are limited to 25% of the total settlement or the weekly benefit. O.C.G.A. § 34-9-108 (a)
Hawaii No limitations.  
Idaho No limitations.  
Illinois Fees are limited to 20% of 364 weeks of permanent total disability payments 820 ILCS 305/16a
Indiana Fees are limited to $200, plus 20% of the first $50,000 recovered, and 15% of any remaining balance. Ind. Code § 22-3-1-4
Iowa Fees are limited to those an attorney can prove would not have been paid to the injured employee if not for the attorney’s efforts. Iowa Code 86.39
Kansas Feels are limited to 25% of the total award. KS Stat. § 44-536
Kentucky Fees are limited to 20% of the first $25,000, 15% of the next $25,000, and 10% of the remainder with a total cap of $18,000. KY. Rev. Stat. § 342.320
Louisiana Fees are limited to 20% of the total award. RS § 23:1141
Maine Fees are limited to 30% of benefits accrued in a contested case, and 10% in the case of a lump sum settlement. 39-A MRSA § 325
Maryland Fees are limited to 20% of the total award. COMAR § 14.09.04.03
Massachusetts Fees are limited to 20% of settlements where liability is established and 15% on settlements where liability is not established. If payment is ordered after trial, the insurer pays the attorney fees. Mass. Gen. Laws ch.152 § 13A(10)
Michigan Fees are limited to 30% of the benefits received unless the case is resolved through a redemption settlement, in which case fees are limited to 15% of the first $25,000, and 10% of the amount over that. MCL § 317-1969-1
Minnesota Fees are limited to 20% of the first $130,000 of compensation awarded and fees related to the same injury cannot exceed $26,000. Minn. Stat. § 176.081
Mississippi Fees are limited to 25% of the compensation received. MS Code § 71-3-63
Missouri No limitations.  
Montana Fees are limited to 20% for cases settled without an order of the workers’ compensation judge, or 25% for cases that go to a hearing before the workers’ compensation judge. MCA § 24.29.3802
Nebraska No limitations.  
Nevada No limitations.  
New Hampshire Fees are limited to 20% of the compensation received. RSA § 281-A:1
New Jersey Fees are limited to 20% of the compensation received. NJ. Rev. Stat. § 34:15-64
New Mexico Fees are limited to $16,500. NM. Stat. § 52-1-54
New York No limitation (a bill that would cap attorney’s fees is being considered in 2022)  
North Carolina No limitations.  
North Dakota Fees are limited to $185 per hour. N.D.A.C. § 92-01-02-11.1
Ohio No limitations.  
Oklahoma A maximum of 10% of any award for contested temporary disability cases, and 20% of any award for permanent disability cases. 85A OK Stat § 85A-82
Oregon Fees are limited to $26,792. OAR § 438-015-0025
Pennsylvania Fees are limited to 20% of the compensation received. 34 Pa. Code § 131.55
Rhode Island Fees are limited to 20% of the compensation received. R.I. Gen. Laws § 28-35-32
South Carolina Fees are limited to 33.3% of the compensation received. S.C. Code Regs. § 67-1205
South Dakota Fees are limited to 35% of the compensation received. SDCL § 62-4-39
Tennessee Fees are limited to 20% of the compensation received. Tenn. Code Ann. § 50-6-226(a)(1)
Texas Fees are limited to 25% of the compensation received, and $200 per hour. 28 Tex. Admin. Code § 152.4(a)
Utah No limitations.  
Vermont Fees are limited to 20% with a $9,000.00 maximum. 21 V.S.A. § 678
Virginia No limitations.  
Washington Fees are limited to 30% of the increase in award secured by attorney services. RCW § 51.52.120
West Virginia Fees are limited to 20% of the compensation received. WV Code § 23-5-16
Wisconsin Fees are limited to 20% of the compensation received. Wis. Code § 102.26
Wyoming No limitations.  

Keep in mind that if you agree to a contingency fee agreement for your workers’ compensation claim, the agreement will be subject to any contingency fee agreement limitations in the state (in addition to any specific workers’ compensation claim fee limitations).

Frequently asked questions about attorney fees

Still have questions about the cost of hiring an attorney?

Let’s see if we can answer some of them:

How does a lawyer decide on a fee?

A good general rule of thumb is that inexperienced lawyers charge less than experienced lawyers. However, this oversimplifies things.

A lawyer’s fee depends on a number of factors, including:

  • The strength of the case
  • The amount of damages sought
  • The time limitations imposed by the client or by the circumstances
  • The experience and reputation of the attorney
  • The novelty or difficulty of the legal issue
  • The nature and length of the attorney’s relationship with the client
  • The fee customarily charged in the area for similar legal services

Will I get my money back if my case is resolved quickly?

If you agree to a contingent fee agreement, your lawyer will receive their percentage of the award regardless of how long it takes to obtain the award. This is typically the case with a flat fee arrangement as well.

On the other hand, if you pay a retainer, your lawyer is required to return any funds that remain once the case is resolved (i.e., funds your attorney has not earned).

What happens if I agree to a contingent fee with an attorney and then fire the attorney? attorneys?

Consider the following hypothetical scenario:

Samantha is injured in a car accident. She decides to sue the person who caused the accident. Samantha hires attorney John Layman and they agree on a contingent fee arrangement.

Unfortunately, the attorney-client relationship deteriorates after John has performed 15 hours of work. Samantha believes she can get better representation elsewhere so she fires John and hires a new attorney named Ross Cockburn. Ross and Samantha reach a contingent fee agreement.

Ross Cockburn takes Samantha’s case to trial and they obtain a $100,000 verdict.

Samantha knows she has to pay Ross under the contingent fee arrangement, but does she have to pay John?

Yes. Samantha will have to pay John for the work he completed (his hourly rate for 15 hours).

In cases like the one described above, the attorney who is fired will typically place a lien on the award to make sure they are paid before anyone else.

What should I do if I have a disagreement over fees?

To help avoid fee disputes, it’s a good idea to put your fee agreement in writing. Nevertheless, fee disputes do happen even when agreements are in writing.

If you have a disagreement over fees, talk to your attorney. In most cases, the issue can be resolved through a civil conversation. If you’re unsuccessful, contact your local state bar association. Most state bar associations offer a service in which a representative helps to resolve fee disputes.

Does it cost any money to consult with an attorney?

In most cases, initial consultations are free. You can learn more about initial consultations here and you can find a personal injury attorney to meet with using our free online directory.

 

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