Multiple surveys indicate that concerns about legal fees and costs are the top reason prospective clients hesitate to contact or retain attorneys. Injured claimants often fear adding up their mounting medical bills, finding the money for a retainer, or being charged for a simple consultation. Even claimants who know they need to find a lawyer may realize they could never afford one.
These fears are sometimes justified, as even prevailing parties can seldom recover attorneys’ fees. However, an exception to traditional hourly charges – called a contingency fee arrangement—exists for many personal injury claimants. Lawyers accepting cases on a contingency fee basis often work harder for their clients because they simply take a portion of a claimant’s overall financial recovery instead of charging by the hour. This arrangement often results in injured claimants recovering needed compensation without any out-of-pocket costs, and consultations are almost always free. It may cost nothing to speak with and retain a plaintiff’s attorney.
Understanding the Main Types of Attorney’s Fees in the United States
Three main types of attorney’s fees exist in the U.S.—(1) hourly, (2) contingency, and (3) flat. The litigation’s nature, such as criminal defense, personal injury, family, or transactional, generally dictates the types of fees charged.
Hourly rates often require clients to pay for several hours upfront, known as a retainer, and then compensate lawyers for every hour worked after that. Most law firms charging hourly fees send clients monthly statements setting forth the hours worked, tasks completed, costs incurred, and balance owed. Some attorneys work out payment plans with clients, but it’s difficult to anticipate the number of hours needed on a single case.
A complicated legal issue may arise, costing clients twice as much as they expected. Typical hourly rates depend on the attorney’s location, experience, and area of practice, but they generally range from $150 to $500 per hour.
Cases traditionally handled with hourly fees include:
- Criminal defense
- Child custody
- Patents, copyrights, and trademark applications
- Civil and corporate defense
- Business advisory matters
- Tax advice and defense
In some cases, successful defendants may recover their attorney’s fees from the other party based on the terms of a contract, statute, or court rule. Attorneys should make clear, however, that judges often have discretion in such matters. Retainer agreements for hourly fees should contain the attorneys’ rates, the representation’s scope, and any anticipated costs.
A contingency fee arrangement refers to a fee structure whereby attorneys take a certain percentage of their client’s overall financial recovery. As the name suggests, this type of fee arrangement is conditional. Lawyers take the risk when accepting cases on a contingent basis because if they fail to recover compensation, they do not get paid.
This high-risk, high-reward approach gives needier persons the chance to pursue legal claims without any upfront costs. Law firms typically front the money for filing fees, court courts, medical records, and expert witness expenses in such cases. Importantly, successful claimants must pay back these costs at the end of the case and may not generally recover attorneys’ fees in addition to compensatory damages.
For smaller cases and certain one-time transactions, attorneys may charge a flat fee to handle the entire matter. Some firms offer flat fees with monthly payment arrangements. Attorneys may always provide this type of fee structure, but it is more common in real estate, traffic defense, no-fault divorce, wills, contract drafting, and business transaction cases. Flat fees protect clients from surprise bills by letting them know what they owe upfront.
Pro Bono, Legal Aid, and Representation for Indigent Defendants
Defendants charged with a crime, children and disabled adults subject to guardianship proceedings, and parents subject to CPS investigations might be entitled to free legal counsel if they cannot afford an attorney. Legal aid clinics may also provide pro bono (free) or reduced rate legal services to domestic violence victims, children, or lower-income residents. Some major law firms also take cases on a pro bono basis to help their associates gain experience. Local attorneys may connect you with a firm or clinic to suit your needs if they cannot assist you.
Cases Traditionally Accepted on a Contingency Fee Basis
Plaintiff’s attorneys, such as civil tort lawyers, typically work on a contingency fee basis. These attorneys generally negotiate personal injury settlements with insurers or fight for a substantial jury verdict during a trial.
Types of cases commonly accepted on a contingent basis include:
- Car, truck, and motorcycle accidents
- Slip and falls
- Medical malpractice
- Worker’s compensation & worksite safety
- Employment discrimination & sexual harassment
- Disability benefit applications and appeals
- Social Security appeals
- Civil rights litigation, including police brutality
- False imprisonment
- Assault and battery
- Product liability
- Wrongful death
- Intellectual property infringement
Major class action lawsuits, such as asbestosis litigation, also traditionally proceed on a contingency basis. Attorneys generally weigh a potential case’s value with the anticipated work involved before offering a contingency arraignment. Lawyers cannot accept claims on a contingency fee basis if they do not involve a potential financial recovery. Further, local practice rules generally prohibit legal professionals practicing family law, including divorce and child custody, from accepting contingency fees from divorce, alimony, or child support recoveries.
Calculating the Amount of a Lawyer’s Contingency Fee
When accepting a case, legal counsel must provide clients with a written contract explaining how they will calculate their contingency fee and recover compensation for litigation expenses. This retainer agreement should include the percentage of the fee (such as 25 percent or 40 percent), explain the scope of representation, and provide a sample calculation.
Some states require attorneys to use a sliding scale method of calculating contingency fees, such as 33 percent for recoveries under $1 million and 25 percent for recoveries over $3 million. You may see these statutory limitations in medical malpractice cases.
Traditional Personal Injury Contingency Fee Agreement
A traditional contingency fee works as follows: An attorney helps a client get the insurance company to settle a car accident claim for $100,000. The attorney and client have agreed to a 33 percent contingency fee for this recovery ($33,333), leaving $66,667. The attorney then subtracts their expenses of $1,200 (medical record costs, mailing, and filing fees) from the $66,667, leaving $65,467 for the client.
That amount generally exceeds what a person without legal training can get without a lawyer’s help—often by a substantial amount.
Contingency Case With Litigation Liens
In most cases, lawyers must check to see if anyone claims a portion of the client’s recovery. These liens generally come from medical insurers, doctors, expert witnesses, litigation lenders, state social services, or child support enforcement organizations. Claims on recovery mean that someone paid expenses the defendant was responsible for or agreed to provide services, such as expert testimony, and take payment from the verdict.
The attorneys’ fees and costs generally take precedence over all other claims associated with an eventual settlement or verdict. If the client has a $10,000 medical lien, the attorney pays this after their fees and expenses, leaving the claimant about $55,467 of the original $100,000 settlement. Clients must generally approve any proposed settlement offer, so they must understand how much they will personally receive as compensation.
Unsuccessful Litigation in Contingency Cases
Law firms must generally investigate the case’s basic facts, including accident reports, medical records, and client history, before agreeing to representation. If the attorney cannot recover compensation for a client, such as the judge dismissing the case, the client does not generally owe the lawyer any fees or payment for litigation costs. In rare cases, courts might require clients to compensate lawyers for expenses if they contributed to the loss, such as refusing to attend depositions or lying about evidence.
Types of Compensation Often Recoverable in Contingency Fee Cases
Most viable tort litigation results in an insurance or private settlement before or during litigation. However, the settlement offer typically depends on the amount of direct and indirect damages suffered by the claimant. Attorneys must gather evidence of recoverable damages and submit this to the insurance company or defense counsel to support a monetary demand.
Successful plaintiffs may recover both economic and non-economic damages. Economic damages include calculable past and future losses, such as medical bills, missed job promotions, lost income, nursing care, household help, medical transportation, and property damage. Non-economic damages refer to intangible losses that are difficult to value. These include emotional suffering, mental anguish, pain, inability to perform daily activities, lost enjoyment of life, inconvenience, and lost spousal companionship.
Occasionally, claimants might speak with a personal injury attorney about recovering punitive damages. Punitive damages punish the offender for especially egregious conduct. Many states limit or do not permit these damages for traditional torts, such as negligence. However, if a defendant intentionally caused harm, acted recklessness, or conducted themselves in bad faith, a plaintiff might collect punitive damages. Examples include drunk driving accidents, sexual assaults, the knowing release of dangerous products, or intentional violations of workplace safety protocols.
Potential Consequences of Not Contacting Legal Counsel
Unfortunately, stories exist of insurance companies calling victims after accidents and tricking them into signing liability waivers. Sometimes claimants often try to handle minor cases independently, but the internet seldom provides accurate information about the intricacies of legal practice. Unrepresented plaintiffs might get into trouble for filing inaccurate pleadings and motions, or failing to give evidence to defendants. In most cases, defendants have insurance company lawyers representing them, so plaintiffs need an attorney on their side.
Prospective claimants should consider scheduling a free consultation with a local lawyer about filing deadlines and the statute of limitations applicable to their case. Claimants injured by a state or federal worker, or hurt on public property might only have a few months to file a notice of claim with the government. Failure to do so could result in a complete waiver of their right to recover compensation. Likewise, most insurance companies require injured plaintiffs to notify them of a claim within 30 days or forgo certain essential benefits.
Numerous exceptions to specific claim deadlines and statutes of limitations exist in personal injury and related contingency fee cases. For example, victims of sexual abuse as a child, construction-related cancer, or medical malpractice due to misdiagnoses might have additional time to file a claim. Take time to speak with an attorney, even if you believe you missed a claim or litigation deadline.
Additional Services Often Provided to Law Firm Clients
Once a lawyer accepts your case, you form an attorney-client relationship.
Law firms may provide these additional services to clients free of charge during pending litigation:
- Submitting insurance claims
- Appealing medical insurance denials
- Filing notices with the probate court
- Negotiating reductions in medical liens
- Helping you obtain litigation funding from a reputable lender
- Recommending and scheduling appointments with medical providers
- Representing you during independent medical examinations
- Responding to all discover and evidentiary requests
- Finding expert witnesses
- Coordinating witness travel and accommodations
- Dealing with medical bills and collection claims
Once clients officially retain a lawyer, all communication related to the case must go through counsel. Defendants, attorneys, insurance adjusters, and interested third parties cannot typically contact clients without their lawyers’ permission. Retaining legal representation could immediately stop all harassing collections and insurance phone calls related to the case, and give clients peace of mind.
Benefits of Consulting a Plaintiff’s Attorney
Because personal injury lawyers take a percentage of their clients’ overall recovery, the higher the verdict, the more an attorney gets paid. This fee structure often pushes lawyers to work more diligently in contingency cases, mainly because they do not receive compensation for their work if they can’t help clients recover damages. Unless an attorney tells you otherwise, personal injury lawyers do not charge for consultations, even if they decide not to take your case.
Importantly, legal ethics rules also dictate that all consultations are confidential. You may speak with a lawyer about your case’s facts, and an attorney may not share these facts even if you do not retain their services. There is little to no risk associated with scheduling a consultation with a plaintiff’s attorney.
They might take your case on a contingency fee basis, provide basic legal advice about your claims, or help you connect with another attorney or legal service. Look for local attorneys who offer free consultations, and ask them about their fee structure directly.