One of the most common questions personal injury attorneys receive from potential clients is how much they will charge. These clients have often heard tales of high-priced attorneys who charge hundreds or thousands of dollars per hour — far more than they can afford.
While these tales aren’t entirely inaccurate, they typically involve fees charged by defense attorneys or corporate lawyers. Attorneys who handle personal injury litigation rarely charge by the hour. Instead, nearly every personal injury litigation lawyer charges a contingency fee.
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What Is A Contingency Fee?
A contingency fee is a percentage-based fee structure that implies two important things. First, it means that you pay your attorney only if they successfully obtain compensation for you.
Here’s how it works: Suppose that you are involved in a car accident and sue the other driver. During a civil trial, a jury determines that you are responsible for the injuries you suffered, and it does not award you any damages. Because you do not receive any money, the law firm handling your case does not charge you attorney fees.
With a contingency fee structure, you will pay your attorney only when you receive compensation, which you might obtain at the end of a trial or from a settlement.
The second thing that a contingency fee means is that you will always come out ahead if you receive compensation.
The State Bar of California regulates fee structures. One of the most important restrictions is that no lawyer can charge an unconscionable fee.
If a lawyer tries to charge you more money than they obtained for you, that would be considered unconscionable by almost every judge in the country. While there is no precise guideline for when a fee becomes unconscionable, most personal injury lawyers charge between 25% and 40% of what was obtained, and judges typically look unkindly on any fees higher than that.
Other Important Restrictions On Attorney Fees
The State Bar of California expects every lawyer to be ethical, and it enforces that expectation with disbarment and other disciplinary actions. It doesn’t expect lawyers to arbitrarily determine for themselves what is ethical, especially when it comes to fees.
Attorney fees are regulated by several pages of rules that dictate things like how to inform clients about fees and how to distribute settlement funds. The most important rule is that personal injury lawyers can’t surprise you with fees. Before a lawyer can charge you anything, they must explain their payment structure in full, and you must agree to it without coercion.
While the California Bar doesn’t require lawyers to put all fee structures in writing, it highly encourages attorneys to do so. If an agreement isn’t in writing and isn’t signed by all parties, a judge is likely to side with the client rather than the lawyer.
Thus, you can expect your lawyer to present you with a written contract and to answer any questions you have about the fee structure before you sign it.
If a lawyer fails to present any information, doesn’t provide a written contract, or avoids answering questions about their fee structure, you should not hire them. You may even want to consider reporting them to the State Bar of California.
Contingency Fee Limits
If you are hiring a lawyer in California, there is no state-mandated limit to contingency fees. However, that isn’t true in every state. For example, the state of New Jersey places strict limits on contingency fees.
In that state, a lawyer may charge at most:
- 33 ⅓% of the first $750,000 recovered
- 30% of the next $750,000 recovered
- 25% of the next $750,000 recovered
- 20% of the next $750,000 recovered
- A reasonable fee on any additional money recovered
Violation of these rules can result in state-assigned penalties.
Graduated Fee Structures
The above rules also reveal a common way that many attorneys approach contingency fees. While not all states mandate graduated fees, many lawyers choose this fee structure for several reasons, including fairness and competitiveness.
For example, imagine that you schedule free consultations with two lawyers. The first lawyer charges a flat 30% fee for all recovered money. The second charges 35% of the first $100,000 and 25% of all money recovered after that. If you think your case is worth several hundred thousand dollars, you might be inclined to choose the second attorney.
There is also another way that contingency fee structures can vary. Many lawyers will charge a lower percentage if a case ends with a negotiated settlement. They will increase their fee if the case goes to trial. This is because attorneys need to devote more total hours to a case when it goes to trial.
The exact details of when the contingency fee increases will depend on the lawyer. Some will charge the higher fee as soon as they file a lawsuit, while others may wait until they first step into a courtroom.
Expenses
There is one common exception to the standard contingency fee rules: expenses. Many attorneys bill their clients for expenses like court filing fees and the cost of hiring expert witnesses. These costs are usually quite low during settlement negotiations. However, they might spiral if the case goes to trial.
Similar to contingency fee rules, a lawyer can’t surprise you with a bill for case-related expenses. They must tell you in advance that you will pay for specific expenses and give you appropriate notice before these costs are incurred.
Frustratingly, many attorneys charge expenses even if they fail to get money for their clients. This is one of the more common differences between various lawyers’ fee structures.
Some will charge for expenses only if they obtain money for their clients, eating the costs themselves if they lose a case. Others will always charge, even if they lose. Finally, some lawyers may split the difference in some way, such as by charging only a portion of expenses if they fail to obtain money for their clients.
You should discuss all potential case-related expenses before agreeing to hire a lawyer and ask for regular updates on any costs you incur.
Contact Mission Personal Injury Lawyers Today
Were you hurt in an accident due to the negligence of another? A personal injury lawyer may be able to help you get compensation for what you’ve lost. Before choosing a lawyer, discuss their fee structure to understand what you are agreeing to.
Want to know more? Contact Mission Personal Injury Lawyers today at (619) 777-5555 to schedule a free consultation.
