How Do Lawyers Get Paid?

Most personal injury attorneys feel a calling to help give justice to victims.  Attorneys are people too though, and they have bills too. There are a few ways that an attorney gets paid, and those are detailed further down.  Typically, in negligence cases, that is through contingent fees.

What is a Contingent Fee?

As the name implies, a contingent fee is “contingent,” or dependent, on the outcome of the case.  The TV commercial version is “we don’t get paid unless you get paid.” Although there is a little more to it than that, such a slogan generally holds true.

Typically, that proportion is 33-45 percent in a straight contingent fee case.  The cut could be a little higher or lower depending on many variables, such as the amount of time the attorney invests in the case.  For example, many lawyers charge a little less if the case settles quickly. About 80 percent of civil cases settle before trial, so this is quite frequent.

Is Hiring a Lawyer Worth It?

33 percent sounds like a lot, but it usually pays for itself, as far as the client is concerned.  Consider the following example:

Veronica Victim is hurt in a car wreck.  If she does not have a lawyer, the insurance company almost always makes a low-ball offer.  So, if her medical bills are $5,000, the insurance company might offer $7,000. Furthermore, medical providers usually do not negotiate with patients in terms of fees.  As a result, Veronica only gets $2,000 for her pain and suffering.

But if Veronica has an attorney, her lawyer will not accept a low-ball offer, because s/he knows how much the case is really worth.  That $7,000 settlement might be $10,000. Moreover, an attorney can negotiate with a medical provider for a lower fee.  So, instead of paying $5,000 for medical bills, Veronica might only pay $4,000. That means Veronica receives $3,000 for her pain and suffering ($10,000 settlement less $3,000 legal fee less $4,000 in medical bills).

Of course, this is just an example and the math doesn’t always work out this way.  However, the general principle is the same.