How Do Contingency Fees Work?
Posted On behalf of Pfeifer Morgan & Stesiak on Jun 19, 2018 in Personal Injury
Some personal injury attorneys charge clients on a contingency fee basis. This type of fee arrangement allows an attorney to provide important legal services to an injury victim at no upfront cost. If the victim receives compensation the attorney will receive a percentage of the settlement to cover his or her costs. The contingency fee agreement will dictate what percentage of the settlement the attorney receives.
If you would like more information on how contingency fees work, one of the experienced South Bend personal injury lawyers at Pfeifer, Morgan & Stesiak can discuss this during a free consultation. We will thoroughly explain our fee agreement so that you are well informed of how this works before your claim gets started.
What Is a Contingency Fee?
A contingency fee is a certain percentage that a lawyer takes out of the victim’s settlement or jury award if the claim is successful. The lawyer’s fee is completely contingent on the victim receiving compensation for the injury. If the victim does not settle the case and does not win at trial, he or she does not owe any money to the lawyer for attorney fees, even if the lawyer put significant time and energy into the case.
What Are the Benefits of a Contingency Fee Agreement?
A contingency fee arrangement lets someone with a legal problem get legal assistance, even if they do not have the money to pay for it right now. Lawyers benefit by being able to get clients now instead of having to find clients who can afford their hourly rates. Clients benefit by not being responsible for any payment of attorney’s fees if they do not win their case.
How Do Other Lawyers Charge?
Recognizing that accident victims may not be able to pre-pay significant legal fees, many personal injury attorneys charge on a contingency fee basis because they know many accident victims will not be able to pay up front. However, Other lawyers may charge in other ways, including:
- Retainer fee – Some attorneys may charge a down payment amount before commencing action on a case. After the lawyer provides services to exhaust this amount, he or she will likely bill on an hourly rate or with a flat fee.
- Hourly rate – Many lawyers charge based on an hourly rate. They will bill their clients on a monthly basis by multiplying their hourly rate by the number of hours spent on the case.
- Flat fee – Some lawyers charge on a flat fee basis in which they charge all clients who have certain types of cases the same amount. For example, a lawyer may charge the same rate for a divorce case or a DUI defense case.
What Else Should I Know About Contingency Fees?
The percentage of the contingency may depend on what is involved in the case. For example, some lawyers may charge one rate if the case did not involve litigation and a higher rate if the case does involve litigation. The contingency fee amount is usually agreed upon by the client and the attorney. However, there may be certain types of cases where state or federal law establishes a cap, such as workers’ compensation and Social Security claims.
Contingency fees are distinct from other charges that you may be billed, such as filing fees, copying costs or fees for expert witnesses. It is important that you get your agreement in writing and have a firm understanding of how you will be charged before you start a claim.
Contact an Attorney for a Free Consultation
If you have been injured in an accident caused by the negligence of another, contact the personal injury lawyers at Pfeifer, Morgan & Stesiak.
We take all personal injury cases on a contingency fee basis and provide a free initial consultation, so there is nothing to lose by contacting us to learn about your legal options.