Personal injury attorneys usually represent clients on a contingency fee basis. That means the attorney is paid an agreed upon percentage of whatever settlement they negotiate or verdict they win on behalf of the client once the case is concluded. If a client agreed to a 30 percent contingency fee with their attorney when they signed their representation contract, then the attorney negotiates a settlement for $100,000, the attorney would be paid $30,000 out of the settlement.
Contingency fees are ideal for personal injury clients because they don’t have to pay their lawyer up front or out of pocket. There’s also a built-in incentive for the attorney to maximize the client’s recovery. The more the attorney wins for the client the more they will be compensated for their efforts.
Although that additional motivation often turns out to be beneficial for the personal injury lawyer’s client, it also has the potential to be a negative. Some attorneys may seek to minimize the amount of time they put into their client’s case to increase their hourly rate.
Consider if in the previous example the attorney put 30 hours into the case. That would mean they were paid $1,000 an hour for their effort. But what if they could put in half the time and the client would still win $90,000? The personal injury lawyer would only be paid $27,000, but they’d make $1,800 an hour instead of just $1,000 an hour.
Not every personal injury attorney thinks in those terms. Many truly care about their clients and will put in the time and effort necessary to maximize their client’s settlement, but you should still be warry when consulting with personal injury attorneys.
When you’re sitting down with a lawyer for your free initial consultation, do your best to get a feeling for how they feel about their work. Do you believe they represent people injured in car crashes and workplace injuries solely for the money? Or do you get the feeling they truly care about their clients’ recovery?
A modified contingency fee is a combination of an hourly fee and a contingency fee. The client pays a greatly reduced hourly rate and is charged reduced contingency fee rate after the case is over. If a person injured in a car accident barely has money to pay their rent and childcare because they’re injury prevents them from working, chances are they don’t have money for even a low hourly fee.
Modified contingency fees can be used if the client has the financial means to pay hourly or a lawyer is representing a business in some kind of commercial dispute. A modified contingency fee has the benefit of incentivizing good representation but with less risk for the attorney. Attorneys may also be more willing to accept a difficult case if they aren’t relying solely on the contingency fee for compensation.
Hourly fees are used for many legal services that won’t end with compensation or damages. Divorce cases, contract reviews, criminal cases, estate planning, real estate due diligence or immigration cases are frequently represented on an hourly fee basis. A lawyer’s hourly rate will usually depend on their experience and reputation as well as their practice’s overhead costs.
Hourly rates are often negotiable. An attorney may also request a higher rate if a case is going to be particularly challenging or if they are concerned about liability exposure.
If you do ever find yourself in a situation where you need to hire an attorney on an hourly basis, make sure to ask about what is and isn’t billable and the minimum increment that can be billed. Some lawyers bill a minimum of 15 minutes per interaction, so a three-minute phone call could cost you a hundred dollars or more.
An attorney might provide specific services for a flat fee. You may sometimes see estate planning or divorce lawyers advertising for flat fee services. They may say they will set up a living will for $300 or represent you in an uncontested divorce for $600.
The contracts for flat fees are generally quite specific, since the attorney will lose money if they end up needing to spend a lot of extra time dealing with case complications.
Retainers are considered a type of flat fee. There are scenarios in which a desperate client is willing to pay as much money as necessary for a lawyer. Their perspective on paying their attorney may change once the case is all over. A lawyer may request a large “retainer” up front so they can get paid even if the client is eventually unable or unwilling to pay their hourly fees.
The attorney you choose for your personal injury case in Florida may have a significant impact on the compensation you receive. When hiring a lawyer for car accident injuries, workplace injuries or slip and falls, do your best to gauge the integrity of the attorney.
Contingency fees are often the only viable option for people who need compensation to put their lives back together after car accident injuries or slip and fall injuries. Try to find a lawyer who wants to maximize your recovery no matter how much time and effort it takes.