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Most personal injury law firms get paid by way of contingency fees. The phrase “contingency fee” is probably one that you have heard, even if you have never had a legal case. But not everyone fully understands what this fee is, how it works, and what they should expect as a client of a personal injury law firm.
At The Dixon Firm, we know how important it is for you to trust the firm that handles your personal injury matter. That’s why we strive for transparency and fairness with our contingency fee structure. It’s part of our commitment to ensuring victims’ access to the legal system so they can win the justice and compensation they deserve.
What Is a Contingency Fee?
In general, personal injury law firms ask their clients to sign contingency fee agreements. What this means is that the law firm does not get paid unless they win the case for the client, either by settlement or court verdict. It is called “contingency” because, rather than the client paying their legal fees up front, the firm agrees to represent the client contingent on the result of the case.
If the firm wins, it takes a percentage of the award amount as its fee. This is different from the hourly fees that attorneys charge in other types of cases.
Every law firm, regardless of what type of fee structure they have, must charge reasonable attorney fees. There are various factors that are taken into account to determine if a fee is reasonable. Contingency fees vary from one law firm to another, but they must all be reasonable in amount.
Why Do Contingency Fees Exist?
Litigating a personal injury lawsuit takes time and money. Lawyers, paralegals, office staff, experts, and other individuals have to get paid. There are numerous expenses that courts, process servers, and others charge throughout the case.
Without a contingency fee, these costs would simply be too high for most victims to afford. Contingency fees, therefore, help ensure access to the court system for people who have been injured by the negligent conduct of others. They also shift the risk of losing to the law firms that represent victims, which better incentivizes the firms to work hard on behalf of their clients.
How Are Contingency Fee Percentages Determined?
Every firm approaches contingency fees differently, sometimes varying them from one type of case to another. A medical malpractice case is different from a car accident case, for example, and a relatively minor car accident case is different from a serious one with multiple injuries. The specific percentage that a firm will use as part of their contingency fee structure may vary based on such factors as:
- How much time, effort, and upfront money the law firm will need to invest in the case
- The novelty of the case or the facts involved
- The extent to which the firm will need to investigate and acquire evidence
- Whether there are multiple at-fault parties (later named as defendants)
- The attitudes of the defendants (e.g., are they more prone to settle or drag the case out?)
- The need to retain expert witnesses, who must also be paid for their work
- The skill and experience of the firm
Should I Expect a Written Fee Agreement?
A contingency fee agreement must be in writing to be valid, so you should ask for and expect a written agreement from your law firm. This is also important so you understand exactly what the contingency fee is and which costs you are likely to incur. These are expenses that the firm can later deduct to pay itself and to pay others, as described below.
Once your case concludes, the law firm must provide you with a written, detailed statement. This statement will include information about the fees and costs that accumulated during your case, what the law firm’s share of the total award amount is, and how the firm made this calculation. You should be encouraged to ask questions and raise any concerns about your fee throughout your case.
Why Not Go for the Lowest Contingency Fee?
As you search for law firms to represent you, it’s tempting to sign on with the firm that charges the smallest percentage and therefore the lowest contingency fee. But you should know that these firms often operate based on volume rather than quality. They can charge a lower contingency fee than others because they take on many cases at once, then work quickly through them so the lawyers get paid.
Although this may make quick work of your case, you may not end up with the compensation that you deserve. It is strongly advised that, rather than retain the firm with the lowest fee, you focus more on the firm’s experience, track record, and commitment to client results. Remember, you get what you pay for!
What Happens if I Lose My Case?
Under a contingency fee agreement, you pay nothing if your lawyer does not win your personal injury case. This is important to understand because even though contingency fees encourage attorneys to work hard, they do not guarantee the outcome. No law firm can competently guarantee the results of a case, no matter how compelling the evidence is.
How Are the Victim’s Fees and Expenses Paid?
In most personal injury lawsuits, the law firm’s contingency fee is first subtracted from the total award. Then, any liens against the award are paid. These include:
- Medical liens: Doctors and hospitals are paid for medical services rendered to the victim.
- Insurance liens: If your health insurance company covered your medical expenses, the insurer may ask for reimbursement from the award.
- Medicare and Medicaid liens: These two government programs will also ask for a portion of the money for the medical coverage they provided.
Case-related expenses are then paid, including court filing fees, expert witness fees, and the like. Once all costs are paid for, the victim receives the remainder of the award.
What Can I Expect with The Dixon Firm?
When you retain us as your personal injury law firm, we get to work immediately building your case, acquiring evidence, and working for the best possible outcome that fairly compensates you. With respect to our contingency fees, you can expect:
- A clear, easy-to-understand written agreement that explains our fee structure in detail
- An explanation of various costs you can expect to incur as part of your case
- A statement at the conclusion of your case that explains how our firm is paid
- Answers to your questions and concerns about fees and costs
- Transparency and accessibility throughout the duration of your case
Were you or a loved one injured due to someone’s negligence? Would you like to learn more about how contingency fees and compensation work in a personal injury lawsuit? Connect today with The Dixon Firm to get started on your case.
