If you have been involved in an auto collision, then you already know how expensive it can be. Even if it wasn’t your fault. You may have medical bills looming overhead, plus a loss of income while you were recuperating and the damage to your car. A lawyer will be able to help you recover those monetary damages, but will you have the money to pay for that ?
There are a number of things to take into consideration when filing an insurance claim after a car accident that these lawyers have special knowledge of. Your California car accident attorney fees will be determined by the way in which they charge for their services.
How Contingency Fees Work
Thankfully, most car accident lawyers work on a contingency fee when charging for their services. This is unique to personal injury lawyers and makes the situation virtually “risk-free” for the client.
A contingency fee means the lawyer will not get paid by the client until they recover money in the case. Then, if they do recover money for the client, the lawyer is paid from either :
- A percentage of the settlement from a car accident claim or
- A portion of what’s awarded by a judge or jury in court
Contingency fees can be very beneficial because they help ensure the lawyer has your (as the client) best interests in mind. Bringing a great outcome in the case helps both parties because you have a good chance of financial recovery and your lawyer has a good chance of getting paid a portion of what they win. The lawyer is literally “contingent” on a favorable outcome in the injury case.
A Car Accident Lawyer’s Contingency Fee Percentage
Most car accident attorneys charge for their services in a fairly unique way—as opposed to the hourly fee that many firms charge in other types of cases. The typical car accident lawyer will charge a « contingency fee » to take on an injury case. A contingency fee means that the firm will not get paid any attorney’s fees unless you recover money in your case. The lawyer or law firm will get paid a percentage of money received from any or jury verdict (if the case goes all the way to trial).
The percentage that a personal injury lawyer can receive in a contingency fee agreement varies, but typically ranges from 25 to 40 percent, and 33 percent (or one-third) is pretty standard. So, if you have a 33% contingency fee arrangement and you recover $90,000 in your car accident case, your attorney will receive around $30,000.
A contingency fee percentage may vary depending on whether a personal injury lawsuit has to be filed against the other driver (the defendant). If the case settles before it goes to court, the percentage may be on the lower side.
However, if settlement occurs after suit is filed and after the defendant has served a formal answer to your complaint—or if the case proceeds to trial and a jury verdict is reached, the attorney’s share may increase to 40 percent.
As an example, suppose your lawyer sent a demand letter to the other driver’s insurance company in your case, and you quickly reached a settlement for $90,000. In this situation, the attorney would again receive $30,000 (33%). However, suppose that the case instead ended in a jury verdict of $90,000 and your agreement (and/or the law in your state) allows the attorney to receive 40% of a recovery after the complaint is answered. In this situation, the attorney can recover $36,000
It is always important to speak with your attorney about the contingency fee and to carefully review your contract for legal services. If you do not understand the fee arrangement as stated in the contract, ask your attorney to explain it to you.
Also, just like everything in a contract, the fee is negotiable. If yours is a « cut and dry » case—fault for the car accident and your damages are clear, the defendant has plenty of car insurance, and there’s ample evidence backing up your claims—you can certainly negotiate a lower contingency percentage. You don’t need to give up a third of your compensation simply because you need the leverage of having a lawyer on your side.
Beware of attorneys who offer a discount on the contingency fee percentage
Again, the industry standard for most personal injury matters is about one-third of the recovery. However, some lawyers try to undercut the market by charging lower fees, as low as 25%. This may seem like an attractive offer. Who wouldn’t want to keep more of their settlement?
The problem is, as with so many things in life, you get what you pay for. An attorney who charges a lower fee can’t afford to put as much time and effort into your case as an attorney who charges the industry standard fee. Discount attorneys depend on case volume, which means they put fewer resources into each case. That means a less thorough investigation and a less robust case. You’re likely to end up keeping a higher percentage of a lower number, which means less money in your pocket at the end of the day.
Some of the particular issues with discount car accident lawyers include :
- They may not handle the property damage portion of your claim. Most car accident attorneys will handle claims for vehicle damage as a courtesy for their injured clients, but the discount lawyers often do not – and no other attorney will take your claim for property damage by itself. That could leave you struggling to find money to repair or replace your vehicle
- They may not negotiate with your hospitals and medical providers to lower your medical expenses. Remember, the goal in a car accident lawsuit isn’t just to maximize the topline number; it’s to maximize the amount of money you keep. A good lawyer will work to lessen your costs and can often get your doctors to accept a lower amount so that you can keep more.
- They may be more averse to risk. The point of a contingency fee is to cover the risk an attorney takes in advancing the time and costs of litigation with no guarantee of results. An attorney who charges a lower fee is also less willing and able to take those risks, which means the pressure is on to settle the case sooner – and often for less money.
- They often have less experience and a spotty track record of results. If a lawyer has to compete with other lawyers on price, there’s probably a reason they can’t compete on quality.
Remember, your choice of an attorney is critical because you only get one shot at full compensation after a car accident. Once you accept the insurance company’s money, that’s it. You can’t go back for more, even if your expenses turn out to be higher than you thought. The danger of hiring a discount lawyer is that you may end up accepting a smaller settlement so that the attorney can just move on to the next case.