Accident Lawyer Fees - Negotiating Personal Injury Lawyer Costs

The most common type of fee arrangement in a personal injury case is a contingent fee arrangement.

In a contingent fee arrangement, your lawyer agrees to accept a fixed percentage (usually around 33%) of the money you recover. If you don’t recover any money (either through a verdict or settlement), you don’t owe your lawyer a penny for the work they performed on your case.

Although the vast majority of personal injury cases are contingent fee cases, there are other types of fee arrangements:

• Hourly rate. The most common type of attorney fee arrangement outside of the personal injury world is an hourly rate arrangement. In short, the lawyer charges a per-hour rate and tracks their time in fractions of an hour. A billing statement documenting the work completed by the lawyer and the time it took to complete the work is sent to the client (usually monthly) to be paid. 
• Flat fees. Some lawyers charge a flat fee to handle a case. Flat fee cases are typically straightforward and predictable cases (for example, a bankruptcy case or the preparation of a will). It’s uncommon, although not unheard of, for a personal injury case to be handled for a flat fee.
• Statutory fee. In some states, a statute or regulation sets the amount an attorney can charge for a particular service.
• Free legal services. There are a number of organizations that offer free (or “pro bono”) legal services. To qualify, you must typically have an income that’s less than 125% of the federal poverty level.
• Retainer fees. A retainer fee (sometimes called a “deposit”) is a fee that a client pays in advance. The attorney places the retainer fee in a trust account. As the lawyer performs work, they withdraw money from the trust account as payment. Any amount left in the trust account after the legal representation has concluded must be returned to the client. Any of the above-mentioned fee arrangements can include a retainer fee.

Attorneys are expensive.

What’s more, the cost of hiring an attorney has been steadily rising.

Let’s take a look at some simple things you can do to keep attorney fees down:

• Request a written fee agreement to avoid surprises and miscommunications.
• Answer all of your lawyer’s questions fully and honestly so your lawyer doesn’t waste time addressing discrepancies.
• Respond to your lawyer promptly so your lawyer doesn’t waste time following up with you.
• Consider whether you can or should sue in small claims court (the filing fee is typically less in small claims court and you don’t need an attorney).
• Consider mediation or arbitration (in lieu of going to trial)
• Keep your phone calls with your attorney brief
• Review your bills carefully and dispute any charges that are inaccurate

Keep in mind that attorney fees are not set in stone. As is the case when hiring a babysitter or a contractor, you’re allowed to negotiate.

Before you negotiate, it’s a good idea to shop around and see what rate you can get for a comparable attorney in the area.

Although you may not be successful, it never hurts to negotiate attorney fees. If you’ve done your homework and you have a really good case, there’s a chance the lawyer will drop their price.

In all states, lawyer fees must be “reasonable” based on a number of factors, including the time and labor required, the novelty of the legal issue, and the time limitation imposed by the client or by the circumstances.

However, some states have passed laws that limit the fees attorneys can charge in more specific ways. Many of these laws apply only to certain types of legal services (such as how much an attorney can charge in a bankruptcy proceeding).

Below you’ll find a chart detailing any fee limitations relevant to personal injury lawsuits.

A good general rule of thumb is that inexperienced lawyers charge less than experienced lawyers. However, this oversimplifies things.

A lawyer’s fee depends on a number of factors, including:

• The strength of the case
• The amount of damages sought
• The time limitations imposed by the client or by the circumstances
• The experience and reputation of the attorney
• The novelty or difficulty of the legal issue
• The nature and length of the attorney’s relationship with the client
• The fee customarily charged in the area for similar legal services

If you agree to a contingent fee agreement, your lawyer will receive their percentage of the award regardless of how long it takes to obtain the award. This is typically the case with a flat fee arrangement as well.

On the other hand, if you pay a retainer, your lawyer is required to return any funds that remain once the case is resolved (i.e., funds your attorney has not earned).

Consider the following hypothetical scenario:

In cases like the one described above, the attorney who is fired will typically place a lien on the award to make sure they are paid before anyone else.

To help avoid fee disputes, it’s a good idea to put your fee agreement in writing. Nevertheless, fee disputes do happen even when agreements are in writing.

If you have a disagreement over fees, talk to your attorney. In most cases, the issue can be resolved through a civil conversation. If you’re unsuccessful, contact your local state bar association. Most state bar associations offer a service in which a representative helps to resolve fee disputes.

In most cases, initial consultations are free. You can learn more about initial consultations here and you can find a personal injury attorney to meet with using our free online directory.