If you are in the position of looking for a personal injury attorney, you want to be absolutely certain that the person you hire is someone you can trust to treat you fairly.
As such, you must find a personal injury lawyer who is honest and above board when it comes to fees and costs. While personal injury cases vary widely, as do their monetary outcomes, it helps to have an idea of what is typical of a reputable injury attorney.
When it comes to personal injury settlements, there are several factors that may affect how the money is distributed.
Continue reading for an overview of the most common factors and how they work.
The Attorney’s Contingency
In order to be compensated for their legal services, personal injury attorneys take what is called a contingent fee from the settlement of a client’s case. This means that rather than charging clients by the hour or at the beginning of the case, the attorney takes a certain percentage of the total recovery as their earnings from that case. Therefore, the amount of money an attorney can make from this particular type of case is directly dependent on the amount of money they are able to get for their client.
The most common contingency fee for a personal injury case is thirty-three percent (or one third) of the total settlement. This is not always the case, though – some attorneys charge up to forty percent for cases that are especially difficult or time-consuming, such as ones that go to trial.
There is no governmental regulation dictating how much or how little an attorney may charge as their contingency in a personal injury case, so it is possible, technically, for a lawyer to take a much higher or much lower percentage as their fee.
However, the vast majority of trustworthy injury lawyers keep their fees between thirty-three and forty percent of the settlement.
Nevertheless, that does not necessarily mean that the remaining two-thirds of the settlement goes directly to the client. In virtually all cases, there are other significant costs to be considered.
The Costs of the Case
What many people don’t know is that the attorney’s legal costs — or the amount of money that the attorney must spend in order to get the best possible settlement — must also come out of the settlement. This can mean a variety of different things and therefore the percentage of a settlement that is devoted to costs is nearly impossible to know at the outset.
Some examples of the potential legal costs that may occur in a personal injury case are:
- Charges for obtaining the necessary medical records from hospitals, clinics, ambulance services, etc.
- Filing fees to the court for the filing of certain documents
- Hourly rates for doctors or medical experts needed for evidence depositions
- Mail correspondence between attorneys and any other parties important to the case
- Court reporter fees
- Special process server fees for serving a summons on the defendant
While people are sometimes surprised at the amount and variety of costs involved in a personal injury case, they are necessary in order to get the ideal result for the client.
These costs are separate from the lawyer’s contingency fee, but like the contingent fee, they come out of the settlement once it is reached.
Legal costs are not something that lawyers take for themselves. However, the money necessary to cover these costs is typically automatically deducted from the total settlement by the attorney.
Because each personal injury case involves different costs and because they may achieve a wide variety of settlements, the percentage of the total settlement devoted to costs varies widely as well.
Medical Provider Liens
Medical provider liens are another important factor that affects how settlement is distributed in a personal injury case.
While they can drastically affect the percentage of the settlement that goes to the client, medical provider liens also benefit the client because they enable the providers to be paid for their medical services without billing the client directly.
Medical provider liens are quite common in personal injury cases because the client often accumulates a large number of medical bills resulting from their injury.
When a doctor or facility puts a lien on their patient’s personal injury case, it means they refrain from billing the client directly for their medical services, with the understanding that their balance will be paid out of the case’s settlement. This also benefits clients because often, attorneys are able to negotiate with medical providers and resolve their lien for a lower amount than what they would normally collect from a patient or insurance company.
As with legal costs, medical provider liens are a necessary expense in order to resolve a personal injury case in a way that is legitimate and fair.
The attorney negotiates with lien holders and distributes these funds among them before the client receives their settlement check.
Similar to legal costs, the attorney does not keep this money, but uses it in a way that benefits the client and achieves the optimal outcome of their case.
The percentage of a settlement that is relegated to lienholders also varies from case to case. It generally depends on the extent of the medical bills and how many providers have liens against a particular personal injury case.
Often, the lawyer will set aside one-third of the settlement to be divided among lienholders, making sure that each lienholder gets an amount that is proportionate to their own balance.
However, this is dependant on several factors as well, including whether or not medical providers are amenable to lowering their fees if one-third of the settlement is not enough to cover all of them, as is often the case.
Between a personal injury lawyer’s contingency fees, legal costs, and medical provider liens, the percentage of a settlement taken out of the net amount to the client can be difficult or impossible to know until nearly the end of the case.
The most important thing is that any lawyer you work with is open and honest with you about their pricing and policies.
They should have this information clearly laid out in their contract — that way, even though it is difficult to know the exact amount that will be detracted from your settlement, you will know what to expect.