After practicing law for over 27 years, 20 of which has been devoted exclusively to representing injured individuals in car accident cases I’m still surprised at how often I am asked by prospective clients “how do I pay for you to represent me?” Most clients have never been in a car accident before, so they have no way of knowing exactly how an injury attorney gets paid or they are unclear on the specifics. Hopefully, this short blog will answer your question.
Simply stated, most if not all injury attorneys will require a new client to sign what is called a Contingent Fee Agreement. These agreements call for a lawyer to receive a percentage of the client’s gross recovery as their fee. The exact percentage can vary from attorney to attorney but the range is most commonly between 25 and 40% of the settlement amount or verdict amount.
These Contingent Fee Agreements have been the subject of both praise and criticism over the years but they no doubt provide both a societal and individual benefit to all of us. These agreements allow the poorest members of our society to retain high-quality legal counsel to fight for their rights if they’re injured. If the system was not in place a very large percentage of our population would never be able to afford to hire a lawyer even though they were seriously injured and even though it was no fault of their own. Also, since a lawyer has a financial stake in the outcome of the case they are careful to take only cases that have merit. A lawyer who repeatedly takes cases that do not have merit wouldn’t get paid and would soon find themselves out of business. A lawyer working on a contingent fee basis has the unique incentive to devote his time money and energy to resolving his client’s case in the most efficient manner possible and for the fullest value possible because his or her compensation depends on it. Whereas the lawyer who is billing his client by the hour gets compensated whether they are successful or not. They have less incentive to work efficiently and in theory, at least they get paid more the longer the case drags on.
Massachusetts, like most states, has ethical rules that govern the application of contingent fee agreements. Rule 1.5 of the Massachusetts Rules of Professional Responsibility requires the agreement be in writing, executed in duplicate, and detail the method by which the fee is to be calculated and how reimbursement for expenses will be handled.
Although each case is different, most cases have expenses associated with their handling. These expenses can range anywhere from just a few dollars to tens of thousands of dollars in very complex cases. Most lawyers will advance these costs, meaning they will pay them out of their own money, until the case is either settled or the client is awarded money after a trial in court. Again this type of arrangement benefits the client greatly as they do not have to come up with any of their own money during the case. And again, this arrangement promotes the societal goal of keeping frivolous cases out of our courts as a wise attorney will not invest his or her own money into a case they believe has little or no merit. Why would they?
If you are hiring an attorney to handle your injury case you will be asked to sign a contingent fee agreement. Before you do, be sure you understand the following:
- how the fee is calculated
- whether you are required to pay any costs during the process
- what type of costs are likely to be incurred in your case
- if the case is unsuccessful will you owe the attorney anything
- if you change lawyers will you owe anything to the lawyer
- does the agreement cover both the trial case and an appeal if necessary
Make sure you fully understand the agreement before you sign. Take it home, think about any additional questions you may have. Sometimes just sleeping on it for a day or two will bring to mind more questions you would’ve liked answered. Do not feel pressured to sign right there in the lawyer’s office. You sign it when you’re comfortable and ready.
If you have questions about either the process of hiring the right attorney or want more information about the whole process of bringing a personal injury case please give us a call. We have free downloadable resources available to you to help answer your questions.