Auto accident lawyers who specialize in personal injury cases charge clients who are injured in auto accidents in one of four ways: a contingency fee, a contingency fee with a retainer, an hourly fee, and a flat fee.

Contingency Fee Auto Accident Lawyers

Most automobile accident lawyers charge clients a “contingency fee“, as opposed to an hourly rate for the attorney’s services. If a lawyer accepts a case for payment in the form of a pure contingency fee, the injured person does not pay the lawyer unless the lawyer is successful in winning an award of money damages.

In a contingency fee arrangement, a lawyer pays the expenses for pursuing a client’s claim until the case either settles or there is a final judgment after a trial. If the lawyer is successful in winning either a settlement or a money judgement, then the lawyer gets a percentage of the amount recovered for the client. The lawyer and the client agree on the percentage that the lawyer gets if the lawyer is successful.

Of course, the costs of pursuing the case must be paid out of any money that is recovered before it is divided between the client and the lawyer. Costs include fees for expert witnesses. Expert witnesses might be needed to give opinions about who was at fault in causing the accident or whether a defect in one of the cars involved was a contributing cause. Medical experts might be needed to give opinions about injuries and their treatment.

There are also administrative costs connected with copying documents that have to be given to the other side, obtaining transcripts of depositions or hearings, delivery of documents and records and the like. The court charges a fee to file a complaint and then the complaint must be served on the other party. There might be travel costs as well. It can cost anywhere from $10,000 to $100,000 to pursue a personal injury claim, depending on the circumstances of the case.

If the case fails to settle or the client loses at trial, the injured person will not be obligated to pay any legal fees or costs under a traditional contingency fee agreement. Additional details regarding contingency fee arrangements are as follows:

  • Contingency Fee Percentages – If the case is pursued on a contingency payment plan, the lawyer collects a fee of from 25%-45% of the settlement or judgment amount awarded. The fee varies depending on whether the case settles before trial or ends up in court. Generally, the percentage is less if the case is settled before trial and more if the case must be tried until a jury awards a judgement; in some states contingency fees are limited by state law; for example, in Maryland, contingency fees must be reasonable.
  • Additional Expenses – There are the various costs, identified above, that can be incurred in the course of pursuing a claim. Some lawyers pay these costs out of their own funds and then are reimbursed when money is recovered for the client. Other lawyers may require the client to pay these fees when they become due, in order to continue the representation. Or they may ask a client to pay a retainer or other sum of money in the beginning and use these funds to pay costs as the case proceeds.
  • Advantages and Disadvantages – One advantage is that the client does not have to pay to begin a case; this can be helpful especially if the client is not working because of injuries from the accident; arguably the lawyer has an incentive to work hard for the best settlement or judgment possible. On the other hand, if the attorney settles quickly, some clients might feel that the lawyer did not earn their fee and would have preferred a flat or hourly fee arrangement. It is important to keep in mind, however, that the client must agree to any settlement, the lawyer cannot settle the case without the client’s agreement.

Contingency Fee with a Retainer

Unlike a pure contingency fee, the car accident lawyer may require a payment of money in the beginning of the representation called a “retainer”. The retainer fee will be collected on a contingency basis.

That means that if the client receives money from the case, the retainer will be subtracted from the percentage that the lawyer would take at the end of the representation. So, essentially, the client gets the money back in the end. However, the client will likely not be reimbursed the full amount of the initial retainer amount. One advantage of this kind of arrangement is that the lawyer has money to pay the expenses of pursuing the claim, e.g. hiring expert witnesses.

Hourly Fee and Flat Fee Auto Accident Lawyers

In personal injury accident cases a lawyer might sometimes work on an hourly fee or flat fee basis, although it is not common. Below are the differences:

  • Hourly Fee: Less common than a contingency fee or contingency fee with retainer arrangements, an auto accident lawyer may agree to take a case for an hourly fee. Therefore, the client must pay the attorney for every hour they work, regardless of whether the case is settled or won if it goes to court; usually a lawyer bills monthly for an hourly fee;
  • Flat Fee: Most car accident cases will not involve a flat fee arrangement. In a flat fee situation, a lawyer agrees to perform a specific limited service for a certain sum of money; this type of arrangement is unusual in a car accident case, because the lawyer cannot say in advance how much time they will spend on the case and what their expenses might be. However, a lawyer might agree to perform a specific limited service for a car accident claim for a specified fee. For example, the lawyer might agree only to write a demand letter for payment of damages to the insurance company of the driver at fault. Payment for additional services would then have to be arranged.

Whatever the fee arrangement is between lawyer and client, it should be spelled out in a written agreement and signed by both the lawyer and the client. A person who hires a lawyer for an auto accident case should clearly understand how the lawyer is to be paid and how the costs of the case are to be paid.

Should I hire a lawyer?

Car accident cases can be complex, with difficult questions concerning who caused the accident, and the extent of damage to the vehicles and injury to the people involved. Insurance adjusters will often try to persuade you not to hire a lawyer. Keep in mind that the insurance company wants to settle for the lowest amount possible. It is important to consult an experienced car accident lawyer.

In fact, studies show that if you are injured in a car accident and have a lawyer represent you, you may receive more than three times the amount that a non-represented person receives. If you are involved in an auto accident, it is important to talk to a car accident lawyer as soon as possible and before talking to any insurance adjusters.