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How do Personal Injury Lawyers Get Paid: the Contingent Fee Explained

Houston Personal Injury Lawyer | What is a Contingency Fee

Why It’s Important to Hire an Experienced Personal Injury Lawyer After an Accident

When someone is injured or tragically killed as a result of someone else’s negligence, they and their family may be able to recover substantial damages through a personal injury lawsuit.

But insurance companies are known for lowballing accident victims who aren’t represented by lawyers, so hiring our Experienced Houston Personal Injury Lawyers and filing a lawsuit is often the only way injured parties can hold those responsible accountable and ensure they’re fully compensated for all of their injuries and losses.

The Contingency Fee: How Personal Injury Lawyers Are Paid

Many accident victims mistakenly believe they can’t afford to hire a personal injury attorney, especially if they’re already experiencing financial strain from mounting medical bills and lost wages.

Fortunately, most—if not all—personal injury lawyers, including ours, work on a contingency fee, meaning they only get paid if they win the case and their client recovers financial damages.

The contingency fee levels the field between accident victims and large companies by enabling accident victims to hire highly qualified and experienced personal injury lawyers without having to paying anything out of pocket.

What is a Contingency Fee?

When you hire a personal injury attorney on a contingency fee, the lawyer covers all costs and expenses associated with the case while it’s pending. If the case is successful and you recover damages through a settlement or verdict, the expenses and your attorney’s fees are deducted from the total recovery.

If, however, the case is not successful, your lawyer bears the costs and expenses, and you walk away without owing your lawyer a penny.

Hiring an Experienced Personal Injury Lawyer Often Substantially Increases Your Total Recovery

Typically, the more experienced personal injury lawyers – those who have a history of recovering substantial verdicts and settlements for their clients – charge a higher contingency fee than less experienced lawyers.  Their fees will typically range between 40% and 45% of the total recovery, depending on the complexity of the case and when, during the lawsuit, the case is settled or resolved.

What many accident victims don’t realize, however, is that working with an experienced personal injury lawyer often substantially increases their total recovery, which means that they end up walking away with more money than they would have if they had hired a less experienced lawyer with a 33% or 35% contingency fee .

Not only will the more experienced personal injury lawyer be taken more seriously by the defendant, but they often have the resources and skills to take your case to trial in the event that the defendant refuses to offer a settlement that fully compensates you for your injuries and damages.

The threat of trial makes a tremendous difference to defendants and insurance companies during settlement negotiations, because they know that if they don’t offer enough money to settle your case before trial, they could face a much larger payout if the jury finds against them at trial.

Since personal injury attorneys with track records of significant verdicts and settlements tend to recover more money, their clients typically walk away with significantly more in their pocket than had they hired a less experienced attorney who, for example, only charged a 33% or 35% fee.

The Sliding Scale Contingency Fee

Some personal injury law firms offer “sliding scale” contingency fee arrangements, in which the fee increases with the amount of work and time that’s invested in the case.

Under this type of arrangement, the fee is lower  — around 33% to 35% —  if the case is settled for an amount of money that fully compensates the accident victim for their injuries and damages BEFORE a lawsuit is filed.

When the Lawsuit is Filed

Unfortunately, some defendants won’t offer a fair settlement in the early stages of a case, especially before a lawsuit is filed.

If negotiations fail because the defendants refuse to offer a settlement that fully compensates the victim, then the victim’s personal injury attorney will have to file a lawsuit.

Once a lawsuit is filed, the insurance company will hire its own attorney – usually a team of lawyers – to represent them and try to limit the total damages they have to pay to the victim.

It’s at this point that the experienced personal injury lawyer will start obtaining all the evidence they need to:

(1) prove that the defendant caused the accident, and

(2) establish the nature and extent of their client’s injuries

After obtaining evidence through written discovery and depositions, the personal injury lawyer will start hiring doctors, engineers, safety consultants and other experts to demonstrate and explain how the accident occurred, why it should have been prevented, and how much money is needed to compensate the victim for their injuries and financial losses (i.e., medical expenses and lost wages).

The contingency fee will typically increase with the filing of the lawsuit to compensate the injured party’s lawyer for the additional time and effort needed to obtain a larger settlement and prepare the case for trial.

In most cases, settlement negotiations will continue even as the parties prepare for trial.

Also, because the injured parties’ lawyer has obtained evidence that proves that the defendant was at fault and establishes the nature and extent of the injured party’s damages, filing a lawsuit frequently results in a much larger settlement.

When Settlement Negotiations Fail and the Case Goes to Trial

While many personal injury cases settle before trial, some defendants and insurance companies refuse to offer a settlement that’s acceptable to the victim and fully compensates them for all of their economic and non-economic damages (i.e., pain and suffering, mental anguish, physical impairment, emotional distress, etc).

At that point, the case will proceed to trial, either before a jury (jury trial) or a judge (a bench trial).

Going to trial requires a significant time commitment by the injured party’s lawyer and their law firm, but assuming they’ve hired an experienced trial lawyer, it can also result in a substantially larger recovery.

Undefeated Personal Injury Lawyers with Billions Won for Our Clients: Call 1-888-603-3636 or Click Here for a Free Consult

In addition to being Undefeated, our Personal Injury Lawyers have recovered over $1 Billion and consistently won the largest verdicts and settlements in history for accident victims and their families across Texas, Louisiana, New Mexico and the United States.

If you or a loved one were injured or tragically killed as a result of someone else’s negligent or reckless conduct, our Experienced Personal Injury Lawyers will hold the responsible parties accountable and help you and your family recover the maximum compensation possible for your injuries and losses.

All consultations are free, and because we only represent clients on a contingency-fee basis, you won’t pay us anything unless we win your case.

Our lawyers will answer your questions, explain your rights, and make sure you have the information you need to do what’s best for you and your family.

Call 1-888-603-3636, use the “Chat Now” feature on our website, or click here to fill out our confidential contact form.