Everything you need to know about contingency fees

  • Contingency fees allow lawyers to work on your case with no up-front costs.
  • Your lawyer only gets paid when you get paid.
  • Contingency fees often motivate attorneys to help you get the most money possible.

What is a contingency fee?

Like most personal injury lawyers, we work on what’s called a contingency fee basis.  Whether we get paid any fee is contingent upon us winning your case or obtaining a settlement for you.  If we fail to recover money for you, we get paid nothing.  Additionally, we also pay all of the legal costs of your case, like court filing fees, the cost of hiring experts for your case, etc.  The financial risk is on us.  In return for taking that risk, we obtain a percentage of any money we recover for you, plus reimbursement for the expenses that we paid. There may also be expenses that have to be deducted from the settlement and paid to others, such as medical bills for your treatment.

An Example of a Contingency Fee in Action

The chart below illustrates how a settlement of $10,000 dollars would be distributed to a client, to our firm, and to the doctors that treated the client.  The example below uses a 33% fee for the law firm, which is common.

Sample Contingency Settlement
Total Settlement Amount $10,000.00
Case Expenses Repaid to Attorney $500.00
Attorney Fees (33% of Settlement) $3,300.00
Amount Attorney Receives $3,800.00
Remaining Amount of Settlement $6,200.00
Medical Expenses Repaid $1,000.00
Amount Client Receives $5,200.00
Note: This is a Fictional Settlement

The injured client receives in this case $5,200 dollars, the law firm receives $3,300 in fees for representation, and the law firm also receives $500 dollars to reimburse it for expenses it paid on the client’s behalf.  Additionally, the doctors that treated the personal injury client are paid $1,000 dollars to settle the client’s bills.

Contingency Fees Make Us Work Hard to Get You as Much Money as Possible

This is a fictional settlement using round numbers to easily illustrate how a contingency fee works, but the principals will remain the same no matter what the dollar amounts are.  As you can tell, the larger the total amount of the settlement or jury award, the larger the amount of the fee that our law firm receives will be.  We therefore have every reason to try and get you the largest settlement we possibly can.  Also, because we only get paid when you get paid, we have every reason to try to settle your case as quickly and effectively as possible.

We Never Drag a Case Out

It’s a common misconception that personal injury lawyers like us “drag things out” to try and earn more money.  It simply does not work that way.  We try and resolve every personal injury case for the highest amount of money we can as quickly as we can.  That’s what is so great about the contingency fee system – it makes sure an personal injury client and a personal injury lawyer have the same goal.

Who Determines When to Settle and For How Much Money?

Our law firm never makes the decision whether to settle a client’s injury case.  We can make a recommendation to the client as to whether a settlement is fair, but it’s up to the client to decide whether or not to accept the offer.  Sometimes a client needs money quickly and wants to settle a case for less money than it is worth.  We advise against this, but if that’s what the client wants, it’s what we do because we work for the client.

Other times, the client wants a settlement that is not fair or otherwise is not likely to happen.  In those cases, we advise the client that going forward with a lawsuit can add additional time and expenses to the case.  We also advise that there is always the potential that the client will lose the lawsuit and end up with nothing.  Once the client is properly advised, we either move forward and take our chances, or we accept a settlement if the client changes his or her mind.

Personal injury attorneys are not allowed to settle a case without a client’s permission, so we never ever do that. (And neither will any other personal injury lawyer who doesn’t want to be disbarred.)

Not Everyone Likes Contingency Fees

It has been said that contingency fees are the “key to the courthouse door” because they allow anyone to hire an attorney – especially those who cannot afford to pay an attorney by the hour.  Without contingency fees, few people could afford to hire personal injury lawyers, especially for complex cases that can take years.  There are some people and companies who would prefer to keep the courthouse door closed and locked to people of average or limited means.

Not surprisingly, those are the people and companies who tend to get sued a lot in personal injury cases.  You may have heard of a movement called “tort reform.”  Personal injury cases are a type of tort, and the people behind the “reform” movement want to (among other things) get rid of or limit contingency fees.    What would happen if they succeed?

The Tort Trial and Insurance Practice Section of the American Bar Association studied that question and came to a clear answer:

“Elimination of, or significant constraints on, contingent fees would make legal assistance available only to those injured persons who are wealthy.  The poor, the retired, African Americans, and women especially will suffer because they are often unable to afford hourly fees.” [1]

$200 per hour is a low hourly fee for an attorney these days.  Few people can afford to pay that rate, and contingency fees ensure that injured people don’t have to.

Our Immigration Services Are Not Handled on a Contingency Fee, But They Are Very Reasonable and We Take Payments

Because there is no settlement in an immigration case, we cannot handle those cases on a contingency-fee basis.  We strive to set very reasonable fees in our immigration cases, and we offer payment plans.  Our typical immigration fee is a flat fee, meaning it is a one-time charge that you’ll know of in advance.  There will be no surprises.

Although we can’t offer immigration services alone on a contingency fee, we can offer to handle your immigration case by taking our payment out of a settlement in a personal injury case we are handling.  The table below is the same table as in the example above, but also allows our firm to deduct $2,000.00 from the personal injury settlement to handle an immigration matter.

Sample Contingency Settlement
Total Settlement Amount $10,000.00
Case Expenses Repaid to Attorney $500.00
Attorney Fees (33% of Settlement) $3,300.00
Fees For Immigration Services $2,000.00
Amount Attorney Receives $5,800.00
Remaining Amount of Settlement $4,200.00
Medical Expenses Repaid $1,000.00
Amount Client Receives $3,200.00
Note: This is a Fictional Settlement

Again, the fees and numbers in the table above are all fictional.  Some immigration services are less than $2,000.00, and others are more.  Every immigration situation is different, so the best choice is for you to call and speak with immigration attorney Diego Rodriguez to see how we can help.  But if you may also have a personal injury case for us to handle, don’t forget to tell Diego.  Your settlement may be able to pay for your immigration case.

[1] Steven Garber et al., Do Noneconomic Damages Caps and Attorney Fee Limits Reduce Access to Justice for Victims of Medical Negligence?, 6 J. Empirical Legal Stud. 637 (2009).