Contingency Fees: What Are They And How Do They Work?

You hear it all the time from injury attorneys. ‘No fee guarantee’ or ‘We don’t get paid unless you win’. But what does it all actually mean? How are personal injury attorneys paid?  The answer comes from the name itself, a contingency fee. A Personal Injury attorney’s payment is contingent on a client’s financial recovery for their injuries.

Defining contingency fees

Contingency fee agreements are typically used in cases where a victim is seeking monetary damages because of an injury. There is an agreement called the contingency fee agreement, which allows an individual to obtain legal representation without having to pay upfront.  Instead of having to pay upfront, the client will agree to pay the attorney a percentage of what is secured should they win the case. The contingency fee agreement will include any circumstances of payment and the amount of money the attorney will collect at the end of the case.

The concept of having a contingency fee agreement is that the plaintiff will not have upfront expenses. This should help relieve some of the stress that comes along with being the victim of a personal injury. The client will not pay any legal fees unless and until they win and their attorney will receive a percentage of the recovery based upon their fee. There will be no legal fee for the attorney if you do not win the case.

How is a contingency fee determined?

There will be a consideration for both the client and the attorney to determine a proper fee amount. Depending on if your attorney has to file a lawsuit and go to trial, his or her agreement may have a higher percentage because more effort is required for litigation. If it is not necessary to file a lawsuit, but instead your lawsuit is resolved through mediation, the contingency agreement may provide for a similar percentage. If there is a doubt whether the fee arrangement is consistent with the client’s best interest, the attorney should discuss and explain the bases of the fees.

Get your contingency fee agreement in writing

Contingency fee agreements should be in writing to reduce the possibility of a misunderstanding. The agreement must also specifically state the method used for determining the fee. For example, if the fee will differ depending on the outcome, such as the case settling or having to go to trial, the exact percentage the attorney receives for each different outcome must be clear.

A contingency fee agreement must also include:

Your Financial Recovery

Once the contingency fee agreement is set, the attorney will pay any necessary expenses.  Such expenses may include paying filing fees, arranging for payment of depositions and mediations, and paying for copies of medical records. If your attorney obtains a judgment or settlement on your behalf, the written contingency contract will determine how your funds are dispersed.

You may be wondering, will the expenses be deducted before or after calculation of the contingency fee? The attorney must give the client a written statement that describes the result. If the client will be awarded a recovery, the agreement must “show remittance to the client” and the method used to determine it.

How The Carlson Law Firm can help

If you are the victim of a personal injury, we are ready to invest in your case. The team at The Carlson Law Firm has over 40 years of experience protecting the rights of injured victims. We have a team of attorneys, on staff nurses, and private investigators ready to assist you. Contact us today for a free consultation. We care, we can help.


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