Contingency Fee Agreements in Personal Injury Cases

If you’ve been seriously injured in an accident due to someone else’s negligence, life may seem pretty unfair right now. You’re too hurt to work. Bills are piling up. Adjusters, collectors, and doctors keep calling. You have no idea how you’re going to get back on your feet – physically or financially.

You would like legal help but have no way to pay for a personal injury lawyer – and no one to turn to for assistance.

Fortunately, there is light at the end of the tunnel. Many personal injury attorneys – including the ones at Varghese Summersett Injury Law Group – work on a contingency fee basis, which means you don’t pay anything upfront. You only pay if – and when – the attorney wins or settles your case.

In this article, our attorneys explain contingency fees, the benefits of hiring an attorney who works on a contingency fee basis, and why you won’t owe us a penny unless we win.

What is a Contingency Fee?

A contingency fee is a type of payment arrangement between an injured party and their lawyer, in which the lawyer only collects payment if they successfully settle or win the case on behalf of their client.

Contingency fees are common in personal injury cases because they allow clients who are struggling financially the ability to hire an experienced attorney. Personal injury attorneys who work on a contingency fee basis take on the financial risk of the case and only get paid if they are successful in recovering compensation for their client.

Their fee is a predetermined percentage of the amount that the client is awarded. For example, if a client is awarded $100,000, and the contingency fee is 33 percent, then the lawyer would receive $33,000.

How are Contingency Fees Determined?

Contingency fees are determined at the time of the contingency fee agreement contract. The percentage is usually 33 to 40 percent of the settlement or the award at trial. The percentage may vary depending on the complexity of the case and the extent of work and expertise of the attorney.

Under Section 1.04 of the Texas Disciplinary Rules of Professional Conduct, the contingency fee percentage and agreement must be determined before representation begins and be in writing.

How Do Contingency Fees Benefit Clients?

There are several key advantages:

No Upfront Cost: This is a huge relief for many clients. Personal injury cases often come during difficult times – maybe after a car accident or a workplace injury. The last thing you want to worry about is how to afford a lawyer. With a contingency fee, there’s no financial barrier to seeking legal help.
Risk-Sharing: The lawyer takes on significant risk because if the case is lost, they don’t get paid. This aligns the lawyer’s interests with yours – they are motivated to win or secure the best possible settlement.
Accessibility: It democratizes access to legal services. Even if you don’t have the means to pay a lawyer hourly, you can still seek justice and compensation.
Encourages Efficiency: Lawyers working on contingency are incentivized to resolve cases efficiently and effectively. They’re more likely to take on cases they believe they can win, and to work diligently towards a successful outcome.
Peace of Mind: Knowing your lawyer’s payment depends on the outcome can provide reassurance. It assures that your lawyer believes in your case and will work hard on your behalf.

How Do Non-Contingency Lawyers Get Paid?

As you might imagine, not all lawyers work on a contingency fee basis. Some lawyers charge an hourly rate, which means that the client pays for every hour that the lawyer works on their case.

For example, if the lawyer’s rate is $250 an hour and they spend a total of 20 hours on your case during a month, the monthly fee would be $5,000. This is a common type of payment arrangement for divorce or family lawyers.

Other lawyers may charge a flat fee, or a retainer, which means that the client pays a set amount for the entire case. This type of payment arrangement is common for criminal defense lawyers. For example, if you have been charged with a DWI, an experienced DWI lawyer might charge you $5,000 to resolve your case.

These are, of course, hypothetical examples. Every attorney and every law firm is different when it comes to their fees.

Having said that, when it comes to personal injury cases, hourly rates and flat fees are less common because they can be prohibitively expensive for clients. If a personal injury lawyer charges an hourly rate, the client may end up owing thousands of dollars in legal fees, even if they don’t win their case. A contingency fee, on the other hand, ensures that the client doesn’t pay anything unless there attorney is successful.

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Why Should You Insist on a Contingency Fee Lawyer?

There are several benefits to working with a personal injury lawyer who works on a contingency fee basis:

No up-front costs: With a contingency fee lawyer, you don’t have to pay anything upfront. This means that you can hire an attorney to represent you even if you don’t have the financial means to pay for legal fees.

No risk: If you don’t win your case, you don’t owe the lawyer anything. This means that you can pursue your case without worrying about how much it will cost you.

Motivated lawyer: Because the lawyer only gets paid if they win your case, they are motivated to work hard to recover as much compensation as possible for you.

Expertise: Personal injury lawyers who work on a contingency fee basis are often highly experienced in handling personal injury cases, and have a strong track record of success. They are not going to assume all the risk unless they are confident in their ability to win the case.

What is an Example of a Contingency Fee Agreement?

Here is a hypothetical example of a contingency fee agreement for a personal injury case:

Amy was driving home from law school one evening when she was struck by a motorist who ran a stop sign while texting and driving. Amy suffered a broken leg, arm, as well as a concussion. Due to her injuries, Amy had to take a semester off of law school and also could not work her part-time job as a waitress. She fell into a deep depression for which she received mental health treatment.

Amy, who was drowning in hospital, school, and utility bills, contacted an experienced personal injury for help. They entered into a contingency fee contract in which the attorney was to receive 33 percent of the amount recovered in the case. As part of the agreement, the attorney agreed to pay all expenses related to the case and that the expenses will be deducted from the amount recovered before the contingency fee is calculated. It also ensured that the client doesn’t owe the attorney anything if they don’t win their case.

In the end, the settlement offer was $200,000 and the contingency fee was calculated to be $66,000. After the expenses were taken out of the settlement amount, Amy received a net recovery of over $140,000. Amy never paid a penny up front or out of pocket.

What Types of Cases May Have Contingency Fee Arrangements?

Contingency fee agreements are most commonly used in personal injury cases, such as:

These types of cases typically involve injuries caused by someone else’s negligence or wrongdoing.

What Types of Expenses Are Incurred in Personal Injury Cases?

The fees that contingency fee agreements cover vary, but they generally cover the costs of pursuing the case until the conclusion, including:

Attorney fees: The contingency fee that the lawyer receives if they win the case.

Case expenses: This includes expenses like court filing fees, expert witness fees, and the cost of obtaining medical and police records, as well as creating and preparing trial exhibits.

Investigative costs: This includes the cost of investigating the accident, including hiring private investigators or accident reconstruction experts.

Administrative costs: This includes the cost of postage, copying, and document organization.

At Varghese Summersett Injury Law Group, we understand that when you are facing an uncertain financial future due to an injury, the last thing you want to do is worry about affording an attorney. That’s why we front the cost of all the legal fees and litigation expenses. You have enough on your plate, we will not compound your issues. We are here to help.

Contact Varghese Summersett Injury Law Group.

If you’ve been injured in an accident due to another party or entity’s negligence, hiring a personal injury lawyer who works on a contingency fee basis can be an excellent option. This means you don’t have to worry about paying anything upfront or out-of-pocket.

In fact, at Varghese Summerett Injury Law Group, you will never be asked to open your pocketbook. We offer free consultations and, if you hire us, you’ll never receive an invoice. If we win your case, a percentage of the settlement/award will pay for our legal fees and expenses. That’s it – no hidden costs or agenda.

We understand how difficult it can be to recover from a personal injury. That’s why we work on a contingency fee basis. We want our clients to focus on their recovery while we handle their legal case. If you have been injured in an accident, call us at (817) 207-4878 (HURT) and speak to an experienced personal injury lawyer today.

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