What is a Contingency Fee in a Personal Injury Case?

Norman Gregory Fernandez, Esq.I have found that there is a general misconception by many people who call me as to what a contingency fee is in a personal injury case.

This article will attempt to take away the misconceptions and explain in plain language what a contingency fee is in relationship to a personal injury case.

In its most simple form, a contingency fee is an attorney fee that is derived by an attorney receiving a percentage of either the gross or net recovery of whatever the lawyer gets for you in your personal injury matter.

Most Personal Injury Lawyers take a percentage of the gross recovery of what they recover for you in a case. The gross amount = the amount of the settlement or judgment that is received for you before deductions for medical bills, cost, and expenses.

I have found that two general misconceptions exist among people who call me: (1) They think that they have to pay a percentage of what is recovered, plus an hourly fee; and (2) They think that it is unfair that a lawyer may get 33% of a case or possibly more depending upon the lawyer and the arrangement.

First off, in the State of California, a contingency fee is NOT FIXED BY LAW. In other words you can and should negotiate the fee with a lawyer in your Personal injury case. I have seen some lawyers charge a fee as high as 45% of what is recovered on a case. I have seen other lawyers go down to 25% of what is recovered on a case. Although the fee is negotiable most attorneys will not go down below a certain level because of many factors. There are enough lawyers out there so that you should be able to call around and get a good fee. Most personal injury lawyers charge 33 and 1/3% of the gross recovery in your case.

There are enough Personal Injury Lawyers in California, that you have a wide range of choices for an attorney. However, keep in mind that not all personal injury lawyers are created equally. If you choose a lawyer that will take your case for 25% and he only gets you let’s say $10,000.00 in your pocket, as opposed to choosing a lawyer that charges 40% but gets you $100,000.00 in your pocket, which one would you go with?

You have to pick a competent lawyer who knows what he is doing and who will take the case to trial if necessary. Watch out for settlement mills. I personally know some lawyers who have NEVER have taken a case to trial. If they cannot settle your case before trial, they will either drop your case or pawn you off. I am a trial lawyer and do take cases to trial. Again, do not be afraid to ask questions.

Let’s address the misconceptions.

Misconception (1): In most personal injury scenarios you only pay a percentage of what is recovered for you by the attorney in a contingency fee personal injury situation; not a percentage plus an hourly fee. If a lawyer tries to charge you both, look around for one that does not charge both. I personally only charge a percentage of what I recover for my clients on their Personal Injury Cases.

Misconception (2): It is unfair for a lawyer to get a percentage of your case; well you have two choices in this regard, you can retain a lawyer to take your case without having to pay any money out of your pocket up front, or you can pay a lawyer his ordinary hourly rate to do your case. By a lawyer taking your case on a contingency basis you are not going to have to come out of pocket for tens of thousands of dollars to get an attorney to take your case, and to continue to represent you. Most people chose to not have to pay out of their pocket up front on a personal injury case, and retain a lawyer on a contingency basis for their personal injury case. It’s better to pay no money up front than to have to pay tens of thousands of dollars. Then again the choice is yours.

With regard to misconception (2), if I were to charge my ordinary hourly rate in a typical personal injury case, the attorney’s fees could go as high as $100,000.00 or more if the case goes to trial. It would be stupid not to retain a lawyer on a contingency basis, especially for a small personal injury case, especially when there is no guarantee of any recovery on your part.

NO PERSONAL INJURY LAWYER CAN ETHICALLY GURAENTEE THE OUTCOME OF YOUR PERSONAL INJURY CASE! If you find one that says he can guarantee results, ask him what the upcoming winning lottery numbers are going to be, and then run out the door and go buy a lottery ticket. If you win the lottery than I would retain that guy!

In all seriousness you will find shysters that guarantee results just to get you to retain them. No lawyer knows ahead of time what a jury is going to do in any case, but we usually have a pretty good feel as to whether you have a good case. That is why we are willing to take your case on contingency with no money being paid by you up front!

If you do find a shyster that makes guarantees as to the outcome of your case, call them on it; ask them to put in writing! Then if they don’t provide the guaranteed results they put in writing, sue them for breach of contract! In all seriousness when you are injured you are not going to want to play games. I am telling you here and now, no ethical Personal Injury lawyer will guarantee results because we do not know what the ultimate outcome of your case will be.

As for me I do everything that I possibly can to get you the most money possible in your personal injury case because my fee is directly proportional to what I get you in your case! It’s a win-win situation. You will want a hard fighting aggressive lawyer who will fight for you!

I hope this article was helpful in explaining what a contingency fee is. If you have a personal injury matter in the State of California you can call me for a free consultation on your case at 818-584-8831 extension 1, or check out my personal injury website by clicking here.

By Norman Gregory Fernandez, Esq. , Copyright 2006

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5 Responses to What is a Contingency Fee in a Personal Injury Case?
  1. Bob
    March 31, 2007 | 5:00 pm

    I read this article today. I don’t really know why, but Personal Injury was clicked by the mouse. In your article, towards the last you wrote, Misconception 2. I am curious, is it wrong when one hands a lawyer $250.00 for a consultation,long distances calls speak with you, then the appointment is made to call back to speak to Mr. So & So. You pay out of our pocket to the investigator $2,500 and you get a witness and people who were aware. Corrobrating evidence follows. A inspector from BPR is proof positive on a cell phone recorded message. Things look really good and all the sudden, you are asked for a payment of $10,000 to file and start the ball running and costs on a case like this can run $65,000. Now, we remember the day the $250.00 consultation fee was paid, one was given big hope, told a case to pursue and then be required to sign many papers agreeing to a contingency fee upon recovery of money. What does one do when this same lawyer has been referred to them as being the best in the State of Florida for whistle-blowing and wrongful termination???? These attorneys are not listed in the yellow page directory..

  2. bob jones
    August 3, 2007 | 1:05 am

    On the Quote below. I agree with the math but what he fails to mention is… Very few if any lawyers will talk about money before you sign. That example is just trickery. This is an attempt to make on think that 33% means you will get more money because that attorney will get more money that the 25% guy. The only way to prove this would be to go to trial with attorney A get the settlement then take a time machine and do the same case with a different attourney. I wish I had a time machine because this is the problem I am having in selecting a lawyer. They all get very hazy when it comes to the amount of money the case could be worth. They usually say it will become clear (After you sign the contract) well then its too late. I would like to know at least a ball park figure before I sign. Saying they can’t do this is a form of lying. They must have an idea or they would not want to take the case to begin with. I can’t get in ones head but I would assume the process is something like this:
    1) is the case winnable? if Yes 2) how much can I hope to win then do the math 1/3 for my take. 4. If potential client asks me my thoughts my reply is the standard “Its very difficult to say, do some standard evasion answers and change the subject but leave them knowing that if they sign I will be able to answer that one with more time.

    I know this to be true because I am interviewing lawyers right now. I plan to do about 20 then choose the ones that seems to be the most competent and client-honest. They really can’t expect unearned trust, not being able to give a ballpark range of expected outcomes (In a win) tells me they are either too inexperienced or lying to me either way
    they are off the list for me.

    “keep in mind that not all personal injury lawyers are created equally. If you choose a lawyer that will take your case for 25% and he only gets you letÂ’s say $10,000.00 in your pocket, as opposed to choosing a lawyer that charges 40% but gets you $100,000.00 in your pocket, which one would you go with?

  3. Norman Gregory Fernandez
    March 31, 2007 | 6:28 pm

    I cannot comment on this specific situation other than to say that if the lawyer agreed to take the case on a contingency basis and then turned around requested an hourly fee; I would be concerned!

    I myself do not charge money for an initial consultation.

    I do not have enough facts or information to comment in this situation.

    Norm

  4. Norman Gregory Fernandez
    August 3, 2007 | 1:59 am

    The bottom line Bob is that we can give a ball park figure based on experience, however, a lawyer would be stupid for doing so. The first thing they teach us in law school is not to make guarantees, because we have no real way of knowing what a certain case may settle for, or what a judgment in the case may be. It would be unethical to predict the future!

    If we give you a ball park and you don’t get the ball park for whatever reason, then you will complain that we told you that you would get so much, etc. It is a no win for any lawyer to predict the future because we cannot.

    A form of trickery and lying would be to give you a ball park on a case. There are too many things that can happen in a case to screw it up, including the actual client themselves.

    Hell if I could predict the future I would win the lottery every time and I would not be practicing law.

    We lawyers are not clairvoyant. In my case I expect cases to settle in a certain range based upon many factors. However, each case is different and no two are the same. When you put a case up in front of a jury all bets are off and anything is possible!

    Good luck in your search for a lawyer.

    Norm

  5. Tob
    December 23, 2010 | 10:31 am

    In short, a contingency fee is a fee that is payable only if the outcome is successful. For example, a lawyer gets a percentage of the money if the client wins the case.

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