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What Percentage Do Lawyers Take For Personal Injury?
What percentage do personal injury attorneys get? Clients ask us this question a lot. Clients also ask: how do I pay a personal injury attorney?
Most personal injury lawyers throughout Michigan (and the rest of the US) take cases on a “contingency fee basis.” We also take personal injury cases on a “contingency fee basis.” A contingency is just a fancy way of saying: “if you win and receive payment, we take a share of it; if you lose and don’t receive payment, we get nothing.”
The standard contingency fee amount in Michigan is one-third (33.3%). That is also the percentage we use too.
The Michigan rules for lawyers set this amount. Most personal-injury lawyers in Michigan follow it. Other states allow different amounts. For example, some states allow the lawyer to charge 40% or 50% depending on if the case goes to trial.
The rule is in the Michigan Rules of Professional Conduct (Rule 1.5) and the Michigan Court Rules (Rule 8.121(A) and (B))
However, there is a little bit of an exception to this rule. The amount is for personal-injury and wrongful-death cases, which means someone was hurt or killed. If your case is a different type of case (for example, fighting over a contract), the contingency amount can change.
Also, the client generally also has to pay for “case costs.” Case costs are things like filing fees, deposition fees, expert-witness fees, etc. This is not money that goes to the lawyer for an attorney fee. The client sometimes pays some or all of these fees.
Other times, the attorney pays some or all of the fees and then gets reimbursed. The attorney would take those costs out of any settlement or money the client receives. Additionally, clients should be aware of expenses incurred during the legal process, which may include court fees, expert witness fees, and other related expenses.
Understanding Contingency Fees
Contingency fees are a common payment structure used by personal injury lawyers. Under this arrangement, the lawyer’s payment is contingent upon winning the case or securing a settlement. This means that if you don’t win your case, you don’t owe any attorney fees. The contingency fee is usually a percentage of the total settlement or court award, which allows clients to pursue their claims without the burden of upfront legal costs. This structure makes legal representation accessible to those who might not afford it otherwise, ensuring that everyone has a fair chance to seek justice.
Contingency Fee Structure
The contingency fee structure typically ranges from 33% to 40% (in some states other than Michigan) of the total settlement or court award. The exact percentage may vary depending on the complexity and stage of the case. For instance, a straightforward case that settles quickly might have a lower fee percentage, while a more complex case that goes to trial could have a higher fee. For example, a 33% contingency fee on a $100,000 settlement would be $33,000, leaving the client with $67,000 before additional case costs are deducted. This structure ensures that the lawyer is motivated to achieve the best possible outcome for their client.
As stated earlier, Michigan personal injury lawyers will charge at most 33% according to the Michgian Rules of Professional Conduct.
Factors Affecting Contingency Fees and Costs
Several factors can affect a lawyer’s contingency fee and the costs for fees for others. Here are some key factors:
- Complexity of the Case: More complex cases that require extensive investigation and expert testimony may have higher contingency fees or costs.
- Stage of the Case: Cases that go to trial often incur higher costs due to the increased time and resources required.
- Lawyers’ Experience and Reputation: Highly experienced and reputable lawyers may charge higher fees due to their proven track record of success.
- Type of Personal Injury Case: Different types of personal injury cases, such as medical malpractice or severe injuries, may have varying fee structures.
- Costs and Expenses: The lawyer’s costs and expenses, such as court filing fees, expert witness fees, and obtaining medical records, can also impact the contingency fee percentage.
Benefits of Contingency Fee Agreements
Contingency fee agreements offer several benefits for clients pursuing personal injury claims. One of the most significant advantages is that clients are not responsible for attorney fees if their case does not end favorably. This arrangement allows clients to pursue their claims without the burden of upfront legal costs, making legal representation accessible to those who might not afford it otherwise. Additionally, contingency fees align the incentives of lawyers with the success of their clients, ensuring that lawyers are motivated to work diligently and achieve the best possible results. This alignment fosters a strong attorney-client relationship focused on winning compensation for the client.
Choosing the Right Personal Injury Lawyer
When selecting a personal injury lawyer, consider the following factors:
- Experience and Reputation: Look for a lawyer with a proven track record of success in personal injury cases.
- Communication Style and Availability: Ensure the lawyer communicates clearly and is available to answer your questions.
- Contingency Fee Percentage and Payment Terms: Ask about the lawyer’s contingency fee percentage and any additional costs you might incur.
- Approach to Handling Cases: Discuss the lawyer’s strategy for managing personal injury cases and their approach to achieving maximum compensation.
- Support Team: Consider the lawyer’s team and support staff, as they play a crucial role in the legal process.
- Licensing: Ensure the lawyer is licensed to practice in your state.
- Online Reviews and Ratings: Check the lawyer’s online reviews and ratings to gauge their reputation and client satisfaction.
By considering these factors, you can choose a personal injury lawyer who is well-equipped to handle your case and help you achieve the best possible outcome.
So let’s see how this works in Michigan personal injury cases.
You get injured in a car crash. You are not responsible for the crash at all. Your fee agreement is the standard 33.3% allowed in Michigan.
Your lawyer files a Complaint to start your case, which costs $250. The lawyer advances the filing fees for you (meaning you don’t pay it right away).
Right after filing the case, the other driver’s car insurance agrees to pay you $100,000 for your injuries.
The lawyer gets 33.3% of the $100,000 final settlement. That equals $33,300 for the attorney fee. $66,700 remains.
The lawyer now subtracts $250 from the remaining $66,700 for reimbursement of the advanced filing fee. Additionally, court costs such as filing fees and other expenses may be deducted, impacting the final amount you receive.
You get the last $66,450.
Obviously, this is just a simple example. The more complex a case is, the more the fees are. But, the process stays the same. Some law firms cover expenses upfront, while others expect clients to pay these costs as they occur.