How Lawyers Charge for Personal Injury Cases and What Costs to Expect

Personal injury cases are some of the most complex legal matters that can arise in everyday life. When you or a loved one faces such a situation, it's crucial to understand how the legal process works, including the financial aspects of hiring a lawyer. In this guide, we'll explore the typical ways in which lawyers charge for personal injury cases in the United States, along with the associated costs you should be aware of.

Contingency Fees: The Standard

In the United States, personal injury cases are generally handled on a contingency fee basis. This means that the lawyer will take a certain percentage of the recovery amount, but you don't pay anything unless there is a favorable settlement or judgment. The standard range for contingency fees in personal injury cases is between 25% to 40%, net of expenses. Some lawyers might take a cut from the gross amount and then subtract expenses.

Example Calculation

Let's break down an example to better understand how this works. Suppose you have a contingency fee of 33% and receive a settlement of $100,000. Your lawyer pays an expert witness $8,000 for her work and incurs $2,000 in other expenses like filing and court reporter fees.

Net of Expenses Calculation

Your ultimate take-home would be $60,000 if the lawyer takes their contingency fee net of expenses:

$100,000 - [(100,000 x .33) - (8,000 2,000)] $60,667

This calculation would be:

$100,000 - (33,000 - 10,000) $60,667

Gross Amount Calculation

If the fee is taken off the gross amount, the calculation would be:

$100,000 - (100,000 x .33) - 10,000 $56,667

As you can see, the net-of-expenses method can provide a slightly higher take-home amount for the client.

Common Variations

Lawyers sometimes use "blended" contingency fees, where the client is expected to pay for certain costs such as filing fees, court reporter fees, and expert witness expenses as they are incurred. This is more common with business clients, as injured individuals often don't have extra funds available. However, both parties should be clear on the specific terms and agree on the division of costs and percentages.

Understanding Legal Costs

It's important to note that when a lawyer discusses "fees," they are referring to what they and their staff are charging for their time. "Costs," on the other hand, refer to any other expenses associated with the case. Here are some of the typical costs that may arise:

Attorney Fees

As mentioned earlier, attorney fees are usually a percentage of the recovery amount, typically between 30% to 40%, but they can vary. These fees are only incurred if the case is successful.

Expenses

Expenses can include a variety of items, such as:

Filing costs to start the lawsuit Expert witness costs to establish the nature and gravity of your injuries Investigator costs to gather evidence on one or more issues Deposition and trial preparation costs

It's important to understand that in most jurisdictions, lawyers cannot absorb or advance these costs to their clients. Therefore, costs typically come out of the client's pocket or the client needs to arrange some other form of financing outside of the law firm.

Scenario Example

For instance, an expert witness might be initially involved to give initial impressions of the case. If the case doesn't settle, they might write an "expert report" and be deposed for a full day, which the client will have to pay for. They may also need to be prepared to be deposed by the lawyer, for which the client will pay the preparation time.

Conclusion

Clients often feel overwhelmed by the complexities of legal fees in personal injury cases. By understanding the standard contingency fee arrangements and the various costs involved, you can make more informed decisions about how to proceed. It's crucial to communicate openly with your lawyer about the fees and expenses, and ensure that you fully understand the financial implications of your case.