How Do Personal Injury Lawyers Get Paid?
If you were injured in a car accident, truck accident, or other personal injury incident, you may wonder whether you can afford to hire an attorney. Personal injury attorneys provide valuable services to injured accident victims. They investigate the case, gather evidence, file claims, and negotiate for fair compensation. But how do they get paid?
Different Attorney Fee Arrangements
Lawyers can charge for their services in different ways.
The most common fee arrangements include:
- Hourly rates – The most common way for lawyers to charge for their services is hourly. They multiply their hourly rate by the number of hours they worked and bill the client for the work.
- Flat fees – Flat fees are more common in certain situations where lawyers have a good idea about the amount of time that it may take to complete routine legal work, like with contracts, no-contest divorces, or estate planning. Attorneys who receive a flat fee charge the same amount for their services regardless of how many hours they work.
- Contingency fees – Contingent fee arrangements condition the attorney’s fee based on the outcome of the case. If the attorney wins the case and secures compensation, they receive a percentage of the proceeds.
- Retainer – Some lawyers request a retainer to be paid before they start work on a case. This retainer serves as a down payment. The lawyer deducts their fee out of the retainer until it is used up and then charges another way for their services, such as an hourly rate.
- Hybrid – Some attorneys use a combination of some of the fee arrangements.
Personal injury lawyers typically charge contingency fees.
How Contingency Fee Agreements Work
Under a contingency fee arrangement, accident victims are not responsible for paying attorney fees upfront. Payment for their services is conditioned on the outcome of the case. If the personal injury lawyer secures compensation through an insurance settlement or court award, they receive a percentage of the compensation when the client receives their check. If the attorney is unable to secure compensation, they are not paid for their services.
Amount of Contingency Fees
The amount of contingency fees can vary. A typical rate is one-third. However, attorneys can charge different amounts. Some personal injury attorneys charge a different amount if the case involves litigation.
In New Jersey, the lawyer’s fee must be reasonable.
Factors that can affect the reasonableness of a lawyer’s fee include:
- The time and labor required for the case
- The novelty and difficulty of the case
- The skill required to perform legal services properly
- The fee other attorneys charge in the area for similar legal services
- The amount involved in the case and the results obtained
- The experience and reputation of the lawyer
- The likelihood that taking the case will prevent the lawyer from taking other cases
If you have questions about a lawyer’s contingency fee rates, you can ask for clarification before hiring them.
New Jersey Rules Regarding Fee Arrangements
In addition to the fee being reasonable, New Jersey ethical rules mandate that contingency fee agreements meet the following requirements:
- Be in writing
- State the method by which the fee is to be determined
- Include the percentage or percentages that apply in the event of a settlement, trial, or appeal
- State the litigation expenses and other expenses the client will be responsible for paying and whether these expenses are deducted before or after the contingent fee is calculated
After the case is concluded, the attorney must provide the client with a written statement that shows how fees are calculated.
Legal Costs Vs. Fees
There is an important distinction between legal costs and fees. Attorney fees are charges for the lawyer’s time. However, there are other expenses that you may be responsible for paying, known as legal costs.
Legal costs can vary by case but may include:
- Costs to obtain accident and police reports
- Costs to get copies of your medical records and police reports
- Medical record retrieval fees
- Court costs, including filing fees and deposition costs
- Research service fees
- Postage fees
- Travel costs
Your attorney may pay these costs out of pocket, but you may be responsible for reimbursing them when you receive your settlement check. Some attorneys charge these costs to their clients as they accrue. Ask for clarification about how these costs are handled when you call for your free case review.
Contact Noonan & McMahon, LLC Today
For more information, please contact the lawyers at Noonan & McMahon, LLC to schedule a free consultation with a personal injury lawyer. We have a convenient office location in Freehold, NJ. We proudly serve all throughout Monmouth County and New Jersey.
Noonan & McMahon, LLC – Freehold Office
35 Court St 1A, Freehold, NJ 07728
(732) 631 3387