Many accident victims share a common concern: they cannot afford to hire a personal injury attorney upfront. They might realize they need an attorney working on their case, but they believe hiring a personal injury lawyer is beyond their abilities.
The good news is that most personal injury lawyers accept cases based on contingency fees. A contingency fee agreement means that you do not pay any money for legal services unless your attorney recovers compensation for your claim. As a result, you can afford to obtain legal advice and hire a lawyer to handle your car accident or other personal injury cases.
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How Do Personal Injury Lawyers Charge for Their Services?
A lawyer charges for legal services based on an hourly rate, fixed-rate, or contingency fee.
Hourly Rate
Hourly rates bill a set fee for the lawyer’s actual time working on the client’s case. The attorney tracks the time spent on the case, generates an itemized statement, and bills the client periodically throughout the case.
Some attorneys may require a retainer fee they hold in trust. They bill against the retainer fee until the money is exhausted. Then they bill the client each month for the time spent on their account.
Hourly fees must be reasonable. The Florida Rules of Professional Conduct outline several factors used to determine if an attorney’s hourly rate is reasonable.
Hourly fees are standard in criminal and family court cases. Contingency fees are far more common in personal injury cases.
Fixed-Rate
A fixed-rate payment is simple to explain. You and your attorney will agree on a fixed, lump-sum fee for their legal services. An example where this payment system is prominent is when a lawyer agrees to write a will for a client.
Contingency Fee Agreements for Personal Injury Lawyers Explained
What is a contingency fee agreement?
A contingency fee agreement means you pay no attorney’s fees upfront. Your lawyer only gets paid if your case results in a settlement or jury award. If there is no recovery, you generally do not owe attorney’s fees.
Why do personal injury lawyers use contingency fees?
Contingency fees allow injury victims to hire experienced legal counsel without worrying about hourly rates or retainers—especially important when medical bills and lost income are already creating financial strain.
How does a contingency fee benefit my case?
Because your attorney’s fee depends on the outcome, their interests are aligned with yours. Your lawyer is motivated to pursue the maximum compensation available while minimizing your financial risk.
How are contingency fees calculated?
The attorney’s fee is a percentage of the settlement or jury award, agreed upon before signing the contract. In most cases, the fee is calculated based on the gross recovery amount.
Are there additional costs involved?
Yes. Personal injury cases often include case-related costs such as deposition expenses, court filing fees, expert witness fees, medical records, accident reports, and trial preparation. Most firms advance these costs and are reimbursed from the settlement.
Am I responsible for costs if my case is unsuccessful?
his depends on the firm’s agreement. You should always ask whether you may be responsible for costs if no recovery is obtained.
Will medical bills or liens be deducted from my settlement?
Yes. Medical bills, health insurance subrogation claims, and medical liens are typically paid from the settlement before you receive your portion.
What should I confirm before signing a contingency fee agreement?
Make sure you understand how the fee is calculated—specifically whether it is applied before or after costs, expenses, and liens are deducted.
Are There Guidelines or Rules for Contingency Fee Agreements in Personal Injury Cases?
All contingency fee agreements in Florida must comply with The Florida Rules of Professional Conduct. Requirements for contingency fee agreements include:
- The agreement must be in writing
- It must state the specific fee percentages charged by the lawyer
- The client may negotiate the rate or percentage of the fee
- The agreement must acknowledge the client reviewed the Client’s Rights
- The contract must contain a cancellation clause allowing the client to cancel the contract within three business days without incurring any attorneys’ fees
Rules establish a standard contingency fee percentage for Florida personal injury cases. If the attorney charges a higher percentage, the attorney must receive court approval for the higher fees.
The percentage of fees is based on the amount recovered and the point at which the case is resolved. For example, if an attorney settles a personal injury case before the other side files an answer to the lawsuit, the guidelines suggest a contingency fee of no more than:
- 33 1/3 percent of the first one million dollars.
- 30 percent of the next million dollars
- 20 percent of any portion of the settlement amount over two million dollars
However, if the case settles after the other side files an answer to the lawsuit, makes an arbitration or settlement request, or the deadline passes for the other side to file an answer, the guidelines suggest the attorney may charge a contingency fee of no more than:
- 40 percent of the first one million dollars
- 30 percent of the next million dollars
- 30 percent of any amount over two million dollars
There are special rules for medical malpractice lawsuits.
The Florida Constitution in Article 1 §26 states that an attorney can only charge 30 percent of the first $250,000 in damages and 10 percent of all damages over $250,000 for legal services. The client may voluntarily pay a higher percentage for the contingency fee, but they must sign an agreement for the higher fee when they hire the lawyer.
How Do Personal Injury Attorneys Earn Their Contingency Fees?
Injury attorneys work diligently to prove their client is entitled to fair compensation for all damages. Attorneys take numerous steps to obtain the best possible outcome for their clients. Steps an attorney may take during a personal injury case include, but are not limited to:
- Investigating the cause of the client’s injuries
- Identifying all parties liable for causing the injuries
- Review insurance coverage, confirm policy limits, and file insurance claims
- Work with expert witnesses and the client to document economic damages and non-economic damages
- Assess the case for punitive damages
- Evaluate damages to calculate the correct value
- Negotiate settlements with insurance providers and at-fault parties
- Calculate and monitor the statute of limitations for filing lawsuits
- Prepare and file a lawsuit if the other party refuses to negotiate a fair settlement
- Prepare clients for depositions and trial
- Draft, execute, and file all necessary documents to protect the client’s best interests, including settlement agreements, insurance claims, and lawsuits
Each personal injury case is unique. However, the steps an attorney takes throughout the case are to protect your best interests. Your lawyer works to hold the party who caused your injury liable for the damages they caused.
Why Do Personal Injury Lawyers Use Contingency Fees?
Many people who sustain personal injuries are out of work for several weeks or months during their recovery. It can be challenging to make ends meet, which does not leave any money to hire an attorney. However, everyone deserves competent legal services.
That’s why personal injury attorneys use contingency fees. Clients do not need to worry about paying legal fees until they recover money for their injury case.
Contingency fees also result in shared risk and incentive for the attorney and the client. The attorney does not get paid for legal services unless the client receives money.
The higher the settlement fee, the larger the contingency fee. So, personal injury lawyers have an even greater incentive to aggressively pursue all sources of compensation and fight for the largest possible settlement and jury awards.
Schedule a Free Consultation With Our Fort Lauderdale Personal Injury Lawyers
If you have questions about a personal injury case, contact our office to schedule a free case evaluation with our Fort Lauderdale personal injury attorney. We provide confidential assessments of your case and explain your legal options for receiving the money you deserve after an accident or personal injury. Our law firm accepts most personal injury cases on a contingency fee basis.