No. They are not. That is, assuming you are not paying 40% or 50% of your personal injury claim to your lawyer.
As a personal injury lawyer, I am selling to you my knowledge and my time. Every hour I spend on your case is an hour I cannot spend on someone’s else case. So, I have a limited number of hours in a day in which I can sell my knowledge and make my business profitable. But, on the other side of that coin, you only have one personal injury claim from a car wreck and you need to do what you can to make the recovery on that claim as high as possible. Therefore, when choosing a personal injury lawyer, you need to understand how a contingency fee works before you even step into their office. I will use my firm’s fee agreement to explain.
Contingency Fee Agreements
For a personal injury claim from a car wreck, a contingency fee agreement works in favor of the injured client because the client owes nothing if nothing is recovered. For example, you have just been in a car wreck with someone that gives a fake insurance card to the investigating police officer, your car is a total loss and you don’t have collision coverage on your car because that kind of insurance was too expensive. After I have met with you and looked for insurance through several sources, I conclude that the at-fault driver and his vehicle did not have insurance. At this point, I probably have five hours into your case and my normal hourly rate is $250 an hour. So, if you were paying me by the hour, you would already owe me $1,250 in addition to the fact that you are also losing the value of your vehicle.
Can you sue someone who does not have insurance? Yes. But generally, it is not worth it as they have no assets to recover your judgment, i.e. a piece of paper that says they owe you money.
In contrast, with a contingency fee applying to the above example, you owe the attorney nothing as they did not recover any money on your behalf. After twenty-plus years of practicing personal injury law, let me say that any good car wreck attorney will use a contingency fee agreement wherein the client owes nothing if there is no recovery made.
My Own Contingency Fee Agreement
To use my own continency fee as an example, most of my cases are charged a 33.33% attorney’s fee. For any case that does not involve a lawsuit, I charge 33.33% of what I recover as my fee. In contrast, some of the big firms that advertise on television, now charge 40% right off the bat. I am sorry but why would you pay that additional 6.67%? This extra 6% is like paying a tax on your personal injury settlement.
My fee does increase to 40% when a lawsuit is filed because my firm’s expenses, my knowledge, and the required time increase dramatically to prove a personal injury claim through litigation. However, I will always discuss with my client whether their personal injury claim justifies a lawsuit and whether we think such a lawsuit can increase their recovery.
To use an extreme example, if we go all the way through litigation to trial and a jury awards you $0 dollars on your pain and suffering claim, even though I have $5,000 in out-of-pocket expenses because of litigation costs (e.g. filing fees, deposition costs, costs of hiring experts) I spent to your advance your claim, you owe me nothing!
“You Owe Us Nothing”
A big TV advertiser has recently been pushing this as their new slogan. So, what! Desmond Law Office has been following this policy of “no recovery means no attorney’s fee” since its inception in 2005. Any good personal injury lawyer follows this policy and if you are with one that does not run the other way!
An Important Policy
Lastly, there is another provision that every personal injury lawyer should have in their contract but honestly, I think I am the only one that follows this procedure. I have a written policy that for any case that does not involve a lawsuit, my attorney’s fee will always be less than the client’s net settlement, i.e. the amount you put in your pocket. A good contingency fee should follow this rule as the ultimate, safeguard to the client’s personal injury claim.
Personal injury claims involve a claim for your injuries and the time it takes for you to have those injuries medically treated. What good does it do you, as a personal injury client, if I recover $100,000 on your behalf but between attorney’s fees, costs, and medical bills I pay out $98,000 to everyone else but only $2,000 to you? I will answer that for you, NO GOOD AT ALL!
The advantage of a contingency fee for a personal injury lawyer is that their attorney’s fee increases with the amount of the recovery. For example, if I recover $15,000, the client only owes me $5,000 but, if I recover $150,000, my attorney’s fee is $50,000. The advantage of a contingency fee to an injured victim is that they don’t owe any legal fees unless money is recovered on their behalf. But there has to be a safeguard to protect the client and that safeguard is a policy that their attorney’s fee will not be more than the client’s net settlement for a case that does not involve a lawsuit. This is how the Desmond Law Office does business because we know, in the long run, earning your future business is more important than putting a couple more dollars in your pocket. If your personal injury attorney does not have this safeguard in their fee agreement, ask them why not? You have one personal injury claim from your car wreck. Your personal injury lawyer should not recover the majority of any settlement that is reached.
Have Questions?
Please look through the website and hopefully, it gives you the additional information you are looking for. However, don’t hesitate to call or text me on my cell phone, 502-609-7657. Whether it is during the weekend or after 5 p.m., I will respond to you personally and let you know whether I can help you or not. In the interim, stay safe and God bless!
