Is a 25 Percent Fee a Good Deal?

lawyer explaining fee structureBefore you hire an attorney, it is important to understand the cost of legal services and what those fees will cover. Not all attorney fee contracts are the same. Before you sign, read the agreement carefully and ask questions until you are confident with your decision.

What are contingency fees?

Some areas of law involve contingency fees, where the attorney is paid based on a percentage of the amount they recover for the client, instead of an hourly fee. A contingency fee structure empowers people to seek justice when they have been wronged, even if they lack financial resources. Contingency fees are often associated with personal injury, employment, wage and hour, and government fraud cases.

What is a typical contingency fee?

Most contingency fees range from 33.33 percent to 40 percent of the amount recovered, depending on the type of law and the characteristics of the case.

Some law firms offer a discounted fee as low as 25 percent; however, lower rates are usually dependent on restrictions such as:

  • Settlement does not involve filing a lawsuit.
  • Liability is not disputed.
  • Medical causation is not disputed.
  • Valid for a limited time.
  • Client pays all costs, expenses and medical bills, regardless of amount recovered.

Because the majority of cases do not meet the restrictions listed in these discount fee contracts, the client often ends up paying fees significantly higher than 25 percent. Be sure to check what is and is not covered at a discounted rate, as well as what your rate will go up to should any of the restrictions occur.

Who pays for expenses while the case is pending?

It costs money to prepare and present an injury claim. Copy costs for medical records and bills, 911 tapes, police reports, and investigator fees to track down witnesses and obtain statements are just some of the costs typical to preparing an injury claim. Once a lawsuit is filed with the court, there are additional expenses, such as filing fees, court reporter fees, transcription fees, and witness fees.

Most firms will advance these costs for the client, paying them while the case is pending on the condition that the costs are reimbursed if the client recovers a settlement or judgment. However, some discount-rate contracts require the client to:

  • Pay out-of-pocket for these expenses as they are incurred;
  • Pay interest on the money advanced for the litigation costs; and/or
  • Reimburse the costs even if the case is lost and the client does not obtain any settlement or judgment.

Make sure you know what costs you are liable for and when you are required to pay them.

Compare Contracts

If you are considering a discounted contingency fee, we encourage you to get a second opinion on the contracts to ensure that you are comparing the same levels of legal services.

At the Arnold Law Firm, we offer a free, no-obligation evaluation of your case, so you can make the best decision for your circumstances. Our personal injury lawyers are happy to answer whatever questions you may have about fees or any other concerns you may have.

Call us at (916) 777-7777 or complete our evaluation form.