Peter Catania | August 4, 2021 | Car Accidents
Many people neglect to call a car accident attorney after a car crash because they fear they cannot afford legal representation. Unfortunately, that assumption benefits insurance companies and negligent drivers. Insurance companies prefer to deal directly with accident victims who might not understand their legal rights.
However, most personal injury lawyers accept car accident cases on a “contingency fee basis.” What does this mean for you? It means that you could hire a car accident lawyer to handle your accident case without paying a retainer fee.
Hourly Fees vs. Contingency Fees for a Car Accident Case
According to the U.S. Bureau of Labor Statistics, attorneys earned an average of $61.03 per hour in 2020. However, this is the median pay for lawyers throughout the United States in every area of the law. The actual hourly rate for an attorney in Florida is substantially higher.
Attorneys usually charge for their services based on an hourly rate or a contingency fee. With an hourly rate, the lawyer charges a fixed rate based on the time spent working on the person’s case. Many attorneys bill for their time in increments of six minutes.
Therefore, if the attorney spent 90 minutes working on your case, he would bill for 1.50 hours. Most attorneys who bill by the hour require clients to pay a retainer fee.
A retainer fee is an upfront payment that the attorney holds in trust. As the attorney performs work on the case, the attorney bills against the retainer fee. Depending on the agreement between the attorney and the client, the client may need to maintain a minimum amount in the attorney’s trust account. On the other hand, the attorney may bill services each month directly to the client after depleting the retainer fee.
With a contingency fee, there is no retainer fee required. The client does not pay any money upfront to hire the lawyer. Instead, the attorney takes a percentage of the amount they recover for the client as their fee.
In other words, the attorney is paid when the client is paid. If the attorney does not recover money for the client’s case through a settlement or jury verdict, the client does not owe the attorney any fees.
Many victims experience financial hardship after a car accident. They may be out of work for an extended period, or they may never be able to work full-time again. Contingency fees give accident victims access to legal services even if they cannot afford to hire a lawyer after their accident.
How Does the Contingency Fee Work?
Before you retain a lawyer, you and the lawyer agree on a percentage for attorneys’ fees.
The percentage the attorney charges depends on a variety of factors, including:
- The attorney’s education and special certifications
- The level of experience and years of practice for the lawyer
- The attorney’s track record of successful settlements and jury verdicts
- The complexity of the car accident case
- The parties involved in the car accident case, such as government entities, commercial truck companies, or large corporations
- The geographic location of the attorney’s office
Contingency fees may range from 25 to 35 percent, depending on the circumstances of the case. Attorneys who have substantial experience may charge higher contingency fee rates. However, it may be worth paying a higher contingency fee rate for a skilled attorney.
The attorney does not bill you for the time they spend on your case. Instead, they receive the agreed-upon percentage when the case settles — regardless of their time on the case. Your lawyer deducts their fee from the settlement proceeds or a jury award before issuing you a check for the net proceeds.
Your personal injury attorney has a strong incentive to work hard to get you the maximum amount of compensation for your claim. The more money the attorney recovers, the more money the attorney receives.
Who Pays the Costs of the Case?
When you hire a car accident lawyer, you should discuss the costs of the case, in addition to the attorneys’ fees.
For example, the costs of a car accident case could include:
- Postage and copy fees
- Travel expenses
- Court filing fees
- Fees for copies of accident reports, police reports, and medical records
- Expert witness fees, including medical experts, accident reconstructionists, and engineers
- Cost of depositions and interviews
Many attorneys pay the costs of the case but deduct them from your compensation. Always ask an attorney during your free consultation if you are responsible for paying any fees or costs if the attorney fails to recover any money for your case. Make sure you understand your responsibility for payment of attorneys’ fees and costs of the case before signing a retainer agreement.