Understanding Contingency Fee Agreements

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Personal Injury Lawyers 7If you are considering filing a personal injury lawsuit against a negligent party who left you injured or harmed in some way, then one of the questions that you will have to ask yourself is “will the potential winnings justify the time and money spent in the process?”

Many people will become overwhelmed when considering the cost of hiring an attorney. They may attempt to file the case on their own or may let the whole thing slide. However, the cost of attorneys’ fees doesn’t have to deter you from filing. In fact, most attorneys have made it easier on clients by offering their services on a contingency fee basis. That is to say that they will only collect payment if the case is won.

That is the basic definition of contingency fee, but there is more to understand about this type of agreement.

The first bit of advice that can be offered is not to search the internet for the average fees of personal injury attorneys. Most people ignore this advice and gasp when seeing that some attorneys charge as much as $1,000 per hour. This will often overwhelm a person who already has enough to consider.

First of all, this is not an average fee and secondly, the contingency fee basis waves the “per hour charge” anyway. Even the average contingency fee figures listed online can be misleading. Location, the facts of the case, and the lawyer chosen will dictate how much is to be agreed upon.

The contingency fee agreement will typically stipulate that if the case is won, then the client agrees to pay the attorney for expenses incurred during the process. The great part about this is that you don’t have to worry about covering the different fees associated with filing a case upfront. This is generally covered by the attorney’s office and is to be repaid only when the case has been won.

In addition to paying the expenses, the attorney will accept payment for his time spent working the case. This will be figured as a percentage of the damages awarded. It is important to read the agreement as there are big differences in how they are written from one office to the next.

For instance, you might glance quickly and see that one attorney is asking for 30 percent of the damages while another is asking for 20 percent. However, if the first contract says that the client agrees to pay the attorney’s office 30 percent of the net amount and the second says that the client agrees to pay 20 percent of the gross fees, then you need to stop and consider the meaning.

While 20 percent may seem like the lower fee, it will be taken before medical expenses are paid (from the gross amount), while the 30 percent will be taken from the total left after medical expenses are paid (from the net amount).

With some education and a willingness to interview a few different attorneys, you can learn a great deal about the different types of contingency fee agreements available and also about the average fee in your area.