What is a Contingency Fee?
Lawyers can use various approaches when entering a fee arrangement with their clients. The contingency fee arrangement is popular with most Chicago injury law firms, and it differs significantly from the payment arrangements used in other areas of law.
A contingency fee is a type of billing in which an attorney gets paid after personal injury clients recover compensation for their damages. The attorney gets a percentage of the settlement amount awarded at the end of the case instead of an hourly rate. That explains why some personal injury lawyers confidently say that “they don’t get paid unless you do.”
Is a Contingency Fee Arrangement Better?
The most outstanding factor of a contingency fee arrangement is that a client isn’t required to make any payment for consultation or during the ongoing case. The fees for a personal injury lawyer in Illinois are purely drawn from the settlement proceeds when the lawsuit is over. The lawyer gets no payment if the client doesn’t get any compensation. Put another way, the lawyer gets no payment if not successful. Put yet another way, the lawyer is only paid for results. The bigger the results, the bigger the payment to the attorney. It is a good system that incentivizes your attorney to work hard to obtain the best possible result in your case.
The arrangement favors clients from all walks of life. Besides, it widens access to the civil justice system by enabling personal injury victims from all income levels and social statuses to find a lawyer. Overall, there is an alignment of interests between lawyers and their clients. The motivation is to maximize the compensation amount for the client.
When Are Contingency Fee Arrangements Used?
Contingency fees work well in cases where clients are short of funds but have a costly or complex civil lawsuit. When compared to large insurance companies, the average person could never afford to pay an attorney in the manner most attorneys are paid, anywhere from $200 to $1,000 per hour. As a result, financially powerful corporations like large insurance companies would simply litigate a claim until the injured party ran out of money. The result? No one would ever be able to assert their personal injury rights. A contingency fee arrangement works best, it allows you to hire an expert injury lawyer and assert your injury rights against powerful insurance companies.
An expert personal injury attorney in Illinois will evaluate your claim to determine if it is financially viable. Many factors go into this calculus. Is it clear that the other party is at fault? Are there viable arguments that you are at fault, at least partially? What would it cost during a lawsuit to prove the other person is responsible while also proving the full extent of your damages? It can be very expensive. Did the injured person get the lawyer involved early enough to help gather necessary evidence that can be destroyed as time passes? This is why it is helpful to involve an expert injury firm to help you decide the likely outcome of your case. The experienced injury lawyer conducts this type of evaluation on claims every single day and is incentivized financially to accept winnable claims. Unless you are a very unlucky person, you likely have never been in this situation before and hopefully never will be injured due to the negligence of another person ever again.
Some examples of civil cases where a lawyer may work on a contingency fee arrangement include:
- Workers’ compensation
- Personal injury
- Sexual harassment
- Debt collection cases
- Class action lawsuits
- Employment discrimination
How Much Can Lawyers Take in Contingency Fees?
The amount a lawyer gets as a contingency fee depends on various factors, and lawyers apply different tiers when structuring their fee payments. Besides, they can base the contingency fee on the nature of the case itself.
In most clear liability cases, contingency fees are 33% of the settlement amount. Because filing a lawsuit and obtaining a verdict is much more work and financial risk to the law firm, most firms increase their fee from 33 ⅓% to 40% to make up for the enhanced workload and risk.
It’s always advisable to agree with your Illinois personal injury attorney beforehand and have the agreement in writing. The agreement is present in every case with every personal injury lawyer, as it is required by ethical rules, and known as the “retainer agreement.” This way, you’ll know what you’ve committed to paying for the service.
When Can a Contingency Fee Arrangement Not Be Used?
Not all cases provide an opportunity to use the contingency fee arrangement because the arrangement poses ethical issues in some cases. These include divorce, adoption, immigration, estate planning, contracts, and criminal defense cases.
Clients may also prefer not to use the contingency fee arrangement when they determine that it could cost them more than a regular hourly fee. Remember that once you agree to a certain percentage, that’s what you will owe no matter how long the case will take, even if it only requires a couple of hours to settle.
An expert injury law firm in Chicago should be selective about the cases the lawyers agree to handle on a contingency fee basis. The last thing you want is a lawyer that accepts every claim made by everyone injured, you can pretty much count on working with a lawyer with too little time to give adequate attention to your claim required to maximize claim value.
Can I Negotiate the Contingency Fee?
While nearly everything is negotiable, especially with the legal industry, expert injury lawyers know their value. Research shows that hiring a good injury attorney enhances claim value by an average of 300%. Further, expert injury lawyers in Chicago understand that the less they’re paid on a claim the more claims they must take to run their business. The more claims a lawyer takes the less time they have to spend on your case. So, if you intend to negotiate the attorney’s salary lower, consider that the best attorneys do not want to (and often do not need) to reduce their fee. In other words, you get what you pay for in terms of service quality with lawyers just like other things in life, like hotels, restaurants, vehicles, so on and so forth.
In some situations, the contingency fee arrangement can appear like a low risk to the lawyer because they only get paid if they win the case for their client. You should consider that the best Chicago injury law firms must consider which cases are worth their time and which are not.
In any event, you should discuss all these factors in depth with your personal injury attorney in Illinois before agreeing to the arrangement. If an injury lawyer agrees to reduce their fee without giving it much thought, you may just end up becoming a number on their business spreadsheets.
Can the Court Limit or Lower the Percentage or Amount of the Contingency?
This does happen, particularly with minor’s claims or wrongful death claims. Lawyers and their clients use their discretion when agreeing on attorney’s fees. However, a court may find the contingency fee agreement unfair or unreasonable and thus amend it to make it more reasonable. Some factors the courts consider when amending contingency fee arrangements include the following:
- The likelihood of recovering damages in the case
- The reputation and experience of the lawyer
- The amount of time the lawyer requires to prepare and work on the case
- The amount of work the lawyer has to forgo to work on the case
- The amount of settlement amount in question
- How much an attorney would typically charge for a similar case
Regardless of the outcome, you mustn’t let the legal fees stop you from pursuing the compensation you rightfully deserve. With a proficient Illinois personal injury, you have a high chance of recovering all your damages, including your past, current, and future medical costs.
Reach a Fair Legal Fees Agreement with the Assistance of a Professional Legal Firm
If you have a potential injury lawsuit or injury claim, the contingency fee arrangement affords you the ability to obtain representation against large corporations that would otherwise muscle you out with their outsized financial resources. However, lawyers are not legally required to agree to represent you. Consult an experienced lawyer from a Chicago injury law firm to discuss your case and overall chances at trial.
At our firm, we make sure that our clients understand how our legal cost structure works. Being completely open with them to ensure they understand the arrangement will make them feel more at ease as we handle their case and fight to help them get the best outcome. We make client satisfaction a top priority and seek to deliver beyond expectations. Call us today to have an expert personal injury lawyer in Illinois help you evaluate your personal injury lawsuit.