A contingency fee means that a lawyer receives a percentage of the settlement, verdict, or jury award upon winning your case rather than billing you an hourly or flat fee.
With contingency fees, there are no upfront fees, also known as “retainers” or “retainer fees,” that you must pay to begin receiving a lawyer’s legal services in your case.
Continue reading to learn more about contingency fees in Florida personal injury cases.
How Does a Contingency Fee Work?
Under a contingency fee arrangement, a client doesn’t pay for their lawyer’s services out of their own pocket. This means that whatever percentage the lawyer is owed is deducted from the client’s awarded compensation.
If a case settles, the lawyer receives a portion of the settlement amount. If a case goes to trial, the lawyer will represent the client throughout the duration of the litigation process in court.
Upon a jury verdict in favor of the client, the attorney will receive a percentage of the jury award. If the case goes to trial and the lawyer doesn’t receive a favorable ruling, they will not be paid.
Only when a party receives compensation for a claim does a lawyer receive a contingency fee.
Why Are Contingency Fees Used?
One reason to use contingency fees is the cost of high-quality legal representation. If a client cannot pay a lawyer an hourly fee to represent them, a contingency fee arrangement is mutually beneficial for both parties.
When a client already bears the burden of medical bills after an accident, contingency fees eliminate the financial and emotional stress of managing additional expenses derived from the cost of legal representation. A client’s limited resources shouldn’t prevent their ability to secure experienced legal counsel.
Contingency fees also serve the interests of lawyers. These fees provide an additional incentive for a lawyer to produce efficient and high-quality legal work for their client to win their claim.
The larger the award won, the more the lawyer is ultimately paid. This arrangement gives lawyers a big incentive to maximize their client’s recovery and avoids the filing of frivolous lawsuits.
How Much Is a Contingency Fee?
Most Florida personal injury attorneys charge between 33 and 40% for their contingency fees, but certain factors may affect the percentage:
- Time and effort: The amount of time and effort may be estimated by the lawyer before accepting a case but could vary. Experienced lawyers can predict the resources that will be necessary to win a case, but this rough estimate could be subject to change as the case progresses.
- Risk: Some cases have strong evidence that is likely to lead to an award, while other cases do not. The level of risk imposed by taking a case may cause the contingency fee to vary.
- Settlement and trial: Most personal injury cases are settled before trial, but some may ultimately end up in the courtroom. Settlement may result in a quicker resolution of a claim, leading to a lesser expense of legal resources and a lower contingency fee. On the contrary, a case that goes to trial may have a higher contingency fee due to the time and resources involved.
Most personal injury attorneys offer a free consultation, where you can ask questions and learn more about the fees they charge for their legal services.
What Are the Alternatives to a Contingency Fee Arrangement?
Some alternatives to the contingency fee arrangement include:
In many agreements between lawyers and their clients, the lawyer agrees to work for an hourly fee and periodically bills their client. It is common for clients to pay a retainer fee upfront, from which the lawyer deducts expenses and costs for their work on the case.
For example, if a lawyer requires a retainer fee of $5,000 and bills at $250 per hour, the client would have prepaid for 20 hours of legal work. A retainer provides a degree of insurance for both sides involved: the client knows that their case is being worked on, and the lawyer has received payment for their work.
Lawyers often send periodic letters to their clients as the retainer whittles down. A lawyer may notify the client that they will have to pay more soon to keep the case going. If a client fails to refill their account at the law firm, or if they fail to make payments as they come due after the retainer runs out, the lawyer may choose to cease their representation of the client.
Some attorneys charge a flat fee, where they collect a certain fixed amount for their legal services. This is common if the attorney is drafting a contract or agreement they are accustomed to preparing. Some criminal law attorneys also charge flat fees for their services.
Most Florida Personal Injury Lawyers Work On a Contingency Fee Basis
A contingency fee benefits both parties, especially an accident victim struggling with medical bills and lost wages. Contact a personal injury lawyer from Winters & Yonker Personal Injury Lawyers in Florida to discuss your personal injury case and ask questions regarding their contingency agreement.
We have five convenient locations in Florida, including Tampa, Clearwater, St. Petersburg, New Port Richey, and Lakeland.