A Contingency Fee Arrangement is a Good Option if You Cannot Afford an Attorney


Jared: Hi, I'm Jared Richards. I'm one of the partners here at Clear Counsel Law Group. One of our readers has asked: What are my options if I'm injured by somebody else's negligence but I can't afford to hire an attorney? You have pretty good options, especially when it comes to personal injury. Now you'll find that most personal injury attorneys are willing to and often exclusively do this, that they're willing to take cases on what they call a contingency fee. Now a contingency fee means that essentially the attorney, he is willing to represent you, he's willing to pursue a claim for you in exchange for a percentage of whatever it is that he collects.

Now when you hire an attorney and you pay them hourly or you pay them a flat fee, you are accepting the risk of the attorney's fees because let's say the attorney fails. Let's say that you don't actually make any sort of recovery. You don't make any money on the claim. If you've paid the attorney directly, then you've accepted the risk. Most attorneys are willing to work hourly. Now in most cases, though, individuals that get hurt don't have the kind of money that they would need to hire an attorney hourly, so that's why personal injury attorneys generally are willing to do it the other way around.

Now when you hire an attorney on contingency you have to understand that they're going to get their percentage whether they settle quickly or whether this goes all the way through trial. The percentages will often change. It will often increase depending on how into the litigation you go. The reason that they do that, the reason that they take a large percentage, often a third if the case settles even outside of court, is because the attorney at that point is taking on the risk of the attorney's fees. Because if the attorney doesn't get anything, then he walks away having earned nothing but having done the work.

When we're talking about hourly or contingency, it all depends on who wants to take the risk of the attorney's work if the attorney were to fail. Does the client wanted to do that or does the client want the attorney to do that? In most personal injury attorney matters, most personal injury attorneys will take a contingency fee. Looks like Brian has a question.


Brian: What's a fair percentage for a contingency fee to be?


Jared: Fair? I would say that the industry standard tends to be a third if the case settles outside of litigation, and then 40% if it goes into litigation. Some people do different tiers. Some people would do a third if it settles outside, 40% if it settles after the lawsuit is filed, and then 45% if it goes all the way to the trial, and then 50% if it goes on appeal. Everybody is different, but I would say along those standards are industry standards. We tend to do a third if it settles before we have to file a lawsuit and 40% if we have to file a lawsuit. Anyway, if you have any more questions, please pick up the phone, give us a call, or send us an email, and we're happy to answer them.

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