If I Do Not Pay Until I Win, How Is My Attorney Paid?
You have heard the slogans before, “You do not pay unless we win,” “no cost,” “We don’t get paid until you do,” and “free case review.” You might be wondering how on earth personal injury attorneys make money if everything is free and no cost.
The answer lies in something called a contingency fee. A contingency fee is an arrangement where the attorney agrees to represent a client for no money up front in exchange for a percentage of any money received from the opposing party.
This type of fee agreement is almost exclusive to personal injury cases. Clients do not pay a retainer or hourly fees. If the client wins, the attorney will take a percentage of the settlement. The most common percentage is 33 percent or one-third of the award. The percentage is not set in stone. It can differ from state to state and from law firm to law firm.
Contingency fee agreements must be in writing. That means that prior to a personal injury attorney taking your case, he or she will have you sign a document called an engagement letter or a fee agreement. All the information about the fees you owe your attorney will be in the letter. Read it carefully, so that you do not get surprised by any terms at the end of the process.
If you do not receive a settlement for your personal injury claim, you will not owe your attorney any money for his or work on your case. However, you should look closely at your fee agreement. Some firms ask clients to cover certain up-front costs.