Ever been curious how lawyers get paid?

In this week’s video blog I’ll be clarifying how Attorney fees works when it comes to personal injury law.

Hi guys, Matt Clendenin here with the Clendenin firm. Today I want to take a few minutes to talk about lawyer fees for personal injury cases. I get asked all the time, in fact, nearly every new client wants to know how do personal injury lawyer fees work? And they hear this word thrown around called a contingency fee. It's a very strange word. It's just a fancy lawyer word that means a percentage and the lawyer is going to charge a percentage of any money that he recovers for you, whether it's a settlement or whether it goes to trial and there's a jury verdict. The lawyer only charges for his or her time if there's a recovery, if you're successful. So there's very few things that you can guarantee in litigation, but one of the things that we do guarantee is that if we don't get you money in your case, we're not going to charge you a fee.

Because if our fee is a third and we get you $0 then a third of $0 is $0 for the lawyer. So the lawyer's not going to get paid. And that's also the answer to the second most common questions I get is, "Holy smokes, 33% of my lawsuit, 40% of my lawsuit. That is so much money! " And first off, it's true. Lawyers are expensive. However, please keep in mind that the lawyer is investing not only their time but their own money to fight your case. And in the event that something goes South and the case is unsuccessful, the client can often just walk away. But really it's the lawyer who has invested their time and money that they lose and they don't get paid anything. So in exchange for that large percentage, you're getting a lawyer to take all the risk of the case.

The third thing I always get asked is how is that percentage calculated? Because when you get a settlement, there's a big pot of money. Let's take $100,000 for example, but it's not all going to the client. Typically, a client will only receive about a third to maybe 40 or 50% of their settlement. And if you think about it, it makes sense because the lawyers taking a percentage and then you also have to pay back your medical bills and then also you have to pay back the lawsuit costs. I like to call this the parts and labor of a case. The percentage that a lawyer is charging is only for their time. That's their fee for their time, but just like when you go to an auto mechanic, you have to pay for the mechanics time. That's the labor, but you also have to pay for the parts that the auto mechanic has to purchase.

Those are your parts. They're going into your car. In the same manner, when a personal injury lawyer is fighting for your case, the lawyer may advance costs. In the case the lawyer may front the court costs, the lawyer may front the court reporter costs for a deposition. The lawyer may front a medical record costs, expert costs, doctor costs. All those things get reimbursed from the settlement and that's not part of the percentage. The percentage is just for their time. If you think of it, it's kind of like an interest free loan that the lawyers doing for the case. They're investing in your case because they believe in it. So I always remind clients and I actually show clients basic walkthrough. If you're meeting with a personal injury lawyer, I always recommend, say, please show me an example settlement accounting, I want to see what it looks like. That'll give you an idea of a breakdown.

In fact, I'm going to include one right here. You can see this is a hundred thousand dollar case. That's the total settlement. Our lawsuit was successful. So we recovered that $100,000. That means the lawyer is going to charge their percentage. This case was settled during litigation, so we charged 40%. You can see our fee there. We also spent about three or four grand in lawsuit costs. So that comes out after. There at the bottom, you can see paying back the medical bills. Then at the end of it, there's a check that goes to the client. Now you can see in this case, the accounting worked out in the client's favor because they almost received 60% of the settlement. That's very high. Oftentimes a client will usually receive about a third of the settlement. Sometimes we use a rule of thumb, a third goes to the lawyer fees, a third goes to medical bills, and a third goes to the client. Of course, that's just a generalization, but I hope that helps you understand what personal injury lawyer fees are, how they work, and some of the most common questions that people have. Hope everyone has a good day. Catch on the next one. Take care.