How do personal injury attorneys get paid?

Many personal injury attorneys prominently advertise that they do not charge any fee for initial consultations and that there is no fee unless there is a recovery. In reality, this is how almost every personal injury attorney operates. The majority of attorneys who handle personal injury cases work on what is called a “contingency fee” basis. This means that the attorney’s fee is “contingent” on obtaining a recovery for their client. The attorney will only get paid for working on a case when – and if – they recover on the client’s behalf. If there is no recovery for a client, the attorney is not compensated for their time spent working on the case. Likewise, most personal injury attorneys advance the cost of pursuing a claim and are not reimbursed for their expenses – which may be substantial – unless the claim is successful.

A contingent attorney’s fee is based on a certain percentage of the client’s overall recovery. It works very similarly to a salesperson that works on commission, except instead of the fee being earned at the time of sale, it is earned at the time of settlement or when a final verdict is paid.

The amount of an attorney’s contingency fee in a personal injury case will vary based on the type of case. In a workers’ compensation case under Alabama law, the fee is limited by the Workers’ Compensation Act to 15% of the recovery. In other types of cases, it is common for a contingency fee to be 1/3, or 33.33%, of the recovery. In the event a claim has to be filed in court or tried before a jury, the fee may increase to 40% of the recovery. This allows the attorney to be compensated for the additional time, effort, and expense associated with working on a case in litigation and/or trying a case to a jury.

Specific knowledge and expertise are required in more difficult cases where protracted litigation is likely. In cases where the risk of an unfavorable outcome is greater, a contingency fee may increase to 45% or even 50% of the recovery. An attorney should determine their fee based upon the time and effort they anticipate having to put into an individual case, as well as the resources necessary to prepare the case properly. An attorney must also consider the time they will spend on any one particular case because it may preclude the ability to handle other cases.

Personal injury attorneys work on a contingency fee basis because their clients are usually already in a difficult position when they hire their lawyers. If an injury victim is already facing financial hardship due to their medical bills and lost income from being unable to work, it would probably be impossible for them to pay a large retainer to hire a lawyer or pay hourly. A contingency fee also motivates an attorney to work hard to succeed on behalf of a client. Since the attorney is paid based on what they earn for their client, the contingency fee provides an incentive for the attorney to ensure they obtain the best recovery possible for their injured client.

At Timberlake & League, we handle cases on a contingency fee basis and never charge for a consultation. Our attorneys meet with potential clients personally, and we explain the fee agreement to every client, so there is no confusion about the process. We work hard to achieve the best results for our clients. If you or a loved one has been injured, we can help.