Personal injury lawyers hate talking about their contingency fee agreements with their clients. Me too. But it is an interesting and important topic and one of great importance to people who are seriously injured and will hire an attorney. This post explains how our law firm operates and gives a few thoughts on contingency fee agreements in personal injury cases.
Our contingency fee agreement with our clients in every personal injury case is exactly the same. Our firm gets one-third of the recovery if the case settles before a lawsuit is filed. If a lawsuit is filed, or there is an agreement to arbitrate the case, our fee increases to 40%. We have fronted all client expenses in every case we have handled in the last 10 years. If we are not willing to put up our own money, we would not be willing to take the case.
This is our agreement for every single personal injury case in our office. We have turned down at least two cases (that I know of: I’m sure there have been more) that have culminated in a seven-figure recovery because we did not agree to reduce our contingency fee.
Before I explain why we do it this way, let me go the other way and set forth the argument about why we shouldn’t have a set fee for all of our clients. Contingency fees in personal injury cases are designed to a large measure to compensate attorneys for the risk in time and money they must incur. So, theoretically, in a world of perfect information, calibrate the contingency fee with the risk/reward and set the attorneys’ fees accordingly. Continue reading