Contingency Fee FAQ
What Is a Contingency Fee?
The first question you ask before you sign the retainer is almost always:
"how much do you charge up front?"
The answer is that Ehline Law Firm is contingency fee-based. In other words, you pay no attorneys’ fees up-front. And even then, we never get a fee at all unless we recover for you. Yes, you heard correct, you owe us no charge unless we get you an outcome for your accident.
What is a Contingency Fee Lawyer?
A contingency fee lawyer is a member of the bar who works on a no recovery no fee retainer contract. It is also called a conditional fee agreement or "CFA." Typically, you get a free initial consultation from a lawyer. Mostly, the plaintiff's personal injury lawyers use this type of fee structure. Once you get a free consultation, you get an opportunity to seek a second opinion.
Afterward, once satisfied, the consumer signs the fee agreement.
- In consideration for taking the case, the lawyer gets a set percentage of your gross recovery.
Once the case gets resolved, we plaintiff's lawyers take our cut.
In conclusion of the matter, you use the rest of your piece of the pie to:
- Pay back any costs we advanced. But this is usually for things like expert witness fees, photocopies, etc.
Also, you pay your other expenses out of pocket, or on a lien basis. The remainder is what you keep, typically as a tax-free personal injury award.
Dealing With Liens.
We leave any money in the attorney-client trust account to pay any liens we co-signed. But you deal with the other creditors in your case. In other words, you keep that money and decide how to proceed.
Just keep in mind, Ehline Law Firm may be required by law to withhold sums from your amount.
What Makes Ehline Law Firm Different When it Comes to Lien Reductions?
Next, in some cases our clients want us to help reduce owed costs, lien or not. Sometimes it is a good idea to have us deal with outstanding bill collectors.
What makes us special is that we pass on the savings from any reductions of your bills to you. We only take a fee from the personal injury portion of your claim. Yes, you heard, right!!
But wait, there's more! .....
Are Protected People, Like Minors' and Incompetents' Settlements Universally Scrutinized?
Yes. Absolutely. This scrutiny is a case where there is a compelling state interest in protecting a class incapable of defending themselves.
Examples, where an earned fee could be reduced or limited in California, include:
- Some elders
So these are highly scrutinized contingency fee contracts in California and other states. In California, for example, you will need to set up a trust, and conservatorship in most cases. This protective scheme is very complicated, time-consuming, and expensive.
So What is the Typical Contingency Fee Amount in a Personal Injury Case?
Mostly, you will be looking at contingency fees in the range of 35% and 40% of the gross amount you will receive as part of the settlement.
- Another familiar figure is one-third. Here, your lawyer takes 33.33% of the total settlement amount.
What is a Shifting of Limits Attorneys' Fee?
Another term you might come across as you go in the details of the contingency fee structure is “shifting of limits.” What this means is that your lawyer can charge you a different contingency fee based on the condition the case is in when the agent picks it up.
After analyzing the situation, your condition, your damages, etc., the contingency fee lawyer dispatches a letter to the offending party. Here your lawyer lets them know of the demand for the final settlement. So if the offending party agrees to pay this amount the agreement, the case never enters the court.
This demand is an easy way to reach the end of a case, and so you won’t have to pay more than 33.33% to the lawyer as his contingency fee in this scenario. However, things can change if the offending party doesn’t agree to pay the compensation amount or completely disagrees to take the blame for the personal injury.
Now, in this particular scenario, the case goes to court for an eventual trial. This court filing process starts by filing a lawsuit. In this given situation where the case ends up in the court, your lawyer receives a higher percentage of the final settlement amount – a 40% fee in most cases.
Contingency Fees Might Not Be The Only Deductions
Furthermore, contingency fees are not the only thing that needs deducted from the final settlement amount when a case closes, but that’s not the case every time. The lawyer is handling the case will collect the evidence and investigate the incident to strengthen the situation.
All of this requires him to collect reports, hire people to perform various tasks, etc. The lawyer can choose to pay for these expenses either from his pocket or ask you straight away to pay for these expenses.
If your lawyer has asked you to pay for these extra legal fees, then your final settlement will be the amount less the attorney’s fee. However, if the agent has been making these expenses from his pocket, then the sum of these expenditures will be taken from your final settlement check.
In this case, if you don’t have the money to pay these fees, the fact will come to a stop.
The many areas where the money is spent while handling a personal injury case include:
- Witness fees
- Trial exhibits
- Medical records
- Police reports
- Filing fees
The longer the situation lasts, the higher expenses are, and the higher the amount deducted from your final settlement. In some scenarios, the percentage that comes as the victim is 45% to 50% only.
What Are Some Benefits Of Contingency Fee Structure?
There are several benefits of choosing lawyers that work with a contingency fee structure. People who don’t have enough money in their pockets to start pursuing compensation in a personal injury case seek without paying up front.
Another huge benefit is that the lawyer's interest ties to winning your case. If the lawyer takes his fees upfront, then there are higher chances of work without required passion. Because of this, his interests and motivation have died in such a scenario.
How Is a Contingency Fee Taken?
The settlement check from the offending party will be sent to the lawyer in your case. The draft gets deposited into the attorney-client trust account. This ensures that your line holder and lawyer get paid their fees. In addition, any other extra-contractual expenses before the proceeds you are owed go into your personal bank account.
Also, it remains the responsibility of your lawyer to inform you as soon as he has received the settlement check. He should give you complete details on how much money he’s going to take the form the settlement check. And your lawyer should also explain the expenses in detail.
Does Ehline Law Firm Take a Fee for the Property Damage Portion of Your Case?
Heck no. We go the extra mile. You assist us hand in hand with this portion of your case. You help us get things like your receipts for upgrades, estimates from the local Auto Traders, etc. Next, you help us find out if the insurance company's comparable vehicles are even decent or similar to yours.
We have found that our clients know their cars better than we do. We have many stories to tell about the games insurance adjusters, and estimators play.
So we work with you to push for better value estimates. You see, no matter what, we place ourselves in your shoes. Empathy is key here.
IMPORTANT: Often, Ehline Law Firm can pass on the money saved from your medical and other lien reductions.
Whether we get you a lien reduction or not:
- You will owe us nothing for our efforts to reduce.
- We will never take a cut for what we save you.
- It's a free service we offer as part of our promise.
CAVEAT: Costs are Not Attorney's Fees?
Keep in mind that costs advanced by your lawyer are not free. They are an interest-free loan. Advancements help less wealthy clients pay for things like court costs. These get paid back after representation.
Some lawyers, on a case by case basis, including our firm, do waive your costs on certain occasions. But these are typically in cases where the victim has recovered nothing. Learn more about how we handle contingency fees.
Understand whether or not you have a possible, actionable, justiciable case. So call us for a free case evaluation and get a handle on your problem. Call now before it becomes unmanageable. (213) 596-9642.
- More PI Law Terms and Definitions: Ehline Law Legal Dictionary