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Date Modified: April 17, 2023

Understanding The PI Law Payment Process

How much a Personal Injury (“PI”) attorney or lawyer makes is a burning question people often love to ask. So, how much money do personal injury lawyers charge? What do the best lawyers make?

When you consider the average contingency fee payout, personal injury lawyers charge between $150 to $500 per hour. But exceptions exist that could make the hourly rate total up to thousands of dollars per hour, especially in mass torts or a class action suit.

Hundreds of forums and blogs exist on the internet, beating this topic to death. Some people only want to know their yearly salaries because they are curious about how much a lawyer makes. But others inquire about it because they want to join this field out of law school.

  • How much a PI lawyer in Los Angeles makes depends on many factors. However, an outsider can easily say that a lawyer makes a handsome yearly salary better than most other professions yield for the people.

The Many Different Types Of Personal Injury Lawyers

There are many different types of personal injury lawyers. Personal injury is not a small field. And if you go deep into it, you will see more than a dozen types of lawyers considered personal injury lawyers.

Surprisingly, some cases involve deaths, workers’ compensation, employment law, cruise ship cases, and other casualties.

Here are some of the different types of accidents PI lawyers handle under the applicable umbrella term of “personal injury”:

As you dig deeper, you will discover many other types of accidents and injuries that personal injury lawyers can handle. But some areas of PI law are more cookie-cutter, and others very complex.

For example, a rear-ender car accident is cheaper and easier to litigate than tricky mesothelioma or Jones Act cruise ship man overboard claims.

A person fighting a cruise company should possess knowledge of the contract, criminal, and other laws depending upon their type of case—generally, the better trained the lawyer, the higher their Lodestar or attorney’s fee value.

Factors Affecting Yearly Incomes Of Personal Injury Lawyers

Many websites will quote $62 as the mean average hourly wage for most lawyers. But these statistics only sometimes apply to PI lawyers. Commonly known is that personal injury lawyers can easily make above $70 Thousand every year. Because PI lawyers work on a contingency, they get paid a percentage of what they collect.

What percentage do lawyers take for winning personal injury cases?

Many state statutes limit the percentage your lawyer can charge as a contingency fee. California lets the parties decide what’s fair in most cases. Generally, PI lawyers take 33.33% of the gross amount of your situation before filing a lawsuit.

However, minors’ compromises and individual cases involving incompetents often see fee reductions to 25%.

  • The usual fee arrangement is 33.33% if your lawyers settle before litigation.
  • If the lawyer has to file suit, their take increases to 40%.
  • If they collect punitive damages or go to trial, the fee can go as high as 50% of our case.

A lawyer with many cases to resolve in a year can also cross the $200 Thousand mark annually. You will find these statistics on many websites, but the matter is more complicated than it sounds. Different lawyers make money in various scenarios and conditions.

For many reasons, some lawyers might make less than half of $100 Thousand yearly. Below, we discuss the breakdown of a typical personal injury settlement.

What Is The Breakdown of a Hypothetical Settlement of $100 Thousand?

It is in the newspaper headlines all around the world. Daily, awards of substantial verdicts and settlements occur. Does it seem like people are getting rich to you? Well, in most personal injury cases, that’s false. Below is an example of a possible settlement of $100 Thousand.

Legal agreements memorialize the fee between the client and their lawyer. Let’s take a look at a hypothetical settlement distribution.

Hypothetical Fee Distribution

  1. Legal Fees – The $100 Thousand will be divided to pay outstanding attorney’s fees. Attorney’s fees can vary. But you can expect prices of 40 to 45% of the settlement amount. Usually, payment of the personal injury attorneys comes from contingency fee contracts. Moreover, this covers their legal expertise. Also, they pay their money upfront for other cases. And they also pay members of their staff to hammer away at your issue. Even, sometimes your fee gets split between several firms. And this remains the case where there is a referring attorney involved. So here, let’s assume your owed legal fees will be cut in half by two law firms. The two law firms had a contract to divide a 40% contingent fee. So $20 Thousand will go to Firm A, and $20 Thousand will go to Firm B.
  2. Legal Expenses – (At this point, there is $60,000 of the $100 Thousand remaining). Your attorney will incur personal expenses. A few examples of legal examples would include deposition costs, expert fees, and costs for traveling. In some situations, it can wind up costing several thousands of dollars to cover a case’s expenses. For this example, we’ll say the costs are $18 Thousand.
  3. Liens and Medical Expenses – (At this point, there is $42 Thousand of the $100 Thousand remaining). Clients must finally pay outstanding medical liens and expenses. The federal government and most states require you to pay physicians, government agencies, and hospitals from settlements. So we still have to pay the $33 grand.
  4. The Client’s Part –  There is only $9 Thousand left from the beginning, amounting to $100 Thousand. And this covers lost wages, pain and suffering, and the time used to file the lawsuit. Also, in many cases, it covers failed relationships with a significant other.

So plaintiffs don’t always file a suit to get rich. Sometimes these lessons make sure no one else goes through what they had to go through. So it is about more than just the settlement amount. Communities are safer when plaintiffs stand their ground against lawbreakers.

When There is No Insurance Money, Do Most Lawyers Bill Hourly?

Yes, this is right. What legal domain a lawyer works in is a significant factor when calculating their annual income. Even though the per-hour rates are rare, some lawyers prefer to go this way.

One big reason for many lawyers charging this way could be that they do not see the case ending on favorable terms. Mostly, lawyers avoid at-fault or partial fault type cases. After all, a case like this means it’s less likely that insurance will pay, assuming there was coverage.

So naturally, the lawyer chooses hourly billing in these cases because a percentage of nothing doesn’t give them a good return. Moreover, this remains true even if they can win the case for the client. Besides, good luck trying to collect on an unsecured debtor’s judgment.

  • Most lawyers charge by the hour when there is no insurance compensation. Other times they charge hourly when the lawyer thinks the case is weak.

How Much Money Do Lawyers Get?

  • 26% of lawyers don’t work for an organization. After all, they want to earn more significant profits from their profession. Some remain self-employed to keep a flexible schedule.
  • The lawyer’s location also plays a vital role in his yearly income. A lawyer in a populated city will earn more than a lawyer working in a rural area.
  • How a lawyer markets himself has become the most crucial factor in a lawyer’s yearly income. Law websites are some of the most popular types of websites today.

The type of employment a lawyer takes up is another factor in his yearly income. An accused person’s injury defense attorney mostly be paid based upon “billable hours.”

A freelance will charge a percentage of the win. So it is hard to predict how much a self-employed plaintiff’s lawyer would make at the end of the year. But it depends on their efforts. The type of organization that employs the lawyer also decides how much he will make, like bonuses or salaries.

A PI defense lawyer serving the government will make less money than a PI defense lawyer working for a successful private firm. As you can see, the types of lawyers and how much money they make depends on several factors.

And this adequately answers the question. Lawyers need to have themselves appropriately marketed and more efficiently on the internet today. A free consultation is the most effective tool for today’s lawyers to attract more clients towards them.

Furthermore, lawyers can now use social networking platforms to market themselves and earning huge profits at the end of the year. Personal injury lawyers, in particular, could make almost nothing or become very wealthy.

Michael Ehline is an inactive U.S. Marine and world-famous legal historian. Michael helped draft the Cruise Ship Safety Act and has won some of U.S. history’s largest motorcycle accident settlements. Together with his legal team, Michael and the Ehline Law Firm collect damages on behalf of clients.
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Michael Ehline

Top Injury lawyer, Michael Ehline, Esq.
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