What’s a Contingency Fee?
Personal injury lawyers often represent clients on a contingency fee basis. This method of compensation helps clients who can’t pay out-of-pocket for legal services get access to legal representation.
Clients benefit from the contingency fee model in several ways: no upfront fees, your lawyer is incentivized to maximize your recovery, no hourly billing, no payment for legal services if you don’t receive a settlement or award.
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No Up-Front Costs for Legal Services
If your personal injury lawyer represents you on a contingency fee basis, you don’t pay up-front for legal fees. You won’t pay out of pocket because the legal fees are taken out of whatever recovery you receive.
A portion of your settlement or award is used to compensate your lawyer. This type of fee arrangement gives access to the legal system for many people who otherwise could not afford to hire a lawyer.
Contingency Fees Incentivize Your Lawyer to Maximize Your Recovery
Your lawyer’s incentives should be aligned with your own. Contingency fees reward lawyers who get the best possible financial recovery for their clients. The amount of your settlement or award will determine how much your lawyer is paid for their legal services.
The contingency fee model also encourages lawyers to take cases with a good chance of success. When a personal injury lawyer agrees to take your case, they are putting their own skin in the game because they won’t get paid unless you receive compensation.
Avoid Tracking Your Lawyer’s Billable Hours
The hourly fee model gives a lawyer different incentives. They are paid for each hour they bill. Any time your lawyer is reviewing documents or negotiating on your behalf, they are billing you for each hour worked.
You don’t have to worry about paying by the hour with the contingency fee model. Your lawyer can work as many hours as are needed without it impacting the fee you will pay.
No Recovery Means No Legal Fees
You aren’t required to pay any fees for legal services unless you receive a settlement or award. If your lawyer doesn’t get you compensation for your injuries, he or she won’t get paid for the legal services provided.
Calculation of Contingency Fees
Contingency fees are generally calculated as a percentage of the settlement or award you receive. The percentage may vary depending on what stage your case is in when the recovery is obtained.
The Oklahoma Rules of Professional Conduct require contingency fee agreements to be in writing under Rule 1.5(c). The written agreement must clearly indicate how the contingency fee will be calculated. A client must sign this agreement.
The contingency fee agreement should also spell out what costs or expenses the client may be responsible for paying.
Some costs involved in a personal injury lawsuit include the following:
- Filing fees
- Costs of service of process on the defendant
- Expert witness fees
- Discovery costs
- Costs of obtaining certain official documents or records
Your agreement must state which expenses you are liable for and whether these expenses can be deducted from any recovery you receive.
Alternatives to Contingency Fee Arrangements
The most common alternative to the contingency fee arrangement is payment on an hourly basis. This arrangement is not commonly used by personal injury lawyers for several reasons.
First, clients must generally pay an up-front fee known as a retainer. This is similar to a down payment on the legal services. Many personal injury victims do not have funds available to pay a retainer, especially when they are dealing with medical bills, lost wages, and other costs from their accident.
Second, hourly fees are not tied to the success of your case. If you don’t receive a recovery, you still have to pay your lawyer for all the hours they have worked. This is a huge downside to the hourly fee model.
Discussing Fees With a Personal Injury Lawyer
You shouldn’t be worried about talking to a lawyer just because you can’t afford to pay for legal services. Your ability to pay is not considered when a lawyer is going to be working on a contingency fee basis.
During a free consultation, you can discuss whether a contingency fee arrangement can be used in your personal injury case. If you decide to work with an Oklahoma personal injury lawyer, they are required to provide you with a written agreement if they are working for a contingency fee.
You should also be prepared to discuss important details about your case during your consultation, such as:
- How your injuries occurred
- All costs related to your injuries, such as property damage, lost wages, and medical expenses
- The exact date your accident took place to avoid missing the Oklahoma statute of limitations for personal injury claims
Contact McGuire Law Firm at (405) 513-5658 to request a free consultation. You can learn more about contingency fees and how our Oklahoma City personal injury lawyers can help you seek the best possible recovery for your damages.