How much does it cost to hire a car accident lawyer?

When you’ve been in an accident, choosing whether or not you should hire a car accident lawyer is a big decision. Having an accident lawyer can be the difference between receiving a large settlement or receiving only a fraction of what your case is worth.

Generally, personal injury lawyers work on what is known as a contingency fee. However, they are also compensated for some reimbursable litigation expenses that they pay on behalf of their clients.

Car accident attorney compensation structure

Generally, accident lawyers will charge a contingency fee. This means that they will receive a percentage of the settlement if they are able to win the case. Other methods of payment include a flat rate and a retainer fee.

A flat rate is used when you only need a lawyer to do a specific task for you, such as write a demand letter. A retainer fee is an advance to the lawyer – you give them funds upfront from which they can withdraw their share of the settlement – if you win.

If you are the defendant in a personal injury case, your lawyer will most likely charge you an hourly fee. This means the lawyer will charge a set amount for each hour they work on your case. Generally, lawyers who have more experience will charge more hourly than lawyers who have less experience.

Below we provide additional information on typical costs associated with a personal injury lawsuit.

1. Contingency fees

Contingency fees are the most common form of payment when you hire a personal injury lawyer. Contingency fees are generally used for all personal injury cases, not just car accidents.

With a contingency fee, your lawyer is only paid if they are able to win a settlement. They are paid as a percentage of the total amount of the settlement.

Typically a lawyer will charge a contingency fee of one-third of the settlement, or 33%. Whether or not the case goes to litigation or a verdict is appealed can affect the charged contingency fee.

2. Case Costs

Litigation costs and expenses add further complications on how much of your car accident settlement you’ll receive. A car accident lawyer will typically have to make expenditures on:

  • Documents (copies of medical records and police reports)
  • Expert Witness Reports
  • Process Servers
  • Staff (court reporters, paralegals, interpreters, etc.)
  • Postage and mailing

During your car accident case, these fees can quickly increase the cost of litigation from a few thousand to many thousands of dollars.

3. Typical reimbursement and litigation expenses

It is important to note that when these expenses are deducted, they will be in compliance with the contingency agreement set forth by your attorney. It is up to the attorney if they wish to have the expenses deducted from the personal injury settlement or if they wish to pay for the expenses are soon as they are due.

Be aware that when the attorney deducts litigation costs and expenses, it can greatly impact your final settlement.

An attorney can choose to take expenses out of your personal injury settlement either before or after they take out their contingency fee. For example, you hire a lawyer to help with your car accident case. The contingency fee agreement is 30% of the case settlement. Your personal injury case settles for 400,000 and the litigation costs are 50,000. If the attorney is paid before the expenses are taken out, you would receive $230,000 and your attorney would earn $120,000. However, if the attorney is paid after expenses, you would receive $245,000 and your attorney will get $105,000.

Both payment options are ethical and legal. The chosen payment method must simply be stated clearly on the retainer agreement.

Other Compensation Structures

1. Contingency and Retainer

A contingency and retainer plan is a hybrid approach to attorney payment.

Clients pay their attorney a retainer fee and then the attorney sets a contingency agreement for the case.

If the plaintiff wins the case, then the retainer is subtracted from the attorney’s portion of the cash settlement. Look at the retainer as an advance on your car accident case.

For instance, you give your lawyer a $2,000 retainer on your car accident case. The contingency fee is 30% and you win a settlement of 20,000.  Your lawyer will be paid 4,000 (6,000-2,000) and you will receive 14,000.

2. Hourly Rates

If you hire a lawyer and you are the defendant, they will most likely charge hourly rates.

Hourly fees are not typical, most retainer agreements opt for the contingency fee option.

The lawyer is paid for each hour they work at a set rate– regardless of whether or not their client wins the case.

3. Flat Rate Fees

A flat-rate fee is when a lawyer charges a steady rate for a certain amount of legal advice or work. These are most common when you do not need a lawyer to fight your case for you, but you need something only a lawyer can get, such as a demand letter.  If you need a specific task completed by a lawyer or legal advice from the lawyer, they will most likely charge a flat rate.

Is getting a lawyer worth the cost?

The more serious your accident, the more worth the cost of a car accident lawyer is. If you find yourself in a small accident, with little injuries and pretty clear liability, you can most likely reach a settlement on your own.

However, if you were in an accident and you need a lot of surgery, the cost of your case will quickly rise. Don’t let an insurance company force you into a settlement early because it’s cheaper. At that point, having a lawyer fight the insurance company and your case for you is well worth the cost.

Provident Lawsuit Loans

With a solid attorney at your side and Provident backing you (by providing a lawsuit loan as a risk-free tool), you will be in the best position to reach a fair settlement on your accident claim. Call us today at (800) 908-6860 or apply online!

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