How Are Personal Injury Lawyers Paid?

Marcus Blanford

How Are Personal Injury Lawyers Paid?

There are so many people that do not hire personal injury lawyers in Detroit because of the belief that they have to pay large fees and they cannot afford them. In reality, there is a huge freedom when it comes to the fee arrangement between injury lawyers and clients. The way in which attorneys are paid is dictated by who is represented:

  • When representing plaintiffs
  • When representing defendants

When Representing Plaintiffs

In most cases, the contingency fee is charged by the attorney. This practically means that injury lawyers will not get paid unless a claim is obtained for clients. Usually, the fee amount is a percentage, normally around 33%. This is taken from the total amount recovered during the personal injury settlement.

Contingency fees are straightforward. However, some variations can appear. The very common ones are:

  • Mixed Contingent-Hourly – In this case, the attorney is paid an hourly rate for the work even when the plaintiffs lose. However, the rate is much reduced. If the case is won, an extra percentage is gained from the total amount, but it is usually smaller than when working only with contingency.
  • Sliding Scale Contingency Plans – The difference from the regular contingency plan is that the percentage paid goes up when litigations progress. For instance, when cases are settled before going to trial, the fee tends to be lower.
  • Contingency Hourly – The attorney will only be paid when the recovery appears but the amount received is dictated by how much time the lawyer had to spend doing work for the case. Normally, such a deal is not offered in personal injury cases. It is only considered when plaintiffs can also recover fees for attorneys from losing defendants.

When Representing Defendants

In most cases, the fee is presented under a billable hour contract. Hourly billing is very easy to understand but just as with contingency fees, some variations do exist, like:

  • Retainers – Clients pay a specific lump sum before the work is started. This is often kept in a bank account that is separate from the accounts of the law firm. When the work is completed, attorneys can withdraw retainer funds.
  • Blended Hourly Rates – When there are several attorneys working on a single case, hourly rates can be a blend.
  • Hourly Caps – In this case, there is a standard hourly arrangement present but there is a limit in regards to how many hours the attorney will work. Even if lawyers spend more time working, they still can only charge for this upper limit.

Who Will Actually Pay The Injury Attorney?

When working for plaintiffs, when a recovery is obtained, the fees of the attorney come from how much the defendant is paid for the settlement. When working for defendants, there might be a liability policy in place that could mean it is the insurance company that will pay the attorney. However, in most cases, it is the defendant that pays for the services of the injury lawyer. This is particularly true when there is no insurance company involved in the claim and the defendant cannot use a policy.

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