Most personal injury attorneys in California work on a contingency fee basis, meaning you pay nothing upfront. Fees are deducted only if you win a settlement or verdict.
Most personal injury attorneys in California work on a contingency fee basis, meaning you pay nothing upfront. Fees are deducted only if you win a settlement or verdict.
Disclaimer:
The information provided in this article is for general informational and educational purposes only. It is not intended to constitute legal advice and does not create an attorney-client relationship. Statutes of limitations and legal rights can vary based on specific facts and circumstances. You should not rely on this information without consulting a qualified attorney about your particular situation.
In California (and in most states) personal injury lawyers do not charge an hourly rate, but instead take a percentage of the amount they can recover for you. if you are the party making an injury claim, personal injury lawyers will customarily charge anywhere from 33.333 % to 40 % of the amount they recover against the Defendant on your behalf. Some lawyers may even take a higher percentage if the case will have to go to trial to be resolved.
These amounts can vary depending on the lawyer you hire, as well as depending on what stage of the process your case is in. For example, if your case is able to be resolved in what we call pre-litigation or pre-lit, then typically the attorney’s fees will be 33.333 %. However, if an actual lawsuit has to be filed in court, and the case is in actual litigation, then the fees will typically increase to at least 40 %.
Additionally, if the lawsuit is unable to be resolved and the case has to go to trial, then the percentage fees can go even higher.
The reason for the percentage increase is because once a lawsuit is filed, more time and expenses will be invested by the lawyer into resolving your case.
Working on contingency fee means that if the lawyer is unable to recover any money for your case, you as the client do not have to pay anything. The lawyer being compensated for their services is solely contingent on the lawyer being able to recover money for you.
Contingency agreements are very important because it allows people who may not have the financial resources to afford legal representation to obtain it. Typically, the personal injury lawyer you hire on your case will advance the costs and fees necessary to gather the information needed to resolve your case. These fees can add up financially depending on the complexity of the case, and are only recouped by the lawyer after he or she has resolved your case. This means that as a client, you will not have to pay out of pocket for costs associated with the legal representation of your case, including the hourly rate of the lawyer you hire.
Some examples of expenses and costs the law firm will incur in building up your personal injury case can include but are not limited to:
When retaining a personal injury lawyer, before signing any agreement, it is important to determine whether their percentage fee will be calculated either before or after costs and expenses are deducted out of the gross recovery. Understanding this distinction can make a big difference in the net amount you as the client take home.
For example, assume your attorney settles your case for $100,000, and your case has $10,000 worth of expenses. Now assume your attorney agreed to a 33% retainer.
If the legal agreement with your hired attorney provides that your lawyer will be paid before costs, then the following calculation will take place:
Total Gross Settlement: $100,000
Subtract Attorney fees: $33,000 (33% of 100,000 = $33,000)
$100,000 – $33,000 = $67,000 (Gross Settlement with attorney fees deducted)
Costs: $10,000
$67,000 (Gross Settlement with attorney fees deducted) — $10,000 (costs) =
$57,000 Clients Take home Amount
Now using the same numbers, assuming your lawyer gets paid after costs are deducted from the gross settlement:
Total Gross Settlement: $100,000
Costs: $10,000
Total Net Settlement = $90,000 ($100,000 – $10,000)
Subtract Attorney fees: $33,000 (33% of 90,000 = $29,700)
$90,000 – $29,700 = $60,300 (Client Takes Home)
As you can see from the above example, when the attorney’s fees are deducted after costs and expenses are deducted, for the same settlement amount of a $100,000 the clients take home is $3,300 dollars more. As such, it is very important to ask whether fees are deducted before or after costs.
At Tan Ngo Law, our attorney contingency rate is 33.33 % if we can resolve your matter prior to filing a lawsuit. If we have to file a lawsuit, our attorney contingency rate goes up to 40 %.
At Tan Ngo Law, our core values are the cornerstone of our practice. We recognize the immense trust our clients place in us, often during the most difficult times in their lives, and we are honored to offer our assistance.
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