How Much Do Personal Injury Lawyers Take From a Settlement

How Much Do Personal Injury Lawyers Take From a Settlement?

A disturbing number of people injured by neglectful entities or individuals are discouraged from pursuing the compensation they deserve.

Some victims make the flawed assumption that it would be too expensive to hire a personal injury lawyer.

Despite the perceived cost of retaining legal counsel, you can get affordable legal help due to the fee structure of many personal injury attorneys. Rather than charging upfront fees, lawyers collect payment on a contingency basis.

Personal injury cases do not conform to a fixed timeline. Each case is unique, so there is no easy way to predict how long a case will take to settle. In almost all cases, you can expect resolution within a maximum of two years.

How do personal injury lawyers get paid, then, and how much will they take from your settlement?

Personal Injury Cases: Contingency Fees

Most personal injury lawyers will collect payment on a contingency fee basis. This is a pre-agreed percentage the attorney will take from your personal injury settlement after winning your case.

While you will not be paying out of pocket, contingency fees are not cheap. This reflects the substantial risk borne by the lawyer, as well as the lack of upfront costs.

How much can you expect to pay a personal injury attorney, then?

What Percentage of Your Personal Injury Settlement Does Your Attorney Take?

Expect to pay anywhere from 33% to 40% of your final settlement amount for legal representation. You could find that after expenses you get less of the settlement than the lawyer receives from the insurance company.

There is often some scope for negotiation, but you should bear in mind the overall amount you will receive relative to your needs and the risk-free nature of the transaction rather than concerning yourself with how much your lawyer is getting.

In most cases, attorneys draw up a fee structure on a sliding scale. The contingency fee thus varies according to the stage at which your case is resolved. If, for instance, your attorney sends a demand letter to the defendant early in proceedings and you could get a reasonable counteroffer from the insurer. After negotiations between your attorney and the claims adjuster at the insurer, you may reach a fair settlement without needing to file a personal injury lawsuit. In this event, your lawyer may agree to receiving less than the standard 33%.

If, on the other hand, your settlement doesn’t occur until after you file a lawsuit, your attorney is liable to get a higher percentage, nearer to 40%.

When cases reach trial stage, contingency fees can even notch beyond 40%.

The sliding scale nature of many contingency fees can be beneficial for you, but you should also take this into account when faced with any pre-suit settlement offers. Typically, the further your case progresses, the more of your settlement goes to your attorney.

How Does a Personal Injury Attorney Collect Their Share of the Settlement?

When you reach a settlement agreement, the court usually sends the check directly to your lawyer to ensure they are fully compensated for services rendered. They are then in the position to deduct their fees, pay any liens and outstanding bills and then send you the remainder of the settlement amount.

Other Costs Associated with Personal Injury Litigation

Be aware that contingency fees are not the only costs related to personal injury claims.

Your case requires comprehensive documentation to ensure a successful outcome, from depositions and trial exhibits to expert witness testimony and more.

All law firms will handle costs slightly differently, but you will find many attorneys deduct these costs along with filing fees from your final settlement amount when the case concludes.

You should speak openly with your lawyer at the start of proceedings. Get a clear idea of what you will be charged for, as well as how they will collect their share. The more you know about the process, the less chance of any unexpected surprises.

In most cases, personal injury attorneys will meet expenses and case costs as they arise, later deducting these expenses from your share of the settlement. You will seldom find a personal injury lawyer who expects reimbursement for these expenses when due.

Some of the most common expenses and costs associated with personal injury cases include:

  • Trial exhibits
  • Transcripts
  • Depositions
  • Investigators
  • Expert witness fees
  • Filing fees
  • Postage
  • Police reports
  • Medical records

If your case does not settle until close to trial, the costs can easily escalate to as much as 60% of your final settlement.

[LEARN MORE]: Is Your Personal Injury Settlement Taxable?

Managing Member at Uplift Legal Funding
Jared Stern is an experienced financial professional with six years of experience in the pre-settlement funding industry. After graduating from UC Berkeley with a degree in economics in 2014, Jared began his career in Morgan Stanley's mergers and acquisitions investment banking division. After working with another pre-settlement funding company for two years, Jared founded Uplift Legal Funding in 2017 to give injured plaintiffs a better choice in lawsuit loans. Check Jared out on: LinkedIn | Legal Reader | Attorney At Law Magazine
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