Car Accident Insurance Claims

How Do Car Accident Attorneys Get Paid?

How Do Car Accident Lawyers Get Paid?

Injured in a car accident? Keep reading to learn how car accident attorneys get paid (and why you should hire one to represent you).

One of the most-common questions car accident victims have is, “How do car accident attorneys get paid?” This is an important question—because you know you need to hire an attorney, but you are also concerned about the costs involved. Fortunately, you can hire an attorney at no out-of-pocket cost; and, with the standard “contingency fee” arrangement, you pay nothing at all unless you win just compensation.

Continue reading to learn the answer to "How do car accident attorneys get paid", and to learn why you can recover more by hiring an attorney even taking his or her contingency fees into account.

Understanding How Contingency Fees Work in Car Accident Cases

Virtually all accident attorneys handle cases on a contingency fee basis. This means that the attorney only gets paid if he or she is successful in recovering just compensation—whether through a negotiated settlement or a verdict at trial. If your car accident insurance claim is unsuccessful, you pay nothing. If you receive a settlement or verdict, then your attorney’s fees are calculated as a percentage of your award.


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What is the Standard Contingency Fee For a Car Accident Claim?

While accident attorneys don’t necessarily follow “standards” when it comes to contingency fees, the market is competitive, and most attorneys charge the same rates. As a result, when you hire an attorney to help with your car accident claim, you can generally expect to pay:

  • 33 Percent – Most accident attorneys charge a contingency fee of 33 percent if they are able to negotiate a pre-trial settlement. The vast majority of car accident insurance claims settle. If your attorney charges a contingency fee of 33 percent and your net settlement (see below) is $100,000, then your legal fees would amount to $33,333.
  • 40 Percent – Most accident attorneys charge an increased contingency fee of 40 percent if they need to take a case to trial. Going to trial involves significantly more work, so the increased contingency fee is justified. If you receive a verdict resulting in a net award (see below) of $100,000 and your attorney charges 40 percent, then your legal fees would amount to $40,000.
  • 25 Percent – Some accident attorneys charge a discounted contingency fee of 25 percent. Frequently, this is done by attorneys who are new to practice and who want to build a record of successfully representing clients. When choosing an attorney to represent you, you will want to weigh the possibility of paying a reduced contingency fee against the possibility that you may be able to secure a higher settlement or verdict with the help of a more-experienced attorney.

However, there are other options as well, and you will want to make sure you have a clear understanding of how your car accident attorney will get paid.

As you may have noticed, we used the terms “net settlement” and “net award” in the examples above. In addition to deducting legal fees from your settlement or verdict, your law firm will deduct the costs that it advanced on your behalf as well (we cover costs in detail below). Most accident attorneys will calculate their contingency fees based on a “net” amount that reflects your total award minus your costs. However, some will calculate their fees based on the “gross” amount (the total amount of your award), which results in less money for you.

During your free initial consultation, you should feel free to ask about the attorney’s contingency fees, years of experience, and record of success both in insurance settlement negotiations and at trial. Your choice of attorneys is important, so you will want to be sure to make an informed decision.

What About Costs?

In addition to attorneys’ fees, there are other costs involved in pursuing a car accident claim as well. So, in addition to asking, “How do car accident attorneys get paid?”, it is also important to ask, "What are the costs involved in pursuing a car accident claim?" Typical costs involved in recovering financial compensation after a car accident include:

  • Investigator fees
  • Expert witness fees
  • Filing fees and other court costs
  • Research and trial exhibit preparation costs
  • Copying and printing costs
  • Postage, shipping, and courier expenses
  • Costs to obtain copies of police reports and medical records
  • Travel costs

These costs can add up, and they will often exceed what many car accident victims can afford to pay out of pocket. Fortunately, most accident attorneys will advance these costs on behalf of their clients. The firm will pay these costs as they are incurred; and then, similar to attorneys’ fees, these costs will be deducted from your settlement or verdict if your claim is successful. As discussed above, many (but not all) accident attorneys will deduct costs prior to calculating their contingency fees—ensuring that their clients keep as much of their settlements and verdicts as possible.

Many Lawyers Do Not Charge for Securing Collision, PIP, and MedPay Coverage

Another important fact about how car accident attorneys get paid is that many attorneys do not charge contingency fees for securing collision, personal injury protection (PIP), and medical payments (MedPay) coverage. Many attorneys offer this as a free service to help their clients get their cars repaired and to secure the “no fault” coverage to which they are entitled under their policies. During your free initial consultation, you should feel free to ask if this is something that the firm offers as well.

How Do Car Accident Attorneys Get Paid? These are Standard Contingency Fees

FAQs: How Do Car Accident Attorneys Get Paid?

Q: Do All Accident Attorneys Charge Contingency Fees?

It is difficult to say for certain; however, if you have a car accident insurance claim, you can expect to receive legal representation on a contingency-fee basis. A small number of law firms charge retainers to cover costs, but under no circumstances should you have to pay an hourly rate. If you are uncomfortable with the costs or fees you are being asked to pay, then you should feel free to consult with another attorney.

Q: Is it Worth it to Hire an Attorney After a Car Accident?

When many people ask, “How do car accident attorneys get paid?”, what they really want to know is, “Is it worth it to hire an attorney?” Attorneys have a reputation for being expensive; and, when you need help recovering your medical bills and other losses, you do not want to pay any more than necessary.

So, is it worth it? In a word, “Yes.” Not only can an attorney help prove your right to coverage, but your attorney can also accurately calculate your losses and fight to ensure that you receive the full compensation you deserve. As a result, even taking your attorney’s contingency fees into account, you are still likely to recover far more with an experienced attorney on your side.

Q: Will My Attorneys’ Fees Consume My Settlement?

No, under no circumstances will your attorneys’ fees consume your settlement. This is one of the most important things you need to know about how do car accident attorneys get paid. Since contingency fees are calculated as a percentage of your award (and are typically calculated on a “net” basis after deducting the costs of your claim), you will always receive compensation when you hire an attorney and have a successful claim.

Q: How Do Accident Attorneys Earn Their Contingency Fees?

In many cases, accident attorneys’ contingency fees will be in the tens of thousands (and in some cases the hundreds of thousands) of dollars. How do they earn these fees? Pursing a successful car accident claim is not easy. It requires skill, experience, and extensive legal and medical knowledge. It also requires a lot of work—most of which you will never see because your attorney will handle it behind the scenes.

It is also important to keep in mind that your attorney has a firm to run, so not all of the contingency fee is going straight into his or her pocket. Law firms need to keep the lights on and pay their employees, and they do this by charging a reasonable fee and fighting hard for their clients.

Q: Is it Possible to Negotiate Attorneys’ Fees for Car Accident Insurance Claims?

In addition to wondering “How do car accident attorneys get paid?”, many accident victims also want to know, "Is it possible to negotiate attorneys' fees for car accident claims?" Some lawyers will be willing to negotiate their attorneys fees for car accident insurance claims, and some will not. You should feel free to ask, but you should also not be turned off if an attorney says he or she needs to charge the firm’s standard rate.

Q: What if I am Not Happy With My “Take Home” Settlement Amount?

When you have a car accident claim, it is up to you to decide when to settle. There are several factors you should consider before you decide to settle, and you should not settle if you are uncomfortable doing so. If you receive a settlement offer, your attorney will calculate your “take home” amount; and, if you are not satisfied, you can keep fighting for more. If necessary, your attorney can take your claim to court in order to fight for the full compensation you deserve.

Get a Free Claim Assessment from an Accident Attorney Near You

Injured in a car accident? Get the help you need to recover the compensation you deserve. To discuss your claim with an experienced accident attorney near you, submit your claim online now.