When you are involved in a car accident, especially if you've got significant injuries or things are getting contentious with the other driver's insurance carrier, you're probably thinking about hiring a car accident lawyer. Your lawyer's role may be limited to getting the best possible insurance settlement, or he or she could end up representing you all the way through a court trial.
Either way, when you hire a lawyer, you enter into an "attorney fee agreement." Depending on the nature of the legal issue, fee agreements might be based on an hourly rate, a flat fee, or even a value-based rate. However, in the area of personal injury law, and car accident cases especially, the most common type of attorney fee agreement is one that is based on a "contingency fee." And one question that many potential clients ask is, "Is the lawyer's fee negotiable?" Read on to learn more.
In a typical contingency fee arrangement, the lawyer does not usually require that you pay any type of initial or up-front fee. Rather, the attorney agrees to take payment "only in the event" (i.e., the "contingency") that the attorney recovers money on your behalf, whether through an out-of-court settlement or a judgment. The attorney then takes a percentage of the overall recovery as the fee. Typically this fee rate ranges from 33% to 40%, though there is no hard and fast rule. Fee rates vary from state to state and even among attorneys in the same town.
Learn more about Contingency Fees in Car Accident Cases.
The attorney generally has complete discretion in setting the contingency fee rates. However, courts and bar associations in many states typically frown upon lawyers who set rates higher than 45% or 50%, and sometimes such exorbitant rates are banned entirely. Aside from that, there are generally few other limits on a lawyer's decision to set a contingency rate fee.
Some lawyers justify a higher rate, such as 40% or higher, by pointing to their experience level or rate of success in pursuing claims on behalf of clients. However, there are many successful and skilled personal injury attorneys who believe that an appropriate contingency fee rate should be only 33%, or even lower. What this means for you, as a potential client, is that you have some room for negotiation.
Just as you are anxious to find an experienced and skilled lawyer to represent you in your car accident case, attorneys are just as anxious to take you on as a client. A lawyer who doesn't have any clients is a lawyer who also doesn't have any income. The prospect of taking on a good case is important to any personal injury lawyer. This often means that you, as the potential client, are in a strong negotiating position when it comes to interviewing potential lawyers and determining which one you should hire.
If you find a lawyer that you like and want to hire, feel free to ask that attorney if there is room to negotiate on the fee. For example, if the lawyer presents you with a contract that calls for a 40% contingency fee, ask the attorney if the fee could be reduced to 35%, or even 33%. You won't know unless you ask the question, and the attorney may be quite willing to change the contingency fee structure.
However, keep in mind that a lawyer's decision to charge a certain percentage rate is based on a number of factors. From the lawyer's standpoint, there may be very important reasons why the contingency fee is set at a particular rate. If the lawyer believes that your case will be a difficult one to pursue, a higher rate might be justified. Your case might have particular facts or circumstances, or even unusual legal issues, that will require the lawyer to devote more time to your particular claim. Again, this might be a justification for a higher fee. On the other hand, if your claim is very straightforward, has a high likelihood of success, and has no unusual legal issues, this could be a valid reason to lower the contingency fee rate.
The bottom line is, you won't know until you ask. Remember that famous axiom: If you don't ask, the answer is always ‘no'. If the lawyer is unwilling to negotiate his fee, and you feel strongly that the attorney should do so, you can always decline to hire that particular lawyer. In that case, go down the street and interview another lawyer. There are many good personal injury lawyers out there.
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