How Do Personal Injury Attorneys Get Paid: A Guide

Personal injury attorneys get paid through various methods, including contingency fees and hourly charges.

In personal injury cases, payment for an attorney depends on whether they represent the plaintiff or defendant:

  1. Plaintiff’s-side lawyers often use “contingency fees,” taking their fee from the settlement or court award.
  2. Defendant’s lawyers usually charge hourly rates.
  3. In certain cases, the defendant’s legal fees may be covered by the insurance company.
How Do Personal Injury Attorneys Get Paid
How Do Personal Injury Attorneys Get Paid. Source (Reddit)

How Do Personal Injury Plaintiff’s Attorneys Get Paid?

Most plaintiff’s personal injury attorneys work on a contingency fee basis.

They only get paid if they win the case, typically taking around 33% of the settlement or court judgment.

Variations include:

  1. Mixed hourly/contingent: Reduced hourly rate with a contingent “bonus” upon winning.
  2. Sliding scale contingency: Fee percentage varies, increasing as the case progresses.
  3. Contingency hourly: Payment depends on the time spent, rare in personal injury unless attorney’s fees can be recovered from the defendant.

How Do Personal Injury Attorneys Get Paid When Representing Defendants?

Defense attorneys in personal injury cases typically bill by the hour. For instance, 32.5 hours at $350 per hour equals an $11,375 fee.

Hourly billing is common, but modified arrangements include:

  1. Retainer: Upfront lump sum held separately and withdrawn as work is done.
  2. Blended hourly: Blend of rates for different attorneys on the case.
  3. Hourly cap: Sets a maximum fee, even if more time is spent.

Who Actually Pays the Personal Injury Attorney?

For plaintiffs, attorney fees usually come from the defendant’s settlement or court-ordered payment in personal injury cases.

Defendants, if covered by liability insurance, get their legal defense and payout indemnified by the policy, including attorney fees. Without insurance, defendants must pay for an attorney themselves.

One Side Might Be Ordered to Pay the Other’s Attorney’s Fees

While uncommon in personal injury cases, there are scenarios in which the winning party may have to cover the opponent’s attorney fees.

Explore situations where the losing side might be responsible for the winner’s legal costs.

The Insurance Company’s Duty to Defend

Liability insurance policies, whether for vehicles, homes, or businesses, typically include a duty to defend.
This means the insurance company must provide legal defense to policyholders facing lawsuits related to covered events.
The Insurance Company Will Pay for the Policyholder’s Lawyer

The duty to defend is extensive, obliging the insurance company to pay for the policyholder’s legal defense, even if the claim might be within policy coverage.

The insurer usually covers the defense until it’s clear the case is outside the policy scope.

This duty can create conflicts as the attorney serves both the policyholder and the paying insurer. However, the attorney’s primary ethical duty is to the policyholder, not the insurer.

Next Steps After an Accident or Injury

Regardless of your injury’s cause, it’s wise to consult an injury lawyer.

While self-handling is an option, an experienced legal professional often yields the best outcome.