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How Are Car Accident Lawyers Paid?

All personal injury lawyers, and this includes car accident attorneys, may charge clients hourly billing rates or on contingency basis, the latter being the predominant practice.

Contingency Basis

A contingency fee is what you pay a car accident lawyer when your case is successful and you receive compensation from the defendant. If you get no compensation, then you pay no legal fees.

Contingency fees are often determined as a percentage of the total sum you will receive after a settlement or court verdict. There are lawyers who will take a portion of your gross award, meaning, the full sum without deductions, while others will others will take a part of your net award, or the remaining sum after expenses are removed from your total award. Percentages are not the same for all regions, and you may be able to negotiate for a smaller percentage rate with your car accident attorney. All negotiations, if any, must take place prior to contract signing.

Additionally, if you win money, you’ll also have to reimburse your attorney for any costs incurred while working on your case (copying fees, filing fees, etc.). When attorneys work on contingency, they will usually waive expenses if they were unable to win or settle the case.

The good thing about contingency fee arrangements is that you don’t owe the attorney anything if you do not receive any compensation. Because the two of you will gain financially, they will most probably be as motivated as you to secure the biggest possible settlement or judgment. This is one of the reasons car accident lawyers will usually decline cases that are weak based on their evaluation. If they accept a weak case and get paid on contingency, they risk losing money.

Hourly Rates

Sometimes, lawyers will offer to work on a car accident case for a per-hour fee. That means you will still pay the attorney for all the time they spend on your case, whether or not your case plays out well. Whether you lose a case in court or failed to settle amicably with the other party or their insurance company, you pay your lawyer.

Although contingency arrangements are more commonly practiced by car accident attorneys, hourly billing is not that rare either. And typically, if an attorney takes a case for hourly billing, it’s because they think it is weak. You’ll likely have to think twice about hiring a lawyer or just accepting the insurance company’s settlement offer. At the end of the day, whether you pay an hourly or contingency fee, you’d like to make sure you’re with the right person to begin with.

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