November 13, 2009 (Original publish date) • By Dennis Beaver
“Is there any way to get help from an attorney in handling a personal injury case without having to pay a contingent fee of one third or more?
“My wife works for a personal injury law firm and tells me about the enormous amounts of money attorneys earn for just making a few phone calls. Am I the only person who thinks this can be excessive and unjustified compensation? I’ve read your column for years and know that you will tell it like it is, and probably do not worry about upsetting some other lawyers. Thanks, Steve from Visalia.”
Steve is not alone in his beliefs, and, yes, there is a way to obtain a lawyer’s help in handling your own personal injury case — from a minor accident all the way to a wrongful death case-without having to pay out from 25 percent to 50 percent.
Is the contingent fee truly contingent?
The contingent fee is the way virtually all personal injury lawyers are paid. If the lawyer takes your case, attorney fees are a percentage of the amount recovered, usually one third to one half: No recovery, then no fee.
The reason generally given in support of having a contingent fee system is so that people who do not have the money to hire an attorney can still get access to the justice system.
With very little time spent, lawyers can make a great deal of money, and with the right case, thousands of dollars an hour — $5,000, $25,000 even more — much more. Yet, it is possible for a lawyer to spend a huge amount of time and out-of-pocket expense, lose the case and wind up with nothing. It’s a calculated gamble, but one in which the odds are certainly in favor of “the house,” as it’s up to the attorney to decide if the case will be taken.
I discussed my reader’s question with Lester Brickman, professor of law at the Cardozo School of Law in New York and with Professor Richard Painter of the University Of Minnesota School Of Law. Both are experts on contingent fees, when appropriate, and where they become excessive and unjustifiable.
“Where lawyers carefully select cases they’ll take, the fee isn’t really contingent, as a recovery is virtually certain, making the risk of not getting paid extremely low.”
“The contingent fee is justified in a hard-to-win case, one where liability could be difficult to prove and expensive. So, where an attorney has a real risk of receiving no fee, then it is reasonable to be paid a premium — a contingent fee — for taking on that risk.”
“But in cases where liability is clear and the risk of no recovery almost zero, contingent fees are often excessive, when put in terms of dollars earned per hour,” they maintain.
What can you do?
Consider these two common situations:
You’ve been given a settlement offer from an insurance adjuster, are discussing it with friends and family, and have been urged to hire a lawyer because “Everyone knows that a lawyer can get you more money than you can ever get yourself.” So, with money already on the table, you hire an attorney on a contingency fee basis of one third.
But your lawyer can’t get any more money out of the insurance company! Is it fair to lose that one third? Professors Brickman and Painter provided these recommendations:
“Write into the retainer agreement that the lawyer will be paid a contingency fee on the increase obtained for you, so that if not much more is offered, you aren’t being punished for hiring an attorney.”
Few lawyers will agree to that, which is a pretty good indication of what you need to do. Take the money and run!
And, since lawyers give advice, why not simply pay for the advice you need to settle the case on your own, or hire the lawyer on an hourly basis. With the average fender-bender, there is usually no need for an attorney. If you are willing to say, “I will pay you to walk me through how to handle the settlement process,” ethical, caring lawyers will indeed say sure!
Run the settlement offers you receive by the attorney, get coached on how to respond. You’ll likely put a lot of money in your pocket that would otherwise go to an attorney for doing the same thing as what you just accomplished.
Over the years, in my law practice, I’ve done very well with the contingent fee system. But today, I would rather charge a client for an hour or two of my time, instead of taking thousands of dollars in a “contingent” fee, which isn’t contingent at all.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.