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Comparing Contingency Fees vs. Hourly Fees for Personal Injury Lawyers

When clients approach a personal injury lawyer in Clermont, Florida, they may already be experiencing emotional trauma and physical injuries. Oftentimes, this happens to be the worst phase in their life. Such personal injuries range from sprains and broken bones, to traumatic brain injury and organ damage that impact their life and finances. During this time, the last thing the client would expect is to worry about the type of fee arrangement used by personal injury lawyers in Florida and if they can afford professional legal assistance.

With respect to personal injury cases, attorneys use several different ways to charge their clients for the legal services offered by them. Each payment type has its own pros and cons in relation to the lawyer and client.

Contingency Fee Arrangement

The most common payment method for charging legal fees in personal injury cases is via a contingency agreement, which is a written contract between the lawyer and client. According to this contract, the client can hire a lawyer without paying anything upfront – or in the form of monthly payments as the personal injury case continues – and the lawyer gets their payment from a percentage share of the compensation awarded to the client after the completion of the lawsuit.

Before the client hires the lawyer, a contingency fee agreement must be put in writing, stating how the fee would be determined and the percentage share that the lawyer would receive – whether the case gets settled outside of court or goes to trial, and whether expenses like expert testimony charges, court fees, and travel costs would be included or excluded from that percentage share.

The contingency fee method is beneficial to those personal injury victims who do not have money to pay the attorney’s fee at the beginning of the case. Another significant advantage is that the client does not have to pay anything to the lawyer if they lose the case, unless the agreement particularly mentions that the client needs to pay some specific costs. Furthermore, a lawyer is more likely to work hard on the personal injury case to bring about a favorable outcome and get paid.

Contingency Fee Arrangement - MAGLA, PLLC

Having said that, there are a few downsides to a contingency fee agreement for clients. Many times, it could be tough for the victim to find a personal injury attorney in Clermont, Florida who is ready to take their case on a contingency fee basis if the lawyer the lawyer (after reviewing the case) finds that there is less likelihood of winning the case and subsequently getting paid for their effort and time. Plus, there is no definite way to know how long an injury case would take to resolve. Clients often get frustrated if their case — in which they thought that their case would

take a year to settle – gets settled in just a week’s time, and they still need to pay their lawyer the mutually agreed upon percentage of the compensation as per the fee agreement.

Agreeing to a contingency fee arrangement can be advantageous and disadvantageous to an attorney. If they accept a personal injury case in Florida on a contingency fee basis, they are likely to make way more money vs. charging the client hourly. However, at the same time, they also run the risk of investing money and time and still losing the injury case — or winning a case that took longer than expected and failed to bring the compensation to the client they initially estimated.

While deciding whether or not to take a personal injury case on a contingency fee basis, a lawyer may consider some factors, including the likelihood of success (this is beyond winning or losing the case as the lawyer’s fee is a percentage share of the compensation awarded to the client), the amount in damages at stake, how long it would take to get a favorable outcome, fees the lawyer is required to pay upfront, the time it would take the client to get compensation after the case is settled, etc.

Hourly Fee Arrangement

A second payment method for charging fees for personal injury cases in Florida is an hourly fee. An hourly fee is quite straightforward, and it is mutually determined and agreed upon by the lawyer and client before the lawyer starts working on the injury case. The fee may vary from client to client, based on the case’s complexity and the standard charges in the community.

It is best for the client to get an estimate of the time of work from their lawyer prior to signing the contract with the lawyer. When a client agrees to an hourly fee agreement, they are billed in increments as per the agreement — by the hour, 30 minutes, 15 minutes or even every 10 minutes. This means, every time your hired lawyer works on your personal injury case, meets you in person for advice, calls you, or attends your phone calls, your attorney will charge you for the time spent on you or your case.

In cases where the client agrees to an hourly fee agreement, the lawyer will likely be way more inclined to pursue the personal injury case. Plus, if the client could manage to pay on an hourly basis, they will only need to pay for the amount of work done by the lawyer, regardless of the time taken to settle the case. Moreover, the lawyer will likely not receive a lot of money, once the case settles. However, this fee agreement is not an option for those personal injury victims, who do not have the money to pay a lawyer upfront.

Hourly Fee Arrangement - MAGLA, PLLC

A personal injury lawyer in Clermont, Florida benefits from charging clients on an hourly basis as they will be paid, regardless of the outcome of the case. Moreover, the lawyer will receive the payment in a consistent manner, instead of getting a lump sum that might take weeks, months, or years to realize. This is important for small personal injury law firms in Florida that might not

have enough funds to cover all the upfront costs of a personal injury case with a contingency free agreement.

Some personal injury law firms take a different approach to charging their clients: a blend of hourly fees and contingency fees. The lawyer would offer to work on the personal injury case at an extremely lower hourly rate, together with a lower than their regular success-based contingency fee.

This arrangement benefits both the client and the lawyer since they both have stakes in the case. This makes it easier for the client to pay for the lawyer’ services – and the lawyer also is not at risk of not receiving anything if they lose the case. If the case’s outcome is not favorable, the hourly rate would still help the law firm cover the necessary expenses. If the attorney manages to bring a favorable outcome, both the lawyer and the client would get a percent of the compensation.

To Conclude

In personal injury cases where legal assistance is imperative, both the client and the attorney should focus on their best interest. The client should assess what fee arrangement is right for their specific situation.

However, the most favorable agreement is one in which the client gets suitably compensated for their losses, and the lawyer gets amply paid for their effort in bringing a favorable outcome for the case.