Whenever anyone is facing the possibility of filing a lawsuit (or worse, being sued), one of the first questions that will come to mind is, how much is this going to cost me? There is no cut-and-dried answer to that question because a lot of factors enter into how much your lawyer and lawsuit will cost. This article will consider some of those factors and the costs they create.
Initial Consultation and Case Evaluation
One piece of good news is that most lawyers will meet with you for an initial consultation and case evaluation at no cost to you. This position is not entirely altruistic on their part. Lawyers sell their time and their expertise. They usually aren’t interested in selling them in a losing cause.
At this initial meeting, the attorney will consider your case while you will evaluate your desire to work with this particular lawyer. A personal injury lawsuit can take a long time, and you will need to trust your lawyer and feel free to discuss and disclose almost anything at any time. This meeting is the opportunity for you to decide whether this is someone you can feel comfortable doing that with.
At the same time, the attorney will be looking over the materials you have brought with you and discussing the facts of your case. The attorney will ask you many questions about your case and how you would like to proceed with it. To help answer those questions, you should bring any relevant documents with you.
The makeup of these documents will vary, based on the nature of your case, but will likely include one or more of:
- Police or Accident Reports – These are usually available from the police or by order from your state. In New York, you must complete and mail Form MV-198C, Request for Copy of Accident. Report to the state. If an officer noted any criminal activity at the scene, you may obtain a Crime/Lost Property Report and submit it online or at any police precinct, Housing Bureau service area, or Transit Bureau district.
- Hospital Records – You should keep copies of all your invoices, receipts, and hospital records as you go along. If you do not believe you have them all, you should obtain copies from your hospital in hard copy or online.
- Medical Bills – As with hospital records, keep copies of all paid medical bills.
- Medication Receipts – Keep copies of all pharmacy receipts showing purchases made related to your injury.
- Earnings Records, if you anticipate a lost wages claim. Usually, Forms W-2 or 1099 will suffice for this.
- Witness Contact Information – It’s always wise to obtain as much witness contact information as you can get at the accident scene. This information may or may not appear on the Police or Accident report.
- Party Contact Information – You will also want to be sure to get all the contact information you can from all parties to the accident.
- Party Insurance Information – Similarly, you should get the insurance coverage information from all other parties in the accident.
- Copies of Photos or Videos Made at the Scene – You have a phone and probably used it at the scene to record the accident in photos or videos. Download copies for your attorney to review.
- Copies of Your Insurance Claims – Since your new attorney’s management of your case will depend on whatever statements you made in your insurance claim, you should be sure to provide a copy of any claims filed.
Depending on how extensive the documentation is, the prospective attorney will review and discuss these documents with you either now or after reviewing them.
Most state bar associations and canons of ethics require attorneys to use written retainer agreements with their clients. This agreement will lay out the terms and conditions of the attorney’s representation of you on this matter. It will outline the scope of the representation and provide details on how you will pay for the attorney’s fees. These payments may happen in various ways.
In general, the contingency fee retainer agreement must:
- Be in writing
- Be signed by the client
- State the method for determining the fee
- Percentage or percentages
- At settlement
- At trial
- At appeal
- What expenses will come out of the recovery
- Whether expenses come out before or after calculating the contingency fee
- Clear notice of any expenses client will have to pay regardless of the outcome of the case
At the end of the case, the attorney must provide the client with a written statement stating the conclusion of the case and, if there was a recovery, showing the amount the client received and how they determined that amount.
An hourly billing plan will set an hourly rate for each legal professional and paraprofessional who may work on your case. Generally, you will be billed in some portion of an hour, usually quarter hours or tenths of an hour. The law firm will generally try to use its resources efficiently by using lower-cost professionals on those tasks where their work is appropriate. You may have to put down a retainer, which is a lump sum against which a lawyer will charge your hourly fees and expenses, at which time you may or may not have to add more funds. You will likely receive an invoice every month. Expenses such as filing fees and any other firm out-of-pocket charges will also appear on your bill. Hourly billing is more common in cases other than those of personal injury plaintiffs. Personal injury lawyers handle their cases in a very different financial manner.
In England, a long time ago, it was against the law to commit champerty by “buying” a lawsuit or financing someone else’s litigation by taking an ownership interest in it. However, this type of proceeding eventually led to the 19th-century development of the contingency fee payment system.
In a contingency fee relationship, the attorney agrees to take a case without any upfront or ongoing fees. Rather, the attorney will receive a percentage of the settlement or award if the case successfully resolves. An attorney can arrange this percentage in several different ways. It may, for example, be a flat percentage of the final recovery, regardless of the stage of the case when the resolution occurs. On the other hand, some contracts vary the percentage based on the stage of the recovery, whether in negotiation, litigation, appeal, etc.
The fee may also be net or gross of any expenses and court costs. There are a lot of expenses aside from attorneys’ fees associated with litigation. There are a lot of costs involved, from things as trivial as photocopying fees to those as monumental as expert witness fees. Your contingency billing retainer fee agreement will explain which of those costs are in the contingency or if you will have to pay them whether you win or not. The agreement should also state whether the percentage will apply to your full settlement with the expenses subtracted from your remaining share, or whether expenses come out of the initial award. Then the percentage applies to the remainder.
It’s important to note that a contingency fee will usually be more advantageous than an hourly fee from the attorney’s perspective. From the plaintiff’s point of view, it is important to remember that contingency fees allow those whose assets would not ordinarily allow them to stand up to corporate bullies access to the courthouse. Their portion of the award is almost always higher than the firm would have received on an hourly basis.
In the American system, a client who loses a contingent fee case owes no bill if the case closes unsuccessfully. In the English system, the loser pays everybody’s legal fees. These facts go a long way to explaining why we are more litigious than the English. Thinking about paying the other side’s fees and your own slows down your run to the courthouse.
It’s also worth noting that there are still cases that may not happen on a contingency basis. Generally, attorneys may not enter into contingency fee agreements in domestic relations matters like divorces or criminal cases. Most states, including New York, have followed the American Bar Association Model Rules and prohibit contingency fees in these kinds of cases.
Lawyers cannot use contingency fees in family court because lawyers should focus on the best interests of their clients in those cases, not on their own financial interests. An attorney focusing on a fee could work in favor of the divorce rather than trying to achieve reconciliation or fairness.
Contingency fees are prohibited in criminal matters largely because there will not be an award to either party. Someone will be found guilty or not guilty; in neither instance will any money be awarded. Thus, there is no pot of money from which the lawyer can receive a percentage.
Moreover, however, these fee arrangements are prohibited because they may interfere with a lawyer’s ethical duty to represent the client zealously. Courts have long held them to be unenforceable, leaving a lawyer little ability to collect on such an agreement, and today they are also considered unethical.
Location, Location, Location
It is unfortunate but true that attorneys’ fees vary considerably based on geography. The highest fees tend to reflect those markets where attorneys earn the most, the East and West Coast, including especially New York and Los Angeles, and Chicago in the Midwest.
In New York City, a partner’s average billing rate might be over $700, while the average rate is virtually half that figure in the country as a whole. In some areas of the country, small-town lawyers may charge as little as $100 an hour.
One other significant factor in the cost of your lawyer is the prospective attorney’s training and experience in a given area of law. Very few lawyers have certified specialties in the way that doctors do. But, they do tend to concentrate their practices in more or less narrow sectors of the law. The years of practice in this area and the attorney’s track record in that sector will significantly impact the fee you ultimately pay for services. This issue is less of a factor in a contingency fee case, where the range by highly compensated and moderately compensated attorneys is not so broad. The fees range around a figure of approximately one-third of the award or settlement, but with variations in whether the share will be net or gross of expenses and whether it will change based on the stage of the claim in which a settlement or award occurs.
Is It Worthwhile to Use an Attorney?
Short answer, yes it is. Personal injury cases, even the most simple ones, are complicated and involve expert knowledge of the law and an in-depth understanding of the strategies to be used in negotiating or litigating a favorable result in your case. Insurance company lawyers are not your friends. They are in the business of trying to pay the least possible award for the greatest possible premium.
They will try to settle early before you can comprehend the full extent of your injuries. A lawyer who has worked in this system and perhaps even against these attorneys for many years brings that strategic knowledge and experience to your case, materially increasing the likelihood of the best possible settlement for you.
Contact a Bronx Personal Injury Lawyer for Help
Experience really does matter. Law is as much a matter of knowing the system as it is of knowing the law. An experienced and knowledgeable personal injury lawyer will be familiar with the courts and the insurance companies working in your area. That knowledge and expertise will contribute significantly to the ultimate success of your case. Contact a Bronx personal injury attorney today for an evaluation of your personal injury case.