How the Attorney Is Paid


The legal fee is a contingency fee, which means the lawyer receives no fee unless he or she collects money for you. The fee will be a fixed percentage of the total settlement or trial verdict. Most firms charge one-third of settlement and 40 percent of a trial verdict. The higher percentage in litigation reflects the extensive amount of additional work involved in a full trial. You may seek to negotiate a lower percentage. However, even with the one-third fee, hiring an attorney typically is a win-win proposition for the client and the lawyer.

Personal injury lawyers typically secure higher settlements than accident victims who try to handle their cases alone, without an attorney. To the extent that the lawyer’s actions and involvement increase case value, the lawyer pays his or her own fee. In most serious injury cases, the accident victim with a lawyer will receive more net money in hand even after the attorney fee is paid. For example, if the insurance adjuster refuses to pay more than $10,000.00 and you then hire an attorney who secures a $20,000.00 settlement, the one-third fee is justified—the attorney does all the work, and you net $13,333.33 after the attorney fee is paid. The Insurance Research Institute conducted a study on the value of attorney involvement, and they found that injury victims with attorneys collected, on average, three and one half times more than victims who handled their cases alone.

Hiring an attorney does not mean you must go to court. Attorneys always seek to settle injury cases privately. However, the attorney is working to increase the payout for the client. Attorneys increase settlement offers by validating your threat of suit, by knowing the true verdict value of your case, by properly interpreting and presenting your medical evidence, by securing more detailed medical evidence whenever necessary, by avoiding insurance defense tactics and payment avoidance traps, by proving the future effect of injury, by proving and collecting for future medical care costs, by controlling insurance communications, and by fighting with proper evidence to collect for all past and future income loss.

North Carolina lawyers are not allowed to pay expenses associated with litigation. However, most personal injury firms will advance all case costs. This allows the victim’s case to be properly developed with no early, up-front costs. For example, if an accident-reconstruction expert must be hired to collect evidence and establish fault, the client is ultimately responsible to pay for the expert’s fees. However, accident victims facing serious injuries and time out of work may not have the money to hire these experts. If the evidence increases case value, this early investment is fully justified. If the law firm advances the costs so they can be paid later from the settlement, your rights are protected immediately with no up-front charges.

Lawyers also earn their fee and increase your compensation by protecting your settlement from outside claims. Proper handling of settlement disbursal will make a huge difference in your net recovery. For example, if your health insurance carrier has a right to share in your settlement money, your lawyer should negotiate these claims and make sure they take the smallest possible share. The money your lawyer saves goes directly into your pocket. This applies to private health insurance and also to workers’ comp, Medicare, Medicaid, Tricare and military coverage, and health benefits paid through vocational rehabilitation programs. If you have no health insurance and your medical bills are due in full, your lawyer should take time to negotiate doctor bills down so you receive a larger share of the total injury settlement.

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