Contingency Fee for Personal Injury Lawyers

Hiring a personal injury lawyer after an accident raises immediate concerns about legal costs. Medical bills pile up, lost wages create financial strain, and adding attorney fees to these burdens seems impossible for many injury victims. Contingency fee arrangements solve this problem by allowing accident victims to hire experienced legal representation without paying anything up front. Under this fee structure, your lawyer only gets paid if you win your case, making quality legal help accessible regardless of your financial situation. 

How do contingency fees work, what do they cover, and what should you expect? Knowing this helps you make informed decisions about legal representation. The personal injury attorneys at Stewart Law Offices represent clients throughout North Carolina and South Carolina on a contingency fee basis.

How Contingency Fee Arrangements Work

A contingency fee means your attorney’s payment depends entirely on successfully recovering compensation for you. You pay nothing to hire the personal injury lawyer, nothing while the case progresses, and nothing if the case doesn’t result in recovery. Your attorney receives payment only when you receive a settlement or verdict award. According to the American Bar Association, contingency fees typically range from 1/3 to 40% of the total recovery. The attorney takes an agreed-upon percentage from the final settlement or jury award as their fee.

While no statute caps contingency fee percentages for most personal injury cases in North Carolina or South Carolina, professional ethics rules require that all fees remain reasonable. The North Carolina State Bar Rule 1.5 governs attorney fees and requires lawyers to consider multiple factors when setting contingency percentages. 

Factors influencing the fee include the time and effort required, the novelty and difficulty of the legal issues, the necessary skill, the attorney’s opportunity cost, customary local fees, the amount at stake, results, time constraints, the attorney-client relationship, and the attorney’s experience and reputation.

How Contingency Fees Benefit Injury Victims

Contingency fee agreements offer significant advantages to injury victims seeking high-quality legal representation. This payment structure ensures fairness and aligns the interests of the client and attorney.

Key Benefits:

• Equal Access to Justice: For most injury victims, the financial burden of hourly attorney fees is prohibitive, especially when coupled with medical costs and lost wages. Contingency fees remove this financial barrier, guaranteeing that anyone can hire an excellent lawyer, regardless of their current financial status.
• Aligned Interests and Motivation: Under a contingency arrangement, your attorney only receives payment if you secure a settlement or verdict. This directly aligns the lawyer’s financial success with yours, providing a powerful incentive for them to maximize your recovery. Because they bear the risk of investing resources and time with no guarantee of payment, attorneys are motivated to build the strongest possible case.
• Worry-Free Communication: Contingency fees eliminate the stress associated with hourly billing. You can communicate with your attorney via phone, email, or meetings without the constant anxiety that every interaction is adding to an escalating legal bill.
• Simple, Manageable Payment: You never have to pay your attorney directly out of pocket. The agreed-upon percentage fee is deducted automatically from the settlement or verdict funds before you receive your payment, making the arrangement financially manageable and simple.

Expenses and Costs Beyond Attorney Fees

Contingency fee agreements cover attorney compensation, but case-related expenses operate differently. These costs can accumulate quickly and may include court filing fees, charges for obtaining medical records and police reports, expert witness fees, deposition costs, investigator fees, and travel expenses for case-related activities.

Some law firms advance all case costs and deduct them from the final recovery. Others require clients to remain responsible for costs regardless of outcome. This distinction matters significantly, especially if your case doesn’t succeed. Review your fee agreement carefully to understand exactly which expenses you’ll owe and when payment becomes due.

Many personal injury firms, like Stewart Law Offices, typically advance case costs without requiring upfront payment and then reimburse themselves from the settlement or judgment. This approach ensures that financial constraints don’t prevent your attorney from building the strongest possible case.

Transparency Requirements in Fee Agreements

Professional conduct rules mandate clear communication about fees. Contingency fee agreements require a written contract, which the attorney must provide to the client either before or soon after commencing representation. This contract is crucial for transparency, as it must clearly outline the lawyer’s percentage based on the case’s outcome (e.g., settlement, trial, appeal).

Additionally, the agreement must detail how advanced costs and expenses will be managed and clarify whether the client remains responsible for these costs even if the case is unsuccessful.

Upon the case’s conclusion, the attorney is obligated to furnish the client with a written statement. This statement must itemize the total recovery amount, all calculated costs, the resulting legal fee, and the client’s final net recovery, ensuring the client has a full understanding of the financial outcome.

When Contingency Fees Are Prohibited

Not all legal matters permit contingency fee arrangements.

North Carolina and South Carolina prohibit contingency fees in criminal defense cases. Defendants facing criminal charges cannot pay their attorneys a percentage of the time they avoid spending in jail or the fines they avoid paying.

Domestic relations matters generally also prohibit contingency fees. Attorneys cannot charge contingent fees for obtaining divorces or for calculating alimony, child support, or property division amounts.

These restrictions exist because basing attorney fees on these outcomes creates problematic incentives and conflicts with public policy.

Common Types of Attorneys’ Fee Arrangements

To best serve their clients, lawyers use various fee arrangements that often depend on the nature of the case. A comparison with other fee structures clearly demonstrates the benefits of using contingency fees.

• Hourly Billing: This common method requires you to pay your attorney for every minute spent on your case, including emails, calls, research, document review, and court time. Rates often fall between $200 and $500 per hour or higher. You must pay these costs, which can reach tens of thousands of dollars, regardless of the outcome of the case.
• Contingency Fees: This structure removes the burden of upfront payments and transfers the financial risk to the attorney. This makes legal representation accessible precisely when you need it most.
• Retainer Fees: A retainer payment is an advance for legal services, and the agreement should explicitly detail its purpose. These upfront payments can be structured in a few ways:
  • A Deposit: Funds are placed in a trust account, and the attorney bills against this deposit as work is performed.
  • A Flat Fee: A single payment covers the entirety of a specific legal representation.
  • A Reservation Fee: A payment made simply to ensure the attorney’s availability.

The agreement must clearly explain how the money will be used and specify whether any remaining, unused portion will be refunded.

Contact Our Personal Injury Attorneys

If you suffered injuries in North Carolina or South Carolina and have questions about contingency fee representation, Stewart Law Offices provides experienced legal guidance. We handle personal injury cases on a contingency basis, meaning you pay nothing unless we recover compensation for you. Call 866-783-9278 or contact us online for a free consultation about your case. We’ll explain our fee structure clearly and answer all your questions before you make any commitment.