I’m often asked how much I charge and how that compares to other attorneys. In this video I answer that question.
Hello. My name is Nelson Abbott. I’m an attorney at Abbott Law Firm in Provo, Utah and today I wanted to talk about how much does it cost to hire a personal injury lawyer. I have the most experience about my own fee so I’ll mostly talk about that but I do have some experience with other attorneys’ fees because sometimes clients might switch from another attorney to me and I’ll see what the prior agreement was or sometimes people will even show me after they’ve settled the case what their attorney charged.
One Third Contingency Fee
So most attorneys in automobile accident cases charge about pretty close to the same fee and generally that’s a one-third contingency fee. So what is a contingency fee? Well, contingency fee means I will never ask you to reach into your own pocket to pay me anything. Not costs, not fees, nothing. The only way I get paid is if I’m successful in making a claim and collecting that claim for you. So that’s what a contingency fee is and that’s super common in the automobile accident niche of the market or segment of the market I guess I should say. From there the differences between attorneys is greater. It’s pretty standard in the industry to have that fee go from one-third to 40% at some point. I’ve seen a lot of attorneys say that they’ll raise the fee to 40% if they file a lawsuit. I’m a little more generous to the client in that regard. I don’t raise the fee to 40% until we hit the pretrial conference which is about a month before trial. So that gives us…that really means for the most part I’m not charging a 40% fee because most cases settle. Even if we file a lawsuit most cases still settle before trial. So it’s pretty rare that I’ll charge a 40% fee. The reason I do charge a higher fee at that point is going to trial is a ton of extra work on my part and so I increase the fee in order to compensate myself for all of that extra work that’s going to be required to go to trial.
Out of Pocket Costs
The other thing most attorneys ask is to be reimbursed for out of pocket costs. That’s pretty standard in the industry and I’m no different in that regard. Some attorneys…there’s a growing trend I’ve seen. Some attorneys will charge like a flat fee. For example, if you’ve ever gone to buy a car you go to buy the car and they might charge you $450 documentation fee. Well, attorneys do something very similar to that. They’ll charge a flat fee just for signing up. So it doesn’t matter how much the case settles for, it doesn’t matter what their out of pocket costs are. There’s just a fee to that and they might label it different things but really that’s just a fee. It’s just an added fee. I don’t do that so I’m a little different than other attorneys in that regard.
Free Services
And the other difference is what do attorneys actually charge the fee on. I think the most common thing I’ve seen is they charge the fee on collecting money due to somebody’s negligence. So it doesn’t matter whether it’s on the BI portion of policy, the UM, the UIM portion. It’s pretty standard. Attorneys will take a contingent fee on money coming in from that portion of the policy. I’ve seen some attorneys charge fees on PIP but there’s an ethics advisory opinion from the 1990s I believe is when it came out that says that’s…in most cases that’s unethical. The only time an attorney is allowed to charge a fee on PIP…well, at least a one-third contingent fee on PIP is if they’ve done a lot of work to help collect that. And that’s rarely the case. In most cases, it’s a matter of just getting ducks in a row. So we fill out the proper paperwork, get the proper records, send it to the insurance company and the PIP payments start getting made. So rarely do we charge anything on a PIP claim.
Lien Reductions
The other things I’ve seen that might differ between attorneys is I’ve seen some attorneys, let’s take a hypothetical example, let’s say they settle a case for $100,000. Well, there might be somebody out there with a lean for $30,000. So on a $100,000 settlement the attorney would charge…if they’re charging one-third that’d be $33,333. But let’s say there’s a $30,000 lean out there and the attorney is successful in getting that reduced from $30,000 to $20,000. Now the attorney…I’ve seen some attorneys that will charge an additional $10,000 on that lean reduction. So now they’ve…their fee has gone from $33,000 to $43,000. I don’t do that. I think the one-third…in my mind, the one-third fee that I charge includes my efforts to get leans reduced and the fact of the matter is it depends on the type of lean and the situation involved but a $10,000 fee to get that lean reduced is usually excessive. That…I wouldn’t say that’s always true but that’s normally excessive.
So I think…I guess in some the fees are pretty standard, at least in Utah where I practice across…and in automobile accident cases but there are some minor things that some attorneys do that might actually increase the amount of the fee at the end of the day. And then I guess I’ll just briefly mention other types of cases. There’s other types of personal injury cases. There’s products liability. There’s drug cases which is just a subset of products liability. There’s medical malpractice. There’s premises liability. Those fees are less standard and so those vary more from attorney to attorney and usually it’s higher fees because those cases can be more complex and more difficult.
So that’s a little bit of information. I hope that helps answer some questions. My name again is Nelson Abbott at Abbott Law Firm and we’d love to talk to you, get to know you and if you have a personal injury claim, we’d love to help you get that resolved. Thanks for listening today.