Injuries often bring medical bills, lost wages, and recovery costs. Many people delay calling a lawyer because they worry about legal costs.
Most personal injury lawyers use a contingency fee. This means you pay no attorney fees unless the case recovers money. The fee is a percentage of your settlement or verdict, not an upfront charge during the case.
Knowing how fees work helps you evaluate whether hiring a lawyer makes financial sense. It’s important to understand contingency fees, common costs, settlement deductions, and your likely net recovery.
Key Takeaways for Personal Injury Lawyer Fees
- Contingency fees mean no upfront payment—your lawyer gets paid only from your settlement or verdict.
- Standard contingency fees range from 33% before filing a lawsuit to 40% after litigation begins.
- Legal costs (court fees, expert witnesses, medical records) are separate from attorney fees and typically get reimbursed from your settlement.
- Under typical contingency agreements, you owe no attorney fees if there is no recovery.
- According to data from the Insurance Research Council, injured claimants represented by attorneys receive settlements 3.5 times higher on average than those without representation.
What Is a Contingency Fee?
A contingency fee means the attorney gets paid only if the case recovers money. Instead of billing you hourly or requiring payment upfront, your lawyer takes a percentage of the money recovered through settlement or trial verdict. If the case results in no recovery, you owe no attorney fees.
Why Firms Use Contingency Fees
Personal injury lawyers use contingency fees because most accident victims face immediate financial strain. Hourly rates (often $200–$500+) can be unaffordable during recovery.
Contingency fees align your lawyer’s interests directly with yours. Your attorney gets paid only when you do. A higher recovery results in a larger fee. This structure aligns incentives to pursue the strongest possible result.
Access Regardless of Finances
This structure allows access to legal representation regardless of current finances. You can pursue fair compensation without paying attorney fees during the case.
How Much Do Personal Injury Lawyers Charge?
Personal injury lawyers typically charge 33% to 40% of the recovery as the contingency fee. The percentage often depends on when the case resolves and how complex it is. Utah does not cap contingency fees, but most Utah personal injury lawyers charge approximately one-third (33%) if settlement occurs before suit and up to 40% if the case proceeds through litigation. The higher percentage reflects additional work, including court filings, discovery, depositions, and potential trial preparation.
Some attorneys use a sliding scale: 33% before filing, 35% after filing but before trial, and 40% if the case goes to trial.
Under Utah Rules of Professional Conduct Rule 1.5, attorney fees must be reasonable based on factors including time and labor required, case difficulty, skill needed, results obtained, and customary fees for similar services.
Examples
If a case settles for $100,000 before filing at 33%, the attorney fee is $33,000. If the same case settles after filing at 40%, the attorney fee is $40,000. For a $50,000 settlement at 33%, the attorney fee equals $16,500.
Questions about percentages or sliding scales? Call (801) 418-9797 or contact Parker & McConkie Injury Lawyers.
Understanding Legal Costs vs Attorney Fees
Many people confuse legal costs with attorney fees. These terms mean different things and get handled separately in personal injury cases.
Attorney Fees vs Legal Costs
Attorney fees are payment for the lawyer’s time and services. The contingency percentage covers your lawyer’s work investigating your claim, negotiating with insurance companies, filing court documents, and representing you throughout the case.
Legal costs are third-party expenses the firm pays during the case. Your agreement should explain how these are handled. Typical third-party expenses include the following:
- Utah district-court civil filing fees
- Medical record costs
- Expert witness fees
- Deposition costs
- Investigation expenses for things like photographs, witness statements, and surveillance footage retrieval.
Most firms advance these costs and reimburse them from your settlement or verdict. Your agreement should specify whether fees are calculated before or after costs.
How Cost Reimbursement Works
Most personal injury lawyers advance all case costs during your claim. You don’t pay these expenses as the case progresses. Instead, costs get reimbursed from your settlement or verdict at the end of the case.
Your contingency fee agreement should state how costs are handled. Many agreements specify that costs are reimbursed from the gross settlement before calculating attorney fees, though some agreements calculate attorney fees first.
What Comes Out of Your Settlement?
Understanding settlement deductions helps you calculate what you’ll actually receive. When your case settles or you win at trial, several items typically get paid from the recovery before you receive your check.
Typical Deductions
Start with your gross settlement or verdict amount (the total before deductions). First, case costs get reimbursed to your attorney for expenses advanced during the case. Second, the attorney fee gets calculated as a percentage of either the gross settlement or the settlement minus costs, depending on your agreement. Third, medical liens get paid from your portion of the settlement (repayment claims by insurers or providers).
Medical liens represent money you owe to health insurance companies, Medicare, Medicaid, hospitals, or doctors who provided treatment. Your lawyer may attempt to reduce these liens.
Example Calculation
Imagine your case settles for $100,000. Case costs totaled $5,000 for medical records, expert witnesses, and court fees. Your contingency agreement states a 33% attorney fee calculated on the gross settlement. You have $20,000 in medical liens.
From the $100,000 settlement, $5,000 goes to reimburse case costs. Then $33,000 goes to attorney fees (33% of $100,000). This leaves $62,000. From that amount, $20,000 pays medical liens. Your net recovery equals $42,000.
What Happens If You Lose Your Case?
Under a contingency fee, you owe no attorney fees if the case does not recover money. If your lawyer fails to recover compensation through settlement or trial, you don’t pay the contingency percentage.
Who Pays Case Costs
However, case costs may be handled differently depending on your agreement. Some agreements state that the lawyer covers all costs if the case loses. Other agreements state you remain responsible for costs even without a recovery.
Read your fee agreement carefully before signing. Ask directly: “If my case loses, am I responsible for any costs?” The answer should be clear and in writing.
Why Contingency Reduces Risk
Contingency fees reduce the financial risk of hourly billing. If you paid a lawyer $350 per hour and your case required 100 hours of work before losing at trial, you’d owe $35,000 with no recovery. Under contingency representation, you owe nothing for those 100 hours of attorney time.
Why Contingency Fees Benefit Injury Victims
Contingency fees might seem expensive when you see that 33% to 40% of your settlement goes to attorney fees. However, this payment structure provides significant advantages.
Access to Justice
Contingency fees allow anyone to hire quality legal representation regardless of income, savings, or credit. This levels the playing field when you face insurance companies with unlimited legal resources.
Aligned Interests
Your lawyer’s financial success depends entirely on your financial success. This alignment creates powerful motivation for your attorney to fight for the highest possible compensation.
No Hourly Billing Stress
With hourly billing, each call or meeting adds fees. Contingency fees remove the need to track billable time.
Better Outcomes Than Self-Representation
Research by the Insurance Research Council found that accident victims who hire attorneys receive settlement amounts 3.5 times higher than those who handle claims themselves. Even after paying attorney fees, represented claimants typically net more money than unrepresented claimants who keep 100% of smaller settlements.
Insurers recognize that attorneys understand claim valuation and negotiation leverage. They often make stronger offers to represented claimants.
What to Ask About Fees During Your Consultation
Most personal injury lawyers offer free initial consultations. Use this meeting to understand the attorney’s fee structure before signing any agreement.
Questions About Percentages and Costs
Use your consultation to get specifics in writing. Prioritize these questions:
- What percentage does the attorney charge and does the percentage change based on when the case resolves?
- Are fees calculated on the gross settlement or the settlement after costs are deducted?
- What costs does the attorney anticipate in your case and who pays costs during the case?
- Are you responsible for costs if the case loses?
Clear answers help you compare firms. Keep a copy of the proposed agreement for review.
Timing and Documents
Ask how long after the settlement you will receive funds. Ask when you will receive the written fee agreement and whether you can review it before signing. Ask the attorney to explain any terms you don’t understand.
A reputable personal injury lawyer welcomes these questions and provides clear, direct answers. Evasion of fee questions, pressure to sign quickly, or refusal to explain terms are red flags.
Red Flags in Fee Agreements
Most personal injury attorneys operate ethically and use fair fee agreements. However, certain warning signs suggest potential problems.
Fee Percentages and Clarity
Percentages above 40% are unusual in Utah and must be justified by factors such as extraordinary risk, appellate work, or unusually complex factual issues under Utah Rules of Professional Conduct Rule 1.5. Fee agreements should specify what costs you’re responsible for and when. Vague language about “reasonable costs” creates potential for surprise bills.
Pressure Tactics and Disclosures
Pressure to sign immediately without time to review is a warning sign. Utah requires contingency fee agreements to be in writing. Never agree to oral fee arrangements.
Expect Clear Explanations
Your lawyer should explain every provision in the fee agreement in plain English. If the attorney becomes defensive or dismissive when you ask questions about fees, find a different lawyer.
FAQ for Personal Injury Lawyer Fees
Can I Negotiate the Contingency Fee Percentage?
Contingency fee percentages are sometimes negotiable, particularly for high-value cases where large recoveries generate substantial attorney fees. For catastrophic injury cases potentially worth millions, attorneys might agree to reduced percentages for settlement amounts exceeding certain thresholds. However, standard personal injury cases typically use non-negotiable fee structures. The 33% to 40% range reflects industry standards, the risk lawyers assume, and the work required. Asking about negotiability is appropriate during your consultation, but understand that most lawyers maintain consistent fee structures for similar cases.
How Long After Settlement Do I Get Paid?
The timeline from settlement agreement to receiving your check typically ranges from 30 to 60 days. After you accept a settlement offer, the insurance company prepares settlement documents. You review and sign these documents with your attorney’s guidance. The insurance company then issues the settlement check, usually made payable to both you and your attorney. Your lawyer deposits the check into the firm’s client trust account. After it clears, you receive a settlement statement showing all deductions. After paying costs, attorney fees, and liens, your lawyer issues your check for the remaining balance.
Do I Pay Taxes on My Personal Injury Settlement?
Settlements for physical injuries or sickness are non-taxable under 26 U.S.C. § 104(a)(2). However, certain settlement components may be taxable. Punitive damages are taxable income even in personal injury cases. Interest earned on settlement funds is taxable. Your settlement agreement should clearly allocate the total between taxable and non-taxable components. Consult with a tax professional about your specific settlement.
Are Personal Injury Lawyer Fees Tax Deductible?
Attorney fees paid from personal injury settlements are generally not tax deductible because the settlements themselves are not taxable income. You cannot deduct expenses incurred to produce tax-exempt income. However, if portions of your settlement are taxable (such as punitive damages), the attorney fees allocable to recovering those taxable portions may be deductible. Tax treatment of attorney fees is complex and depends on specific settlement structure and current tax law. Never assume attorney fees are deductible without consulting a qualified tax professional.
What If the Insurance Company Already Made Me an Offer?
Insurers often make early offers before the full extent of injury is known. These initial offers typically undervalue claims. We can review any settlement offer at no cost during a free consultation. Do not accept or reject an offer until you understand your full damages and whether it fairly compensates you. Once you accept and sign a release, you typically cannot pursue additional compensation even if injuries prove more serious than was initially apparent.
Get Clear Answers About Costs for Your Case
Understanding how personal injury lawyers get paid removes one of the biggest barriers preventing injured people from seeking legal help. Contingency fees mean you access quality representation without upfront payment, hourly billing stress, or financial risk if your case loses.
Parker & McConkie Injury Lawyers uses a contingency fee for all personal injury cases. You pay no attorney fees unless we recover compensation for you. We advance case costs during your claim and provide a written fee agreement that explains what you will pay.
During your free consultation, we’ll explain our fee structure for your specific case, estimate potential costs, answer all your questions about payment, and provide an honest assessment of whether hiring an attorney makes financial sense for your situation.
Our Midvale office offers convenient access for injured victims throughout Salt Lake County. We handle I-15 crashes, State Street collisions, slip and falls, and all personal injury case types.
Call (801) 418-9797 or contact Parker & McConkie Injury Lawyers today for your free consultation. We’ll explain our fees clearly and evaluate your claim with no obligation.
