Benefits of a tiered contingency fee in personal injury cases

by | Nov 24, 2014 | Firm News | 0 comments

Many personal injuries attorneys charge a flat 40% contingency fee. This means that the attorney will receive 40% of the client’s recovery, regardless of whether the case is settled prior to filing a lawsuit, a settlement is reached before trial, or the client is awarded a monetary judgment at trial.

I do not believe that a 40% flat contingency fee is fair to the client. The attorney’s compensation should be based upon the amount of work that he or she performs. That is why I have a tiered contingency fee, ranging from 33.33% for a settlement reached without litigation to 40% for a judgment awarded by a jury.

The 33.33% contingency fee provides a strong incentive for a client to engage in meaningful settlement discussions prior to filing a lawsuit. I recently represented a client who had suffered extensive soft tissue injuries in a motor vehicle accident. We were able to settle the case for $200,000 without filing a lawsuit. The client received $133,333 ($200,000 X 2/3rds) of the settlement. If the case had gone to trial, she would have had to receive a $263,888 jury verdict to recover an equivalent amount ($263,888 X .60 – $25,000 in expected litigation expenses = $133,333).

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