What is a Contingency Fee?

Mark and Adam Melrose, NC Personal Injury Attorneys

Transcript for the Video:

If you’ve ever been on the internet or listened to any television ads for a personal injury lawyers I’m sure you’ve heard the catchy phrase of “You don’t owe our firm a fee unless we win your case.” 

How exactly does this type of fee work? How can these lawyers stay in business if you don’t have to pay them up front for their time? Today I’ll explain the basics of the contingency fee structure, so that you know what to expect if you need to hire a personal injury lawyer to obtain compensation for injuries. 

Put simply, a contingency fee is a fee that is “contingent,” or predicated, on a successful resolution of your personal injury claim. You and the lawyer are entering into a contract where the lawyer promises not to charge you for his time if he is unsuccessful in pursuing your claim. 

Contingency fees are always based upon a percentage of the overall recovery that the lawyer makes on your behalf. The most common percentage for car accident cases is a 1/3 contingency fee. This means that the lawyer will get 1/3 of the total recovery made against the insurance company or other responsible party. 

Let me give you an example of how this works in practice: Let’s say that you’re injured in a collision between your car and a tractor trailer, and you suffer a broken leg. Your personal injury attorney successfully settles with the truck’s insurance company for $90,000. Sounds like a successful result! 

Then, the attorney takes the $90,000 total settlement and applies his 1/3 contingency fee to the total sum. The lawyer will be entitled to $30,000 for his time and expertise, leaving $60,000 left on the table. 

Personal injury lawyers also routinely advance the actual expenses of litigation and recoup this money at the end. Let’s say the case resolved without too much of a struggle, and the law firm only had to advance $1,000 to successful pursue your case. There’s now $59,000 left. 

Finally, depending on your health insurance plan, you may need to pay back a portion of your medical expenses. Good personal injury law firms will try to reduce this repayment of medical expenses as much as possible. Let’s say your attorney is good at his job, and manages to reduce your medical bills from $25,000 to $9,000. 

This $50,000 remaining is your actual recovery for the injuries you sustained in the car accident, and the law firm will write you a check for the total sum of $50,000. 

That’s all there is to it! If you’ve been injured as a result of someone else’s negligence please do not hesitate to contact our law firm of Melrose Law at www.mountainverdict.com, or at (800) 222 – 2430 


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$3.025 Million settlement by Mark R. Melrose and co-counsel in a medical malpractice case for 40 year old man who suffered a devastating stroke after his surgeon failed to diagnose the cause of his bowel infarction. The doctor failed to read the echocardiogram which had clear evidence of a blood clot. This clot then broke apart and caused the stroke.

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