Most things in life are negotiable, including lawyer fees. In general, law firms would rather have your business, even at a discount, than lose out to their competitors.
Even though most plaintiff’s personal injury lawyers charge a contingency fee, rather than an up-front retainer, most of the time, it doesn’t hurt to ask for a discount if you’re looking for financial stability after an accident.
Here is what you should know about negotiating personal injury lawyer costs.
Different Fee Arrangements
Different offices may offer different options for fee arrangements. Here are some common alternative legal fee arrangements you may find.
This is the standard fee arrangement in personal injury law firms. Before a lawyer takes the case, the client agrees to pay a percentage of whatever is recovered through settlement or jury verdict, plus the attorney’s costs, which can include costs for expert witnesses, court filing fees, and postage. Once the law firm receives the settlement or verdict money, they will deduct their fees and costs before remitting the balance to their client.
Most firms will charge somewhere around 33% of what is recovered, plus costs if the case is settled before it goes to trial. Some firms, but not all, will automatically charge a lower percentage if a case is settled early before a lot of time and effort is expended. These percentages could be as low as 20 or 25% of the total recovery. If the firm does not automatically offer this discount, you could ask for it.
You could also reach an agreement with your attorney in advance that you will accept an amount of at least X in a settlement in exchange for a lower contingency rate. This might be acceptable to a firm because they know the minimum dollar amount they would receive for their time and effort.
You may also be able to negotiate a discount on costs, although items like court filing fees may not be negotiable. The attorney might agree to have you pay the costs out of pocket as they occur, rather than deduct them from your eventual settlement.
Retainer and Hourly Rates
Another way to potentially reduce your personal injury lawyer’s fees are to pay your attorney an hourly rate. You could agree to hire the attorney for a few hours’ worths of work at a certain rate. This may not entirely resolve your case, but it could be enough time to get the ball rolling so you can wrap up the details.
If the personal injury attorney agrees to this arrangement, you may need to agree to an upfront retainer that the attorney will bill from. You may be able to negotiate the total amount of the retainer, but you should only enter into this type of arrangement if you know you will pay the attorney their full fee.
Not every law firm is willing to accept this type of limited arrangement. Once an attorney tells other law firms, an insurance company, or the court that this attorney is representing a particular client, it can be harder to withdraw from representation down the road. Attorneys are also worried about malpractice claims if they were unable to provide their full advice to clients who only pay them for a few hours’ worths of work.
Also, while it may seem like a good deal to pay an attorney for 2-4 hours of work on a case, the attorney may not be able to work as quickly as you think. It can take time to go through medical records and police reports, which may eat up your retainer before your attorney can do anything else.
Tips for Successfully Negotiating a Fee Arrangement
First, if you want to negotiate a fee arrangement, you need to ask for a discount and be prepared to make a counteroffer with what you’d like to pay for. This could be a lower contingency percentage, hourly payments to send out demand letters and make a few phone calls, or something else.
While the attorney may not agree to your initial counteroffer, once the attorney knows what your ballpark is, they’ll have a better idea of what they can do within the range you’re looking for. Remember – the time to negotiate fees is before you sign a contract with the law firm, not after they’ve made headway into your case.
Second, be polite to everyone at the office. A law office is much more likely to work with you on the fees if you’re respectful to the receptionists and courteous to the paralegals working on your case. While we understand that you may be stressed, scared, and in pain from your injury, it’s much easier for a firm to say “yes” to people who are polite than to people who are abrasive and rude.
Third, be organized and have your papers in order. If you do the legwork of pulling the police reports, medical records, and other important papers before meeting with the lawyer to discuss your case, you might be able to reduce the amount of time the firm needs to spend on your case. If they spend less time doing the initial fact-finding, they may have lower costs to pass on to you.
Finally, be prepared to accept “no” for an answer. No matter how great your case looks, your personal injury lawyer may not be able to give you a discount. We are people with families and staff we need to support. As much as we want to take on a case and help somebody, we may not have the bandwidth to do so at the price point our clients can pay.
Although one study showed that people who work with personal injury lawyers receive more compensation, even with the lawyer’s fee taken into consideration, not everyone can afford to work with an attorney to handle their legal case. If you truly wouldn’t be able to pay anything towards legal representation, including on a contingency fee basis, speak with your local bar association. You may be able to find a referral to a legal aid society or a law school clinic that could provide free or low-cost legal services.
Matt Freeman is the managing partner of the Law Offices of Freeman and Freeman, headquartered in Santa Rosa, California. He has spent more than 20 years as a trial attorney working with personal injury plaintiffs across the state.