How Much Will My Attorney Take of My Settlement?
Reviewed by Carina Jenkins, J.D.
If you've recently won a legal settlement or you're contemplating pursuing one, you probably want to know how much your attorney will take from your settlement.
Legal representation can be costly, so to protect as much of your compensation as possible, it pays to know as much as you can about the subject.
Attorney's fees are the compensation a lawyer receives for their services. Many factors contribute to the overall cost, including the type and complexity of the case, the law firm's pricing structure and the fee the client initially agreed upon with the attorney. Fees are structured in several ways, including:
- Contingent (a percentage of the monetary amount awarded to the client)
- Flat (a fixed fee agreed upon at the start of the attorney-client relationship)
- Hybrid (a reduced hourly rate in anticipation of a contingency fee)
The percentage of your settlement that your attorney will take can vary, but a common structure is the contingency fee agreement. Contingency fees are based on the outcome of your case, meaning your attorney only gets paid if you win your case or secure a settlement.
On average, attorneys usually take between 33.3% and 40% of the settlement amount. The specific percentage can vary, depending on the complexity of the case, the attorney's experience and local regulations.
To ensure you fully understand the likely costs, it's crucial to discuss this percentage with your attorney before proceeding. Make sure the details are put in writing, typically as part of a retainer agreement with the lawyer.
Several factors contribute to determining how much lawyers get from a settlement. Let's look at the most common ones.
You may have heard the phrase, "If you don’t win, you don’t pay." This is a contingency fee — a form of payment accepted by attorneys and law firms in place of an alternative, such as an hourly rate. Payment is contingent upon the successful outcome of the case. It's usually a portion of the proceeds awarded to the client due to the litigation or settlement. It can also be the fees the attorney accrues but doesn't bill to the client until the case concludes successfully. The client and attorney should confirm the agreement before representation begins.
An attorney will review a case before determining their fee. They'll look to see if it might take longer to settle, which raises their costs. They also evaluate their client's share of the burden of blame in an accident because if it's potentially high, winning the case will be harder.
Many attorneys require a higher percentage if the case goes to trial. This is because there's more work and more risk involved with a trial.
You may find that highly experienced attorneys with a track record of winning settlements charge more for their services. If you can, you should try to determine if the potential settlement justifies the increased fee, as one may nullify the other. However, if the attorney has a good reputation, you may prefer this to the uncertainty of a less experienced lawyer dangling the promise of a higher reward.
You should always discuss and negotiate the fee structure with your attorney. Some are open to negotiating their percentage, often in cases where the settlement may be substantial.
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The amount matters because it determines how much the lawyer gets from the settlement in absolute terms. However, as mentioned above, the percentage is typically within the 33%-to-40% range.
In addition to their fees, you may also be responsible for reimbursing your attorney for any out-of-pocket expenses incurred during the legal process. These expenses may include fees for court filing and expert witnesses. Although the attorney may include these in your original fee negotiations, this isn't always the case.
Depending on the nature of your case, your attorney may need to negotiate with insurance companies and address outstanding medical bills as part of the settlement process. Therefore, what you end up with from your settlement may be lower than what you anticipated.
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