Many personal injury attorneys prominently advertise that they do not charge any fee for initial consultations and that there is no fee unless there is a recovery. In reality, this is the way that most every personal injury attorney operates. The majority of attorneys who handle personal injury cases work on what is called a “contingency fee” basis. This means that the attorney’s fee is “contingent” on obtaining a recovery for their client. The attorney will only get paid for working on a case when—and if—they recover on the client’s behalf. If there is no recovery for a client, the attorney is not compensated for his or her time spent working on the case. Likewise, most personal injury attorneys advance the cost of pursuing a claim and are not reimbursed for their expenses – which may be substantial – unless the claim is successful.
A contingent attorney’s fee is based on a certain percentage of the client’s overall recovery. It works very similarly to a salesperson that works on commission, only instead of the fee being earned at the time of sale, it is earned at the time of settlement or when a final verdict is paid.
The amount of an attorney’s contingency fee in a personal injury case will vary based upon the type of case. In a workers’ compensation case under Alabama law, the fee is limited by the Workers’ Compensation Act to 15% of the recovery. In other types of cases, it is common for a contingency fee to be 1/3, or 33.33%, of the recovery. In the event a claim has to be filed in court and/or tried before a jury, the fee may increase to 40% of the recovery. This allows the attorney to be compensated for the additional time, effort and expense associated with working on a case in litigation and/or trying a case to a jury.