How Much Does A Lawyer Get Out Of A Settlement?
There are several methods used by lawyer to bill their clients. The traditional method of billing, which is based on hours worked may be a bit difficult for clients to stomach. More often than not, it turns out that the attorney fees are more than the settlement negotiated or about the same. In cases like this, even though there is a positive conclusion to the case (a settlement), there is no recovery or gain for the client.
It is, therefore, necessary for every potential claimant to properly research the billing practices and how much their personal injury lawyers charge before committing to anyone. It could turn out that their fees are more substantial than originally thought.
To get a better understanding of how much lawyers make from settlements, you should first know the different methods they use to bill their clients. Here are some of these methods, and how they work:
- Billable Hours
When an attorney charges by the hour, it is expected that they keep an account of the time that they spend on the case. This might seem reasonable until you consider the fact that many attorneys charge several hundred dollars per hour, the bills can add up quickly. Although, you should know that attorneys that bill by the hour are usually part of large law firms that have clients with deep pockets.
Now, lawyers also understand that the average worker cannot afford to be billed by the hour ending up paying thousands of dollars in fees after winning their case. In this case, contingency fee billing may be a better choice.
- Contingency Billing
In this type of billing, the lawyer fees are dependent upon their winning the case. Most agreements of this type stipulate that the client is not charged anything during the case, but the attorneys usually keep track of man-hours and expenses so that when the case is finally won, they will know what to charge.
Alternatively, the lawyers could charge a percentage of the settlement fee (usually about 33-40%). This might seem to be a lot, but in this case, the Lawyer is taking up a lot of the risks. If the case is lost, the lawyer does not get paid.
- State Laws on Attorney’s Fees
Some states put a limit on the amount that an attorney can charge their client or the percentage of a settlement that they can collect up to a certain dollar value. Except the settlement exceeds this limit, then there is a limit placed on the next tier of settlement. Basically, the more money is won, the more contingency fees a lawyer gets.
There are several factors involved in what influences the eventual take-home pay for lawyers in a settlement case. As the client, try to consider your options properly and choose the one that works best for your particular situation, and follow your gut instincts.