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Understanding contingency fee agreements

If you have sustained a serious injury in an automobile accident, money is probably in short supply. After all, you may have to pay for medical bills and other expenses, despite being unable to work. Paying for the services of an experienced attorney may seem virtually impossible. 

Fortunately, many attorneys who handle personal injury matters work on a contingency basis. In simple terms, a contingency fee arrangement means your attorney does not receive payment unless you receive financial compensation from the person who is responsible for your injuries. 

Do contingency fees mean you receive less?

If you must pay a lawyer a percentage of your settlement or trial award, you may think you are likely to end up with less than you would receive by representing yourself. This is not usually true, though. 

Insurance companies typically prefer to work with unrepresented individuals for one simple reason: they often do not have to pay as much. 

That is, if you have an injury, you may need to accept a low settlement offer so you have some money to spend on your recovery or everyday expenses. You also likely lack the legal knowledge and expertise necessary to deal with your insurer, a wealthy company that probably has its own team of lawyers. 

Do you have to pay other expenses?

With contingency fee agreements, you do not have to pay for your lawyer’s time and expertise until your case ends favorably. You may have to fund some expenses, though. Typically, filing fees, deposition costs and other incidental expenses fall outside the contingency agreement. 

While you may have to come up with a bit of cash to pay for small legal expenses, a contingency fee arrangement may allow you to have skilled representation without paying upfront for it.