If you have received injuries in an accident, you may be thinking about filing a lawsuit. You probably have questions about how lawyers get paid and whether you will be able to afford to hire an attorney.
How Do Lawyers Get Paid, and How Much Do They Make?
In the U.S., the median yearly salary for a lawyer is $127,900 per year. Attorneys’ salaries have trended upward from 2010 to 2020 and come primarily from fees that lawyers collect from clients for the services they provide.
How much an attorney charges you in fees depends on factors such as the type of services the lawyer is providing. Other factors that can affect how much lawyers get paid include the following:
- The complexity of the case
- The area of expertise
- The attorney’s level of experience
Where you live can also affect how much your attorney gets paid. Lawyers in some areas get paid more than in others. In Arizona, personal injury attorneys earn between $100 and $500 per working hour on average.
Fortunately, that does not necessarily mean that you have to pay your attorney by the hour.
What Fee Structures Do Lawyers Use To Charge Clients?
Attorneys understand that you may not be able to pay them upfront for their services out of your own pocket. Therefore, they usually offer different payment arrangements.
Here are examples of the different fee structures that attorneys use to get paid and the type of situation in which each may be most appropriate.
Hourly Fees
There are many professionals who get paid a fee for every hour that they work. Some attorneys structure fees so that they get paid by the hour. An attorney that charges you by the hour may charge you different fees for office work than for the time spent arguing your case in court, with the latter usually being more expensive.
Attorneys who bill hourly charge you for any communication that takes place between you and them, including emails and phone calls. They also charge for fractional hours. For example, if you had a phone conversation with an attorney who charged hourly that lasted 20 minutes, you would have to pay one-third of the established hourly rate.
Attorneys who charge hourly usually have corporations or wealthy individuals as clients. Personal injury attorneys are unlikely to get paid hourly because they know that you probably can’t afford to pay hourly fees.
Flat Fees
Instead of getting paid by the hour, attorneys sometimes charge a flat fee for a specific task. These are usually routine tasks that the lawyer handles for clients all the time that don’t necessarily need to go to court:
- Wills and other estate planning documents
- Name changes
- Real estate closings
- Uncontested divorces
Because every personal injury case is unique, the tasks your attorney must perform for you usually aren’t routine. Therefore, you are unlikely to have to pay your personal injury attorney a flat fee.
Retainer
A wealthy client who has a longstanding need for legal services may put an attorney on a retainer. In other words, the lawyer gets paid a previously agreed-upon fee to be ready to provide services for the client whenever needed.
Once your attorney resolves your personal injury case on your behalf, you may never have need of legal services again. You probably won’t need to put your lawyer on a retainer, and your lawyer probably won’t offer it as an option.
Contingency Fees
Most personal injury lawyers get paid with contingency fees. This means that you only have to pay your attorney if you recover damages from the defendant in your case. If you lose your case, you don’t have to pay the lawyer anything.
Contingency fees benefit both you and your attorney. Because of your injury, you probably haven’t been able to work, and money may be tight. A contingency fee structure means that you don’t have to pay a lawyer if you don’t win any money from your case. If you don’t win, your attorneys don’t get paid, which motivates them to do a good job on your behalf. The more money you win, the more your lawyer gets paid.
In a contingency fee structure, you have to pay a percentage of any money that you win to the lawyer to cover legal fees. You will determine this amount with your attorney when the firm takes your case; 33% of the damages is typical.
What Does the Arizona Bar Association Say About How Lawyers Get Paid?
The Arizona Bar Association requires that if your attorney charges you a contingency fee, the two of you must determine the percentage of your recovery that your lawyer will get paid, and you must sign a contingent fee agreement in writing.
The State Bar’s rules of ethics also state expressly that your lawyer must charge a reasonable fee. The reasonableness of the fee can vary depending on your situation. Your attorney needs to consider certain factors to make this determination. A contingency fee structure is one such factor; others include the following:
- The attorney’s experience
- The amount of money you seek
- The time and labor that the lawyer must put into your case
How Do You Pay Your Lawyers?
Your attorney usually deducts contingency fees from the money you have recovered once the defendant pays. The attorney will then transfer the net amount to you. That money is now yours.
Sometimes, you may have to pay upfront costs to your lawyer, such as deposition costs or filing fees. If so, the State Bar makes it clear that attorneys can only accept credit card payments for fees they have already earned. They can’t take credit card payments in advance.
To make things easier for you, your attorney will often cover these upfront costs for you. The contingency fee you pay if you win goes in part to compensate the lawyer for these costs.
How Do Lawyers Get Paid for Your Case?
How do lawyers get paid? It varies by firm, but our personal injury lawyers in Phoenix, Arizona charge our clients on a contingency fee basis. Contact us to schedule a free consultation.