How Do CA Personal Injury Lawyers Get Paid?

The cost of legal representation is a big factor when deciding whether to pursue a claim and which attorney to hire. The idea of lawyer fees might seem overwhelming at first, but knowing what to expect can significantly ease your concerns.

Most personal injury lawyers in California work on a contingency fee basis, including the team at Sepulveda Sanchez Law. This means that we get paid only if we win your case. In other words, our payment is “contingent” on recovering compensation for you first.

A contingency fee helps take the financial stress off of you as a client, especially when you’re already dealing with the physical and financial impact of an injury. Additional and incidental costs, such as court fees, the cost of gathering evidence, expert witnesses, and other expenses get deducted or subtracted from the total compensation you receive at the end of your case.

How Do Contingency Fees Work?

Contingency fee arrangements ensure that your lawyer is just as invested in the outcome of your case as you are. This is because your attorney’s payment depends solely on the success of your case – if you don’t win your case or secure a settlement, then you owe your lawyer nothing for all of their time and effort. Your lawyer is incentivized to go after your best interests.

In California, when you win your case or sign a settlement agreement, your attorney will typically take a pre-agreed percentage of your total recovery amount. This way, a contingency fee arrangement helps reduce your financial risk while providing you with access to legal services that you may not otherwise be able to afford in your circumstances.

The specific percentage your lawyer takes can vary depending on the complexity of your case and the stage at which it gets resolved. For example, if your case gets settled out of court, the fee may be lower compared to a case that goes to trial and requires extensive discovery or additional legal work. Most contingency fee arrangements range between 25% to 40% of the total settlement or judgment.

You should discuss all of the details of your lawyer’s fee arrangement up front and have them outlined in the attorney-client contract in order to avoid any misunderstandings later on.

Other Types of Fee Structures

Besides contingency fees, personal injury attorneys may offer other types of fee structures based on the type of case and the client’s preferences. Common alternatives include:

  • Hourly Rates – With hourly billing, lawyers charge for each hour they work on your case. This method of payment is less common in personal injury cases but might be suitable if the case is unusually complex or unpredictable. 
  • Flat Fees – With a flat fee, attorneys charge a specific, agreed-upon amount for handling the entire case. This is typically used for simpler or more routine matters, as personal injury cases tend to be more dynamic and unpredictable.

Contingency fees tend to be the most well-suited to personal injury and wrongful death lawsuits, which tend to have high stakes that depend on the specific circumstances of each case.

Does California Have Caps on Lawyer Fees?

California has specific regulations that impose caps on contingency fees for attorneys in certain types of cases, but these generally do not apply across all personal injury cases.

For example, in medical malpractice lawsuits, California law caps contingency fees at a sliding scale based on the size of the award. This regulation ensures that clients keep a significant portion of their awarded damages.

For other types of personal injury cases, California has no legal cap on contingency fees for lawyers. However, ethical guidelines set by the California State Bar require that lawyer’s fees are reasonable for the services provided. Attorneys are also required to make sure you understand and fully agree to the fee structure before agreeing to represent you.

Additional Costs You Might Pay in a Personal Injury Case

When you work with a personal injury lawyer on a contingency fee basis, there may be additional costs involved beyond just your lawyer’s professional fees.

Some of the typical expenses in a personal injury lawsuit include:

  • Court Filing Fees – Costs associated with filing legal documents in court.
  • Medical Record Fees – Any charges for getting copies of the medical records necessary for proving your claims.
  • Expert Witness Fees – Payments made to experts who may have testified on your behalf or provided evidence related to your case.
  • Investigative Services – The cost of hiring an experienced investigator to help gather the facts and build a strong case.

While these costs are necessary for building a robust case with the greatest chance of success, they can add up quickly. Typically, lawyers will pay these costs on your behalf and then reimburse themselves from the settlement or judgment awarded at the end of your case.

Key considerations for these additional costs include:

  • Potential for Reimbursement – Clarify with your lawyer whether you will be responsible for these costs if your case does not result in a favorable outcome.
  • Cost Management – Some firms may absorb these costs as a part of their service, while others might require reimbursement regardless of the outcome of the case.

Your attorney should make sure these terms are clear from the outside to avoid any surprises. By discussing these details with your lawyer, you help ensure that you’re fully informed about the potential financial commitments involved in pursuing your case.

How Are Settlement Funds Distributed?

Once your personal injury case resolves or you accept a settlement, the distribution of funds follows a specific legal process. First, the awarded amount gets sent to an independent trust account maintained by your lawyer, where they will deduct the agreed-upon contingency fee and any additional reasonable costs taken on during the process. 

Following this, any outstanding liens or legal claims against the settlement are paid, such as medical bills or amounts owed to third parties involved in your case or representation.

The remainder of the settlement funds is then disbursed to you, the client. Your lawyer should provide a detailed itemization of all the deductions made from the settlement, ensuring transparency and accountability in the process.

At Sepulveda Sanchez Law, our knowledgeable California personal injury team is dedicated to supporting you and making sure you understand all of the financial implications of your case. Contact us now to get started with your free consultation.