How is Contingency Calculated for a Lawyer?

How is Contingency Calculated for a Lawyer?

A lawyer generally charges around a third of the settlement amount. However, the contingency fee percentage can range between 20 to 50 percent, depending on the case they are handling.

Let’s take a look at some of the factors that affect how contingency is calculated for a lawyer in Indiana.

What Factors Help Determine a Reasonable Contingency Fee Amount?

According to the Indiana Rules of Professional Conduct, a lawyer should not collect an unreasonably large fee from a settlement. Here are some of the factors that attorneys must consider when charging their clients.

Whether the Client Is Filing an Insurance Claim or Lawsuit

A lawyer may charge a smaller fee if the client only files an insurance claim, which requires less legwork than a civil lawsuit. However, if they have to escalate the claim to a lawsuit, they could charge more.

For example, suppose you initially agreed to a 25 percent contingency fee for a lawyer’s help with filing a liability insurance claim. However, your insurance claim offer is unsatisfactory, so you decide to proceed with an injury lawsuit. The attorney could renegotiate their contract with you and raise their rate to 40 percent.

The Complexity of the Case

The lawyer will also assess the complexity of the case they are handling. For instance, they may raise the fee percentage if they are likely to have more difficulty defending a client who shares a considerable amount of fault in an accident. They may also increase the rate if the case takes longer to settle, which means more work for the lawyer.

Time Constraints

Clients may get charged a higher contingency fee rate if the attorney only has a limited amount of time to work on the case. For example, the client might have only a few months left before the filing deadline. That means the lawyer will have to act quickly to gather all the evidence and file the necessary paperwork for a lawsuit.

In contrast, if you contact a lawyer soon after the occurrence that prompted you to file a claim or lawsuit, the lawyer may be able to offer you a reduced charge since they will have less time restriction.

Are There Any State Limits on Contingency Fee Amounts?

Indiana currently does not have any state laws regulating contingency fee amounts for conventional injury cases. However, if you file a medical malpractice claim, Indiana Code § 34-18-18-1 limits the attorney to 32 percent of the settlement amount.

To illustrate this, suppose you have a medical malpractice case with a value of $250,000. If you and your injury lawyer agree to the 32 percent fee arrangement, they will receive $80,000 if the lawsuit settles in your favor.

Are Court and Filing Costs Included in the Contingency Fee?

No, these expenses are not usually included in your lawyer’s contingency fee. You would have to pay these costs separately. Other lawsuit-related costs that are not usually part of the contingency fee include:

  • Expert witnesses: Some cases may require an expert to testify before the court can reach a verdict. For instance, you will likely need a qualified medical professional to explain how a doctor acted negligently in a medical malpractice case. However, these witnesses may charge you for their time.
  • Overhead costs: These typically refer to the printing, postage, and travel expenses that often come with filing a lawsuit.
  • Investigations: While a lawyer can gather evidence such as medical records and police reports, you may have to spend extra if you need to hire investigators for the case.

Can Civil Court Settlements Include Attorney Fees?

If the case goes in your favor, the civil court can order the other side to pay your contingency fee as well. According to Indiana Code § 34-52-1-1, the court may award attorney fees as part of the settlement amount if:

  • The other party’s defense is unreasonable
  • The other party proceeded with the case even though their arguments were baseless or unreasonable
  • Bad faith was involved in the litigation process

Will the Lawyer Still Charge a Contingency Fee if You Do Not Win the Case?

If a lawyer works on a contingency fee basis, they will only get paid if you win the case. As such, you typically do not have to pay anything if you do not get your settlement. This arrangement often benefits injury victims who cannot afford to pay for an attorney up front.

Discuss Your Case with a Lawyer to Learn More

At Sevenish Law Firm, P.C., we handle a wide range of personal injury cases throughout Indiana, including medical malpractice, auto accidents, and work injuries. In fact, personal injury is all we do!

Our team is ready to help you proceed with your claim or case. To schedule a free consultation with one of our personal injury lawyers and learn more about contingency, call Sevenish Law or fill out the contact form on our website.

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