Taking a Personal Injury Case on a Contingency Fee Basis

Lawyers routinely take on personal injury cases on a contingency basis. But many times, individuals are confused and frustrated when they ask several lawyers to represent them and they all decline.

If liability is straight forward, and a case could still be filed before expiration of the statute of limitations, then chances are the case flunks the lawyer's cost-benefit analysis.

Here's an example. I know from past experience, that the average litigation I handle on an hourly basis costs my clients approximately $30,000 in legal fees to get to trial. That's slightly more than 109 hours at a rate of $275 per hour. Therefore, if I take on a personal injury case, I expect on average that it will take up 109 hours, more or less, of my time.

In evaluating a personal injury case, I will either look at the jury verdict reporters, or know from experience, what the average jury verdict is in the jurisdiction where the plaintiff could file suit. If the verdicts in that jurisdiction do not exceed $90,000, then the case is not worthwhile for me to handle. That's because a one-third fee on a $90,000 verdict or settlement is $30,000. Anything less, and I am better off spending my time doing hourly work, and getting paid on a monthly basis.

That's not to say other attorneys won't consider taking on small contingency cases. Not all attorneys will have the option of filling their workdays with hourly work. And some will always want to take the chance of going for a quick settlement, betting that the case won't make it through discovery or all the way to trial.

Of course, the above represents only one consideration that will go into the decision-making process. Lawyers must also consider the degree, if any, of the individual's comparative fault. They must also consider whether the defendant is insured, and whether any judgment could be satisifed. Finally, the lawyer must evaluate the potential client, determine whether the individual would be a credible witness at trial, and make a determination as to whether the lawyer will be able to work with him or her.