Personal injury lawyers usually use what are known as contingent fee agreements, that is, agreements which base the attorney’s fee on a percentage of the overall settlement. The lawyer’s fee is contingent upon settlement of the case. These agreements have been called "the key to the courthouse" for many people, since the client usually does not have to pay any up-front money to the lawyer.

   Detractors feel that contingent fee agreements promote litigation. There is no doubt that more people sue because of these agreements. Many countries do not allow such agreements, and have much less litigation. However, others feel the empowerment they provide to the average citizen, and the accountability they force upon big business, justify their use. Contingent fee agreements are the great equalizer. They allow both the indigent and the middle class to engage in expensive litigation to recover for losses. The P. I. lawyer is a modern day Robin Hood of sorts. They take from the rich and give to the poor. Of course, Robin Hood never took a large chunk for himself.

   The typical contingent fee agreement calls for the client to receive two-thirds of the settlement, with the balance of one-third going to the lawyer. These agreements give the attorney a stake, or ownership interest, in the litigation. The lawyer gambles that the outcome of the case justifies the time expenditure, monetary investment and stress involved.

   You should not hesitate to try to negotiate a better deal with your lawyer. Especially if you have a good case, your lawyer will be willing to reduce his fee if he thinks you’ll shop for a more favorable arrangement. This country, unfortunately, is filled with lawyers, including personal injury lawyers. There are lots of bad P. I. lawyers, and there are many dishonest, unscrupulous ones too. But there are also many skilled, honest, and energetic personal injury lawyers to choose from. It’s a client’s market and you should take advantage of that fact. If you feel that the fee your lawyer wants to charge to handle your case is too high, let him know that you would like to negotiate a fee arrangement which will result in you receiving a larger part of the settlement proceeds. It can’t hurt to ask.

   Your lawyer may not like the fact that you are sophisticated enough to ask, but he will respect it. If he doesn’t like it, you can always find another lawyer. P. I. lawyers, at least average ones, are "a dime a dozen." If you have a good case, you are in the driver’s seat, so to speak. You are free to take your case and leave if you are not satisfied with the terms the lawyer offers. You will be amazed at how willing he will be to re-negotiate if he senses that you are getting ready to head for the door. The fee agreement the lawyer is willing to offer you is not the most important factor in choosing a lawyer. It is more important that you choose a lawyer who is honest, hard working and experienced in personal injury work. If you shop around for the best possible fee agreement, you may find a bad lawyer who will outbid the rest. Be sure you know what you are getting into before you sign on the dotted line. Again, speak to friends you trust or consult your local Bar Association before retaining a lawyer.

   There is an element of uncertainty for the lawyer with contingent fee cases. The lawyer assumes the risk that there may be no or little recovery after years of work and thousands of dollars of the attorney’s own money invested in the costs of litigation. Because of this risk, it is fair that sometimes personal injury lawyers earn more on a contingent fee case than they would if they were paid hourly.

   Lawyers usually bill on an hourly basis for cases that do not involve personal injuries. The insurance company’s lawyer, in defending against the personal injury claim, bills the company in this manner. Hourly rates of $150 or more have become commonplace. Lawyers who work on an hourly basis are often criticized for putting in unnecessary time on the case. This is called "padding" the time sheet. Attorneys who work with contingency fees are not subject to this criticism since more time spent on the case does not necessarily translate in to higher attorney fees. In fact, the criticism is just the opposite. The clients of P. I. lawyers frequently complain that they can’t reach their attorney. The lawyer may avoid the client because the lawyer can’t bill the time and may feel that client contact is unnecessary or a nuisance.

   While you should not stand for being ignored by your lawyer, keep in mind that he or she cannot make progress on your case or those of other clients if he or she is on the phone all day answering client’s questions. If you have a question about your case, ask your lawyer’s secretary or paralegal. Often he or she can provide the right answer just as easily as the lawyer.

   Contingent fee agreements motivate the lawyer to work efficiently. Since the lawyer cannot bill hourly, she hopes to settle the case for as much as possible as soon as possible. The lawyer doesn’t get paid until the conclusion of the case. This arrangement, at least theoretically, rewards diligence and hard work. It’s pure capitalism. It works for trial lawyers and it works for their clients. When big business and the insurance industry complain about contingent fee agreements, they are thinking only of their self-interest.

   One of the most attractive aspects of contingent fee agreements is that the client owes the lawyer nothing if the case is not won. This should provide the lawyer with strong motivation to aggressively handle the case in order to obtain a large and prompt settlement. You should insist on receiving a copy of the fee agreement for your records. Form 3 in the Appendix of Winning Your Personal Injury Claim is a sample contingent fee agreement.

   As explained in the last chapter under "the Best of Both Worlds," be sure that if you are paying the lawyer a percentage, it is only a percentage of what he or she obtains for you. If the insurance company already offered you $50,000, you should only pay a fee on any additional amount the lawyer negotiates for you.