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Why Personal Injury Victims Need Contingency Fees

Most Texas personal injury attorneys handle cases on what is called a “contingency fee” basis. This article explains the reasons for and benefits of a contingent fee arrangement.

Contingency fees for lawyers


What is a Contingency Fee?


A contingent fee means that the attorney only gets compensation for his/her time in the event he or she collects money on the case. In essence, the fee is contingent upon a monetary recovery in the cause of action. Houston personal injury lawyers all have contingent fee arrangments.

It is highly recommended that personal injury victims carefully read any employment agreement for attorney fee agreement prior to signing a contract or retaining an attorney. Ethically, the State Bar of Texas requires attorneys handling personal injury cases on a contingency basis to have a written fee agreement.

Different attorneys may have unique provisions in their attorney fee agreements and prospective clients should ask questions if they’re unclear on how the fee is calculated or what may be deducted from their share of any settlement. Always read the fee agreement carefully before signing. Make sure to ask questions about anything you are not sure about.

Why Personal Injury Victims Need Contingent Fee Agreements

The reason that contingent fee arrangements are necessary for personal injury victims is that many, if not the vast majority of personal injury victims cannot easily afford hourly rates charged by Houston law firms. This is particularly true during times when they may be out of work and incur substantial medical bills due to their injury.

Each year the Texas Lawyer magazine does surveys looking at hourly rates charged throughout the state of Texas and also in specific major metropolitan areas such as Houston. Houston’s senior partner’s rates can exceed 400, while junior partner rates can be $350 and up and Associates billed at $300. Texas lawyers are among the most expensive in the country. Rates have risen significantly and several attorneys in Houston and Dallas charge over $1000 per hour.

Additionally, many senior legal assistants’ hourly rate is well over $160 and even first-year lawyers are now sometimes charging over $300 per hour.

Lawsuits Mean Extra Work and Expense for the Lawyers

When litigation is involved, hourly rates can add up very quickly for such things as deposition preparation, attending hearings, production in response to written discovery, research and witness preparation, and other associated time-consuming events for which lawyers and law firms charge. For lawyers that charge by the hour, they get paid for the time they worked on the file, whether they win the case, lose the case or even settle the case.

Too, one must also consider out-of-pocket expenses necessary to develop and move a personal injury case through the litigation process. Such things as postage, filing fees, and court fees, copies, court reporters and videographers, expert witness fees and travel expenses can mount up very quickly. Not to mention the law firm overhead. Lawyers that do work by the hour simply pass on the expenses to the client who usually pays them when due or in advance monthly.

Contingent Fee Lawyers Usually Must Pay the Expenses Themselves

The personal injury attorney, however, usually must advance out of his or her own pocket the expenses necessary to move the case forward. Personal injury case expenses truly are risk capital in the clearest sense of the words. Larger damage cases and complex or multiple-party cases can involve very large expense requirements. Even small cases require additional out of pocket expenses for the lawyer.

Insurance companies and large corporations are familiar with how attorneys bill for their time and the nature and amount of attorney’s fees in litigation. Most personal injury victims, however, have never had to hire an attorney and literally would have “sticker shock” if they were to be presented with a bill each month for services to be rendered.

For new clients, the hourly fee attorney generally charges a retainer which is a set amount paid in advance for which the lawyer deducts his bills from monthly to ensure he is paid promptly and without collection efforts.

Without Contingent Fees, Victims Would Not be Able to Hire Lawyers

Without a contingency fee arrangement, the majority of accident victims would be left without recourse or remedy through a lawyer and would be severely disadvantaged to the corporation or the insurance carrier who has no limits on the amount they can pay their attorneys. Without a car accident lawyer to hold wrongdoers accountable – the wrongdoers and insurance companies get away with it and our community suffers.

Types of Cases Handled by Contingent Fee Lawyers


To Speak With a Personal Injury Contingency Fee Attorney in Houston

Call us for a no-obligation consultation on your rights and options.

Baumgartner Law Firm

6711 Cypress Creek Pkwy,

Houston, TX  77069
(281) 587-1111

Greg Baumgartner

attorney greg baumgartner

Greg Baumgartner has practiced personal injury law since 1984. He holds not one but two law degrees and is a graduate of Trial Lawyers College. He is licensed in Texas and Colorado. Mr. Baumgartner has earned a reputation for exemplary results for his clients. And has been preeminent rated for decades and recognized by Top 100 Trial Lawyers, Super Lawyers, Expertise, Newsweek, Houstonia magazine, and many others. He has given educational talks to lawyers and many media interviews regarding personal injury cases.