Having practiced personal injury exclusively for the past three decades, I can say that I have talked to tens of thousands of people regarding their cases. Some people are frustrated because they can’t seem to find a personal injury attorney who is interested in taking their case. Most of the time, those folks are unaware of the business aspects of an attorney handling a case on a contingent fee basis or are now aware of the law that may apply to their claims. This article is written to give insight from the attorney’s perspective on accepting or declining a case.
Every case has three basic factors that must be evaluated by the attorney prior to accepting representation. They are liability, damages, and the ability to collect money. While the facts of a specific case will very, each of these factors must be considered in every personal injury case by attorneys who handle litigation on a contingency basis.
Liability– an experienced attorney always starts their case evaluation with liability, because if you don’t get liability, it doesn’t matter what the damages are or the insurance coverage. Liability factors include the burden of proof that the plaintiff must shoulder, whether the defendant can be held legally responsible, the facts of the case and also the actions or inactions of the plaintiff.
Frequently, people are misinformed about the state law that would apply to their circumstances relating to liability. This generally is a situation where they are injured and feel strongly that someone should pay for their injury and many times without regard to fault of others. That may or may not be the case depending upon the defendant and what a defendant did wrong to make them legally responsible. One situation we hear about often is an injury which occurred on another’s property and the mistake belief that being injured automatically means entitlement to compensation.
Damages – the damages must justify the attorneys time, risk and expenses such that a reasonable expectation of a jury verdict or settlement would adequately compensate the attorney. In effect, the range of value must be such that the attorney’s percentage would cover their expected time and risk. Very few people outside of the legal industry understand the time necessary to prosecute a case in litigation. It is way more effort than most people who are not lawyers would expect.
Ability to collect money – not only must there be liability, damages sufficient to justify the time and risk but also there must be an ability to collect a judgment should the attorney win the case. This is insurance coverage for 99.9% of matters. You can have slap down liability, terribly bad damages and have inadequate insurance and even the greatest personal injury attorney will not be able to pull a rabbit out of the hat to help their clients. If the client cannot recover the money from the defendant, the attorney is unlikely to be fairly paid.
CONTINGENT FEES AND CASE EXPENSES
Attorneys who handle personal injury litigation generally handle it on a contingent fee basis. That means that the attorney only gets paid for his time if he actually collects money for his client. Additionally, attorneys generally advance case expenses necessary to prosecute a case out of their own pocket. The attorneys on the other side, the defense attorneys, are paid for their time by the hour and the client pays all of the out-of-pocket expenses. In effect, other than reputation, the defense attorneys have no risk in the file. Alternatively, the personal injury attorney handling a case on a contingency fee basis must account for his time, office overhead and his own money he puts at risk in handling a claim. When an attorney can make hundreds of dollars for every hour they work on the case, have all the expenses and overhead related to the case paid why would anyone take a case on contingency? The answer is the expectation that the money recovered over the year will return more than what the lawyer could bill by the hour!
An example would be a case that required a lawsuit to be filed and the case progressed through trial. Attorneys can be expected to take depositions, do written discovery, do a case investigation, talk to witnesses, obtain medical records and or medical testimony, and retain and pay experts as necessary. The amount of time and money in a case will vary depending on the complexity of the case. The value of the time an attorney spends will depend upon the attorney’s reputation and experience. The young attorney may very well have a much lower hourly expectation then someone with decades of experience. Case expenses will also vary depending on the severity and complexity of the case from a minimum of several thousands of dollars to six and even seven figures.
In short, a personal injury attorney taking a case on a contingency fee basis has to analyze the time that they expect to spend on the file, the money they must pay out of their own pocket for the case and the likelihood of winning the case. If the result comes out poorly for the attorney, the attorney must eat his or her time, expenses and overhead. Therefore, the matter must be one in which the attorney feels confident that they will be adequately compensated for the risk, time and expenses invested in the matter.
There are many other factors relating to why an attorney may not accept a particular personal injury case. Some of the best personal injury attorneys have developed niche practices which are highly specialized areas of practice and do not deviate much from these areas.
Experience is another factor that must be considered by the attorney. Attorneys with substantial experience and reputation, probably will not handle a personal injury case that does not involve numbers that the attorney is customarily used to dealing with. If the attorney’s hourly rate would be $500, they are very unlikely to handle a small personal injury case because there would be little if any chance of the lawyer being adequately compensated for the time.
The client is another factor that attorneys consider important. If the case gets into litigation, the client and the attorney will spend quite a bit of time together. The client needs to be comfortable with the attorney and vice versa. Truthfulness is probably the most important “other” factor for the attorney. Nothing is worse from a personal injury attorney’s perspective than finding out that your client was not completely candid with you. If an attorney feels the potential client is not candid and forthcoming they may decline the case for that reason or even withdraw after discovering the deception.
By taking a case on contingency, an attorney is betting his or her expertise, time, and paying the case expenses in the hope of being adequately paid. If the attorney feels that they are unlikely to be reasonably paid for the effort and exposure they are unlikely to accept the case.