What to Expect: Attorney Fees

Can you afford a personal injury attorney?

You might think it’s too expensive to hire a personal injury lawyer to help you sue someone who caused you great physical harm. Generally, it’s not. Most attorneys operate using a fee schedule or a sliding scale. In the personal injury claims process, you’ll most likely sign a contingency fee agreement which is how an attorney gets paid after a settlement.

Is it better to settle a lawsuit before going to trial?

A settlement award is the amount of money decided on between a plaintiff and a defendant. They can choose to agree before going to court, or the award amount can be decided by a judge and jury through the trial process. Usually, personal injury cases are settled before going to trial. 

You should also be aware that insurance companies are not going to offer top dollar. Their goal may be to settle quickly, but it’s often a much lower amount that may not cover all of your expenses surrounding an accident. Settling with an insurance company right away is not recommended. An experienced attorney knows there is more at stake and can help you get the compensation you deserve.

Do I have to pay taxes on my settlement?

Tax expenses are always a concern when it comes to receiving large amounts of financial compensation from a lawsuit. Questions arise as to whether attorney fees are tax deductible and how much the Internal Revenue Service (IRS) can tax an award.

1. The IRS does NOT tax a legal settlement or judgment resulting from a personal injury lawsuit. This is because you are being compensated for financial losses already suffered. 
2. Some attorney fees used to be tax deductible, but the IRS changes its laws from time to time. In this case, your attorney fees are not tax deductible. However, the law firm’s service fees will be deducted from your settlement. It’s less stressful for you, and no future bills will hang over your head.

You can learn more about the tax implications of settlements per Internal Revenue Code 61.

Hire an experienced attorney for the best outcome

It’s best to hire an experienced personal injury attorney who can negotiate on your behalf. A skilled attorney will often save you money, too, because they know how to navigate personal injury cases to the advantage of their clients. A newer attorney with less experience may charge lower fees but lack the expertise to win your case.

A qualified attorney will accept cases that look promising for a good outcome and a decent award for their client. Their incentive is to win that amount and not lose — because if they lose, you lose. Our professional team is always ready to solidify your case by gathering all the evidence necessary and presenting it to the best advantage to win the case.

How much are attorney fee caps?

A cap means there is a limit to what attorneys can charge for a case. The cap amount an attorney can receive ranges from 33-50% of the total settlement amount. A typical attorney fee percentage is on the lower end of a settlement and goes up higher if the case proceeds to trial. 

The attorney fees are deducted from the winning amount, then medical bills and other smaller costs are paid. The remainder of the money is paid directly to you. Sometimes this can be in the thousands of dollars, depending on the case.

How do lawyers charge fees?

In general, attorneys charge by the hour with rates ranging from $100 to $500. Some set up a flat fee. Either way, a good attorney will let you know before you sign an agreement, how much to expect to spend in your personal injury case. Because the time spent developing a case can be lengthy, the attorney will also let you know how long it will take overall. It can take hours to develop documents, but the overall time of a case can take weeks to months.

There is also the attorney retainer fee, a payment made by the client to cover costs upfront. The amount of the retainer is put in a trust account, and expenses such as filing fees are deducted from it. Additional retainer funds can be added as needed. Conversely, if no funds are used, it is then returned to the client at the end of the case. Personal injury cases usually don’t require a retainer fee.

Attorney fee limits based on Nevada laws

Nevada Professional Conduct Law 1.5 states that an attorney cannot make unreasonable fees. Attorneys are held accountable by this law. In other words, you can’t be overcharged, and fees must be specified in writing through the agreement. Any changes made to the agreement after the legal process starts must be communicated in writing to the client.

Our practice areas of personal injury cases

At Adam S. Kutner, Injury Attorneys, we have over 33 years of legal experience handling personal injury cases. Our accident attorneys have won the following types of cases:

• Auto accidents
• Truck accidents
• Bicycle accidents
• Pedestrian accidents
• Motorcycle accidents
• Slip-and-fall

We also have the knowledge, expertise, and understanding of workman’s compensation, social security disability insurance (SSDI), and driving-under-the-influence (DUI) accident cases. No case is too big for us to handle.

There is a lot of detail to know about laws, rules, and regulations related to personal injury law. We have the knowledge and expertise to help you understand it better. Contact us anytime to ask questions. We’re here to help.

Attorney fees explained

If you settle a case out of court, you’ll pay less in attorney fees than if you go to trial and incur more costs over a longer period of time. However, you could end up with a larger award settlement by going to trial. These are important decisions your personal injury lawyer can help you make. An experienced law firm like Adam S. Kutner, Injury Attorneys will help you know what to expect for attorney fees in a personal injury lawsuit and fight to get you the compensation you deserve.