Understanding Legal Fees and Case Expenses Before You Pursue Your Case
Hiring a lawyer can feel intimidating, especially if you’re not sure what it will cost you. The truth is, most personal injury and workers’ compensation lawyers don’t charge anything up front. But not every legal case works that way.
Let’s break down the most common legal fee structures: contingency fees and hourly billing, and how expenses fit into each one.
Contingency Fees: No Fee Unless You Win
In a contingency fee arrangement, your lawyer’s payment depends on the outcome of your case.
You pay nothing up front, and the lawyer only collects a percentage of your recovery (the settlement or verdict) if you win.
Typical contingency fee percentages:
- Personal Injury or Auto Accident cases: 33⅓% (one-third) of the settlement
- Workers’ Compensation cases: often set by a state statute like 20%, but refer to your state statute for specifics
- Medical Malpractice or other complex litigation requiring experts and/or trial: 33–40%, depending on state rules and risk level
The percentage is not always set in stone and can often be negotiated with the law firm or attorney. While 1/3 is an average standard, be prepared to discuss an increased percentage for very complex cases or cases that go to trial.
If there’s no recovery, you don’t owe a legal fee or have to pay any expenses on the case.
Example Case Economics
You win a $90,000 settlement in a car accident case.
- Attorney fee: 33% = $30,000
- Case expenses: $2,000 (for medical records, experts, etc.)
- Net to you: $58,000
How Case Expenses Work
Even on contingency cases, there are costs involved in pursuing a claim called case expenses or costs.
These may include:
- Court filing fees
- Medical records and reports
- Expert witness fees
- Deposition and transcript costs
- Investigators or accident reconstructions
In most cases, your lawyer advances those expenses for you and deducts them from your share at the end.
Example
If your total recovery is $100,000 and your case expenses are $5,000:
- Fee (33%): $33,000
- Expenses: $5,000
- You receive: $62,000
Your lawyer only gets reimbursed for actual out-of-pocket costs, not markups or hidden charges. You can request an accounting of expenses at any time from your lawyer.
Hourly Billing: You Pay for Time Spent
Some types of cases use hourly billing instead of contingency fees.
In this model, the lawyer bills you for each hour (or portion of an hour) they work, similar to how accountants or consultants bill for time.
Hourly rates can fluctuate drastically based on the size of the firm or expertise level of the lawyer. Typical hourly rates for reference:
- General business or contract law: $200–$400 per hour
- Divorce, real estate, or defense work: $250–$500+ per hour
- Specialized litigation or appeals: $400–$800+ per hour
You’ll usually be asked to pay a retainer up front (a deposit), which is drawn down as work is done.
Hourly billing makes sense for cases where:
- You’re the one defending a claim, not pursuing compensation
- The financial recovery isn’t the main goal (for example, getting an injunction or custody order)
Why Contingency Fees Work Best for Injury Cases
If your case involves injury, disability, or death, a contingency fee structure levels the playing field and limits your financial risk.
You don’t pay unless your lawyer succeeds and it allows people to access top-tier representation without the risk of hourly bills.
Hourly fees, on the other hand, are more common for corporate, family law, or transactional matters where ongoing work, rather than financial recovery, is the goal.
Key Takeaways
| Model | When Used | Typical Fee | You Pay Up Front? |
|---|---|---|---|
| Contingency Fee | Personal injury, workers’ comp, medical malpractice | 20–40% of recovery | ❌ No |
| Hourly Billing | Business, family, defense, real estate | $200–$500+/hr | ✅ Yes |
| Flat Fee | Simple tasks (wills, deeds, traffic tickets, criminal issues) | Fixed price | ✅ Yes |
The Bottom Line
If your case involves an injury caused by someone else’s negligence, you can likely hire an attorney on a no-fee-unless-you-win basis.
If your case involves contracts, family matters, or defense work, you’ll probably pay hourly or flat-rate fees.
Either way, always ask your attorney to explain both the fee and how expenses are handled before signing an agreement so you know exactly where every dollar goes.