Key Definitions to Know Before You Hire a Personal Injury Lawyer

June 23, 2022

The Mighty Team

If you’ve watched TV or driven down a highway over the past 30 years, you’ve probably seen a commercial or billboard for a personal injury lawyer that promises “You’ll Only Pay if You Win.” They’re mostly telling you the truth. But they’re also leaving out important details about what winning means and how much you’ll get if you do.

Many personal injury lawyers only want you to think of how much you’ll get from your total settlement (i.e. the number you see highlighted on the billboard). Just as importantly, you should ask how much you should expect to pay in an accident. To understand that, you need to understand the way personal injury lawyers talk. Even everyday words like “cost” can mean something different in a legal context than they do in a grocery store. Here’s a few key terms you need to know:

Contingency Fee: A contingency fee is a set percentage of a case settlement that is paid to your lawyer after your case settles. The personal injury industry norm for cases that do not involve a lawsuit is 33.3% and for those that do include a lawsuit, the norm is a 40% fee. 

Why aren’t injury lawyers paid upfront? 56% of Americans have less than $1000 saved for an emergency. This is the very emergency the statistic is talking about. People in their time of need can’t afford to pay an attorney and contingency allows clients to defer payment until the end. Contingency is pro-justice, if administered fairly. 

Case Costs: In a personal injury case, case costs are different from the fee you pay your lawyer, which is usually called the legal fee. Instead, case costs refer to the expenses paid by your lawyer or their firm related to your case, including investigations, negotiations, and lawsuits. If your case settles, you’re responsible for repaying these costs out of your portion of the settlement. Some costs are unavoidable, like lawsuit filing fees if your case requires one. But sometimes personal injury lawyers pass along costs that deserve some side-eye, like reimbursing them for photocopying or a $.50 cent stamp. 

Total (or Gross) Settlement: The total settlement is the amount of money the insurance company pays to settle your case. It’s the number a billboard numbers like to cite, because, well, it’s the biggest of all the numbers and we know how much PI lawyers like to talk about how size matters. Personal injury lawyers are paid their fee out of this pot of money, before it’s used to pay your medical bills, other case expenses, or reach your wallet. 

Net Settlement (your share of the settlement): Your settlement is the total amount of money leftover from your total settlement after costs, including after medical bills, financing costs, case costs, and other expenses have been paid. 

Retainer Agreement: Hiring a personal injury lawyer is serious business. So much so that you should treat it like a business decision and ask to review your agreement with your law firm, called the Retainer (or Engagement), in writing before signing. If you meet with a lawyer who’s dodgy about delivering a draft, you should keep looking. And if the draft you receive is full of legal jargon, ask for it to be explained in plain language. Why? Because you should never feel pressure to sign something you do not understand.

Your Retainer agreement should clearly outline:

  • Lawyer’s fee with a lawsuit
  • Lawyer’s fee without a lawsuit
  • Any time period for you to change your mind without penalty
  • The services they’re agreeing to provide for the fee you’re paying

Settlement Statement: A breakdown of your settlement and all of the expenses of your case that will get paid before you get paid. You’ll usually get a Settlement Statement at the end of your case (good firms will talk about Settlement Statements the whole time and even show you how yours is changing as your case goes on). The below is a table showing many of the key elements of a settlement statement, although you can expect the lawyers’ version to not look as nice. 

Mighty is using its data-driven, nerdy know-how to help people after an accident. Mighty Law lawyers charge lower rates and commit to a Code of Conduct that forbids behaviors typical among billboard injury attorneys, such as quid pro quos for referring people to their doctor friends. Plus, you can work with a Mighty Law lawyer at no cost for up to 60 days if no claim has been filed.

Mighty is now helping people in Connecticut, Georgia, and Texas.

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