There are many personal injury attorneys in Phoenix, so many that it seems that all the billboards are owned by one law firm or another. While firms are eager to advertise their name, it also is a fact that firms are not as clear when it comes to how they represent their clients and how they get paid.
The standard advertising line on those billboards is something to the effect of, “We don’t get paid unless we win your case.” While that sounds generous, it also is exactly how plaintiffs lawyers have operated for hundreds of years. Lawyers go to law school knowing that the way they make money is by representing clients in court, winning their case and then taking a portion of those winnings as salary. While it’s plausible that a lawyer could charge a client for losing, realistically it is a business model that wouldn’t survive for very long.
So lawyers represent clients and they take a percentage of the recovery. This is the whole idea. The question is, how much of a percentage are they taking and what does it mean for the client at the end of the day. There are three main factors that affect how big the check is that the injured person gets. First, the settlement size itself is important. If the lawyer works for free but only recovers $5, it won’t be much comfort that you get 100% of the settlement. A lawyer has to be competent and the insurance companies have to respect their abilities to litigate a personal injury case. If the insurance companies feel like they can push a plaintiff’s lawyer around, they will.
The easiest way to get pushed around by an insurance company is to represent clients who really weren’t injured. Every year, thousands of people get in very low-velocity accidents that cause little to no damage to the involved vehicles. Attorneys who represent these clients quickly earn a reputation that is less than stellar. Insurance companies may not settle with these attorneys because they feel like they are representing clients generally who are attempting to litigate fraudulent cases. Obviously not all low impact cases are fraudulent. But over time, an attorney makes a name for themselves. Are they the type of lawyer who handles suspicious cases or not.
Lawyers also must demonstrate to the insurance companies that they have the skill and resources to see a case all the way to the end. Lawyers who are just starting out who work in shared office spaces tend to encounter more resistance from insurance companies than larger firms with proven track records. Again, when insurance companies feel like they can push plaintiffs around, they will.
So the size of the settlement is usually a function of reputation, skill and resources. You want a firm that pays attention to details and has the ability to see the case all the way through.
Once the settlement arrives, the check is deposited in the lawyer’s trust account. The lawyer then pays the medical providers, themselves and then the client. If the lawyer makes no attempt to reduce the size of the medical liens, then it is the client who is the one who gets financially harmed. For example, a case that settles for $10,000 that has $7,000 of medical bills is a case where the client gets nothing. The attorney gets typically a third or more which in this case is more than $3,000. Nothing is left for the client. But if the lawyer works hard with the medical providers to reduce the bills to $1,000, then the client would typically get a little more than $5,000 after fees and expenses.
So if you are doing the math, $5,000 out of a $10,000 settlement doesn’t seem right at all. How is this possible? It is because the lawyer charges 33% PLUS fees and expenses. A lawyer, like a car dealer, can have lots of little hidden expenses such as a “file opening fee.” Lawyers can charge for copies, mileage and phone calls. There are so many small ways that a lawyer can pad the bill that at the end of the day, the attorney might be getting more than 50% of the total settlement.
So, before you hire a personal injury attorney in Arizona for any accident case, there are some questions that you should ask. How long has that lawyer been practicing? Have they ever been suspended by the bar? What type of resources do they have? These questions answer whether or not the lawyer could reasonably be expected to get a large settlement.
Then, the question is does the lawyer have any special relationships with the medical providers? Believe it or not, some lawyers also own portions of the medical clinics that they refer their clients too. These lawyers, obviously, don’t have much of an incentive to reduce their medical expenses.
Finally, the contract that the lawyer offers you answers the remaining questions. What is buried in the fine print? Will the lawyer charge you a file opening fee of $1000? Are there fees for copies, staples and paperclips? Does the lawyer charge a low fee to start but then much much more if a lawsuit is filed? If the answer is anything other than “No,” then brace yourself for your settlement to be far higher than their bottom line amount.
Obviously, I’m writing this blog because the answers to those questions are answers that I can comfortably say out loud. We have been in business for over two decades and have 60+ employees at the firm. We don’t take fraudulent cases. I don’t own a chiropractic clinic and our fee agreements have no hidden fine print. We charge one fee and it doesn’t change no matter what. You can always give us a call for a free consultation.
So, next time you drive around town and see those billboards, now you know how the system works and what to look for. But keep your eyes on the road!
Nick Alcock, Attorney at Law
Here at Alcock and Associates our team and staff are dedicated to helping and representing YOU. The first step is to understand your case. We will take the time to get to know you and your legal situation so that we are best able to answer all of your questions. After your initial consultation with our attorneys, you will know what you are facing and what can happen to your case.
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