Beware of Discount Contingency Fee Attorneys

It’s never been easier to compare products and services side-by-side to find the best overall value for your money, which includes finding the right attorney for your personal injury case. 

You want the best attorney you can afford. But some lawyers give consumers a distorted view on what “value” really means in the field of personal injury law.

Most personal injury attorneys work on a contingency fee basis, which means they only make money if you make money. Typically attorneys charge around one-third of the recovery for their labor and expertise (for a more detailed explanation of how contingency fees work, check out this post).

But from time to time, attorneys charge a lot less.

You might see that advertisement and think, “That’s a deal!” But we want to educate you on the various reasons that these offers should be taken as a warning sign and explain how hiring a “discount attorney”you’re your personal injury case can actually end up hurting you and your family.

Reason #1: Contingency Fee Structure is an Incentive

The structure of a contingency fee agreement for personal injury cases is designed to work in the favor of both the attorney and the client at the same time. Since a contingency fee is contingent upon a successful resolution to the case, the client does not owe the attorney any fees unless the attorney recovers compensation for the client.

As we say: Win or Go Home

This ensures the client does not lose if the attorney fails. At the same time, the contingency fee structure also incentivizes the attorney to recover the highest possible level of compensation for the client because that encourages the attorney’s fee is a percentage of that number.

When an attorney charges a lower percentage they can make up the difference in profit by taking on more cases. Since this discount attorney is fighting for less money insurance companies are more likely to settle. This means less work for the discount attorney. 

Everyone wins. Except for the attorney's client.

Reason #2: It’s a Sign of a ‘Settlement Mill’

A low cost might mean the firm is a “settlement mill.” We published a pretty detailed explanation of settlement mills not long ago, which you can read here. But, basically, these firms sign up a lot of clients and turn the cases over as quickly as possible, without much regard to obtaining the best possible settlement for the client or making decisions based on the client’s best interests.

Settlement mills are like heavy metal bands: They make profit from volume.

Settlement mills make a profit from doing a mediocre amount of work for a lot of hurt people. They don't do the best work, which might mean waiting out the insurance company or taking the case to trial. Settlement mills will typically do anything they can to avoid a trial at all costs because the attorney(s) do not have much, if any, experience in court. Advertising a discounted fee is one way to attract a high number of clients without their understanding of the reasoning behind that advertisement.

Reason #3: It’s a (Possible) Sign of a Struggling Business

Maybe that lower fee is a "EVERYTHING MUST GO!" promotion.

Don't make any assumptions about a law firm’s overall financial health just because of a advertisement, but “sales promotions” are quite rare for attorneys. If you do happen to find yourself speaking with an attorney who is offering a discounted contingency fee, it may be in your best interest to ask them why they are doing so. 

Chris Davis
Top-rated, award-winning, attorney practicing wrongful death & serious injury law in Seattle.
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