Why is my lawyer taking more than their 1/3 cut of the settlement?

Asked almost 2 years ago - Baltimore, MD

After about 3 months from my auto accident in January, I was informed yesterday that the final settlement was increased to $17k. Subtract all my medical fees and the final amount between my lawyer and I is $10k. Now I know that she is entitled to 1/3 of this 10k. Simple math shows that 1/3 of 10k is $3333.33. I should be getting $6666.67 after her cut is taken out. However, I was told that I am to get only $5800. The lawyer is taking an extra $2466.67, making her "1/3" almost half. Why is this?

Attorney answers (8)

  1. 5

    Lawyers agree

    Answered . In a personal injury settlement, the contract between the injury victim and their lawyer is typically for a percentage of the total settlement, not the net settlement. Get a copy of the fee agreement with your personal injury lawyer.

  2. 3

    Lawyers agree

    Answered . This is a common point of confusion. I try to avoid it by fully explaining how the math works when I first meet with a new client. The answer to your question cannot be answered directly because we do not have access to the contract. However, my firm's contract would entitle us to 1/3 of the total recovery, not 1/3 after the deduction of medical bills, etc. I am fairly certain your lawyer's contract works the same way, but without reading it, I cannot be sure.

    Remember, the fact that your lawyer got money from the insurance company to pay your medical bills is a direct benefit to you. If he or she did not do this, who would have to pay the bills?

  3. 4

    Lawyers agree

    Answered . Attorneys are entitled too fees taken as a percentage of total settlement and reimbursement of their costs. Your attorney should have gone overasettlement agreement with you explaining this.

    Call for a free consultation at 727-937-1400 or visit us on the Web at www.serviceandjustice.com.
  4. 4

    Lawyers agree

    Answered . Usually 1/3 of recovery. Fee $5666.66 + cost. Not 1/3 of what left after bills.

    The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The... more
  5. 2

    Lawyers agree

    Answered . All of the other answers are correct. I thought I'd add my own calculations so you can see how a"typical" settlement would proceed under your facts: Total settlement = $17,000.00. First to get deducted is the legal fee of 1/3 which = $5,666.66. If there were costs advanced by the lawyer on your behalf, then those costs get deducted next and are paid to the lawyer. These generally would include medical copy costs, court filing fees and the like. Let's assume there were no costs, since you do not mention any. That leaves a net to the client (you) of $11,333.34. Next to be deducted are the medical liens, such as unpaid doctor's bills and any health insurance lien for benefits paid. You describe these as in the range of $7,000.00. Therefore, after these liens are paid, then you would net $4,333.34. However, you state that you are to receive more than that, or $5,800.00. This could only happen under these facts if your lawyer either successfully negotiated down the medical liens to less than what was owed, or voluntarily cut his/her fee so as to net you more of the settlement funds. This is a common occurrence. Your numbers for the legal fees, however, suggest that the full 1/3 fee provided by your retainer agreement was taken, plus perhaps $100 in costs. Therefore, it appears the medical liens were negotiated or reduced in your favor by your lawyer. This is both a typical result, and good work by your lawyer. You must understand that you incurred no out-of-pocket costs or fees in pursuing this claim, and the lawyer bore full risk of no payment for his/her time and efforts in the event no recovery was obtained, and had to wait util the case was over before being paid. That is the trade-off when hiring a lawyer on a contingent fee basis rather than paying hourly rates of $250 to $500 or more in advance as the case progresses.

  6. 3

    Lawyers agree

    Answered . It depends on your retainer agreement. Re-read it. You may be right (or not)

    The above is general information only and is not legal advice. The information provided does not form an attorney-... more
  7. 3

    Lawyers agree

    Answered . Your lawyer is also entitled to be reimbursed for costs in addition to the 1/3 fee. He or she should provide you an accounting.

  8. 2

    Lawyers agree

    Answered . Bottom line is if you don't agree with this, don't sign the settlement release, as the lawyer won't get paid unless you do and the lawyer agrees to giving you your 2/3.

Related Topics

Personal injury

If you suffer a personal injury as the result of the actions or negligence of another, you may seek financial compensation for physical or emotional damages.

Personal injury settlement

Personal injury settlements are agreements made between the two parties of an injury lawsuit. They outline the compensation that an injured party receives.

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