Let's assume that you are involved in a car accident in which you sustained an injury.A� You decide to hire a personal injury lawyer.A�A�You sign a typical contingency fee contract in which the attorney fees are based upon aA�percentage of the gross settlement.A� For our purposes, we will make thatA�percentage 33 1/3% (or one-third).A� Let's also assume that your medical expenses are $4,000, and the insurance company has made a final settlement offer of $6,000.A� If you and your lawyer mutually agree that the settlement offer should be accepted, this is how your net recovery would be initially calculated:
Gross Settlement:A� $6,000
Attorney Fees:A� $2,000
Medical Expenses:A� $4,000
Client's Net Recovery:A� $0.00
Even if your lawyer is able to negotiate the medical expenses from $4,000 to $3,000, you would stillA�only net $1,000, while the lawyer would take $2,000 in fees.A� Unfortunately, thisA�is a commonly accepted practice with many personal injury lawyers and is probably one of the reasons why personal injury lawyers have such a bad reputation.
Even though myA�fee percentagesA�are typical of other personal injury lawyers, IA�calculate a settlement on the belief that the client should take a greater net recovery than the attorney's fees.A� This is a practice I have followed throughout my career and continue to follow today.A�A�A�In the example above, I would reduce my fee so thatA�the client'sA�net recovery wouldA�be greater than the attorney fees.A� This is how my calculation might look:
Gross Settlement:A� $6,000
Attorney Fees:A� $2,000 reduced to $1,400
Medical Expenses:A� $4,000 reduced to $3,000
Client's Net Recovery:A� $1,600
As you can see, IA�reduced my fee from $2,000 to $1,400.A� After paying the $3,000 in negotiated medical expenses,A�the client'sA�net recovery is nowA�$1,600, which is $200 more than the attorney fees.
There are, however, rare and extenuating circumstances where I would consider taking a full fee even if it means that the client recovers less.A� ExamplesA�would include a clientA�forcing me to accept a settlement offer which is unfair; a client being dishonest with me about their case; or where a client refuses toA�cooperateA�inA�prosecutingA�the case.A� Luckily, those situations are very rare and I may have refused to reduce my fees maybe five times in my entire 16 years of practice.A� However, where the client is cooperativeA�in prosecuting their case, then I believe the client should be fairlyA�rewarded in the net result of the settlement.A� Hopefully, more lawyers will come to follow this practice in the future.