The Schatten Law Firm strives to maximum the client’s financial recovery that is recovered by the firm’s clients by offering lower attorney fees. In Colorado, many individuals that are injured in car accidents and other personal injury actions can pay contingency attorney fees that are up to 40% of the gross recovery of their settlement or judgment if the case proceeds to litigation. And, for pre-litigation cases, many individuals in Colorado can pay a contingency fee from 33% to 35% of the gross recovery for pre-litigation. It is important to note that each law firm sets its own attorney fee rates and many firms can charge different amounts for both litigation and pre-litigation work that can be different from these rates. Many large law firms have to charge high attorney fees rates to cover the cost of expensive, multi-million dollar television advertising and other marketing efforts plus overhead.
At the Schatten Law Firm, the attorney fee rates that we currently charge for litigation can range between 25% to 32% of the gross recovery for litigation and 25% to 29% of the gross recovery for pre-litigation. We set our rates after our initial meeting with our clients. We carefully discuss the contingency fee rates with our clients. We are often able to offer lower and more attractive attorney fee rates for our clients because we keep our overhead low.
It is important to understand the difference between pre-litigation and litigation. Often, personal injury lawyers try to settle cases in pre-litigation which means settling a case before having to file a lawsuit. In pre-litigation, among many other steps, the lawyer will work with the client to understand the case, order the police report and medical records, send a demand letter and try to negotiate settlement. If the case is settled in pre-litigation, then a lawsuit is avoided. However, if a lawsuit is filed, then the case proceeds to litigation. It is important to note that the vast majority of cases that are in litigation are often ultimately settled without having to go to a jury trial or judge trial.
To illustrate the importance of lower fees, lets look at a hypothetical example. Lets assume that a client is seriously injured in a car accident. Lets also assume the case was not settled in pre-litigation. Lets assume in this example that the case proceeds to the filing of lawsuit which starts the litigation. Lets assume this that the case gets settled for $ 250,000.00 in litigation. In this hypothetical example, a law firm charges 40% contingency fee of the $ 250,000 gross recovery, then the client will be required to pay an attorney fee of $ 100,000. That calculation is 40% contingency fee * $250,000 gross recovery = $100,000 for the attorney fee in the case. Further, on top of the attorney fees, the client will also potentially have to negotiate and pay back medical expenses, health insurance (known as subrogation) expenses and legal expenses out of the settlement.
However, if the client is able to work with a law firm that charges lower attorney fees, then there can be large cost savings. For example, in this hypothetical example, lets assume the Schatten Law Firm can charge an attorney fee of 30% of the gross recovery. In this hypothetical example, the attorney fee charge on the $ 250,000 settlement at a 30% contingency rate would then be $ 75,000. That calculation is 30% contingency fee * $ 250,000 gross recovery settlement = $ 75,000 for the attorney fee in the case. As previously noted, on top of the attorney fees, the client may also have to pay back medical expenses, health insurance (known as subrogation) and legal expenses out of the settlement. Thus, this hypothetical example shows that there is a potential savings of $ 25,000 when comparing a 40% contingency fee compared to a 30% contingency fee in a $ 250,000 a settlement.
Those savings will obviously be different and lower if the settlement is lower. For example, if another hypothetical case is settled in litigation for $ 50,000, then a 40% contingency fee of the gross recovery would be $20,000. The calculation of the attorney fee is $ 50,000 gross recovery * 40% contingency fee = $ 20,000 attorney fee. Meanwhile, a 30% contingency fee of the $ 50,000 settlement would be $15,000 attorney fee. The calculation is $ 50,000 gross recovery * 30% contingency fee = $ 15,000 attorney fee. Thus, the potential savings in this second hypothetical example is $ 5,000.
It is important to recognize that every case is unique. A settlement of a personal injury case is based on many variables including the nature of the case and liability (proving the defendant was at fault), the extent of the damages, the amount of available insurance, the likeability of the client, the quality of the lawyers and many other factors. The bottom line is that lower attorney fees can be an important factor to allow injured clients to maximize their financial recovery in personal injury cases.