The United States is a highly litigious society. With only a few exceptions, an attorney practicing civil law has represented each case.
That is to say that thousands of lawyers practice accident law in Texas, yet the state only represents roughly 8% of the nation’s population. How do all of these attorneys stay profitable?
In this article, we discuss how renowned Attorney Alton C. Todd, founder of The Law Firm of Alton C. Todd, one of the best car accident law firms in Friendswood, TX, states how auto accident attorneys can profit from winning cases.
Winning Equals Profits
If a car accident attorney wants to stay in business, they must win cases. The more cases they win, the more profits they (typically) earn. There are several ways by which winning turns into profits for an auto accident lawyer, such as:
Contingency Fees
Almost every car accident attorney takes cases on a contingency basis, meaning they only get paid if they can win money for their client. Effectively, attorneys bet on themselves to win. If the bet pays, they earn money. And if the bet fails, they get nothing.
That may seem like a dangerous wager, but nearly every lawyer stacks the odds by offering free consultations to potential clients. During these, the attorney examines the case details and determines whether there is enough evidence to proceed, as well as the likely value of any compensation if the lawyer wins.
Most attorneys simply won’t take on a case unless they are certain they can win and the compensation is high enough to be worth the time and effort they put into it.
Client Reputation
Winning also has a secondary effect that leads to increased profits. The more often an attorney wins money for their clients, the more their reputation grows. That, in turn, creates a domino effect. Satisfied clients recommend the lawyer to their friends and colleagues, resulting in more business for the lawyer.
When a lawyer wins a particularly high award or difficult case, they may even receive media attention, which is often just as valuable as advertising and effectively free. If a lawyer can afford it, they might even willingly choose to take a loss (or smaller profits) on a case that will likely improve their reputation because it can result in a larger client base later.
Legal Reputation
There’s one last way that winning begets more winning for attorneys: their reputation within legal circles. Other lawyers and insurance companies typically know which attorneys are particularly skilled in the courtroom or at the negotiating table, and that kind of good standing can help a lawyer win cases with minimal effort.
For example, suppose that a lawyer is known for being particularly effective at getting high awards at trial. In that case, opposing counsel might be more willing to negotiate a higher settlement to avoid going to court. Similarly, insurance companies will pay attention to how well individual attorneys have fared against them in the past.
Winning Auto Crash Lawyers Can Charge Higher Contingency Fees
As a rule of thumb, contingency fees are usually between 25% and 40% of the compensation the client receives, whether from a settlement or a jury’s verdict. An inexperienced lawyer might charge even less just to get clients in the door.
Once a lawyer has a reputation for winning, though, they can charge higher contingency fees. Nevertheless, clients are typically willing to pay that higher fee if they know their lawyer is likely to win their case. It is better to pay 40% to a lawyer that gets you $400,000 in compensation than 25% to one that only gets you $100,000, after all.
Winning Matters For Car Accident Lawyers
Criminal defense attorneys and family law attorneys are paid regardless of whether they win their case. That is because they are typically paid by the hour and ask for a retainer before they take a case. Winning still matters for their reputation but doesn’t affect whether they are paid.
Conversely, auto accident lawyers only make money if they win money for their clients. In doing so, they will usually make a good profit, and the more they win, the more those profits will compound upon themselves. The end result is essentially a win-win for both the lawyer and their clients.
