News & opinion Episode #12: What the heck is a contingency fee?  

Episode #12: What the heck is a contingency fee?  

What is a contengency fee?

For this episode of the Breaking Down The Law Podcast we’re joined by Stewart J. Guss, a personal injury lawyer in Houston who specializes in car accidents resulting in injury. He’s joined by Breaking Down The Law Podcast host, Ashley Rodriguez.

During today’s episode, we’ll be learning exactly what a contingency fee is? While it might seem straightforward, many drivers don’t realize you can often get a lawyer for free with no obligation.

  • The first question you always ask a lawyer is how much is this going to cost me? Nothing upfront for a personal injury lawyer, we will work and never charge you unless we make a recovery. Some lawyers however do charge upfront.
  • Why should I give away some of my recovery when I can just handle it by myself? We work to get you what you’re actually entitled to not what they are going to offer. One thing a good personal injury lawyer will do for a client besides getting the most from the insurance, we will also negotiate all of your medical bills.
  • Some doctors won’t even see you if you were in a car accident but sometimes we can offer you a LOP so you don’t have to pay anything upfront for your medical bills.
  • Our clients are always first, we tell you what your options are and let you ask all of your questions and support your decision on your case

Stewart discusses these points and so many more, so we hope you’ll join us for this episode!

Stay tuned for the next installment of the Breaking Down The Law Podcast with Stewart J Guss and Ashley Rodriguez!

Contact Us: 281-783-3934 or  [email protected]

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Transcript [This transcript was created using an automated transcription service and may contain errors]

Intro : 0:09

Breaking down the law a podcast hosted by attorneys and legal specialists discussing everyday law and how it affects regular people, regular people. Let’s break down the law with our host, Stuart Gus and Ashley Rodriguez. They have the inside scoop on everything legal and newsworthy.

Ashley Rodriguez : 0:34

Welcome to breaking down the law. Today we’re going to talk about contingency fees. What’s the contingency fee, Stewart,

Stewart J Guss : 0:41

Contingency fee means that if you need a great lawyer, you can afford to hire one. Because under a contingency fee system, you don’t pay anything unless and until your lawyer wins your case. And that’s the way we handle like 99.9% of our cases. Interestingly, it’s funny because you know, I’ve been doing this for 25 years. And I always assume that people know that that’s the case that that our Consultations are free. And you don’t pay anything unless and until we win and recover money. Do you know that that’s actually the most common question that we get from new clients that are that are reaching out to us and want to talk to us about an injury accident case?

Ashley Rodriguez : 1:29

I bet because they’re thinking I just got my car towed. I gotta pay for Uber, I got medical bills, I’m taking time off from work, and I just can’t afford a lawyer. Because mostly, when you hear the word lawyer, you think, oh, that’s gonna cost

Stewart J Guss : 1:39

me a lot money. Yeah, yeah. Yeah, yeah, it for certain types of law, it’s true, you know, lawyer certainly can be expensive. And if you need a family lawyer for a divorce or child support, or if you need a criminal defense lawyer for a traffic ticket, or something, you’ve got to pay up front, and there’s no guarantee, you know that they’re going to do any good, you paid your money. The beautiful part about a contingency fee arrangement is that, you know, we’ll talk to you for free, we’ll investigate your case for free. And more than that, we will fight your case to the ends of the earth, without charging you a dime. Unless and until we make a recovery. And we’ve handled, I think, probably 10s of thousands of cases at our firm. Every once in a while because of circumstances beyond our control, we might find on a case for a year or two or even longer. And at the end of the day, you know, maybe a defendant goes out of business declares bankruptcy or an insurance company becomes insolvent, or something else. And even though we’ve put in all that time, and all that effort, and you know, sometimes hundreds of hours of our time, if we don’t make a recovery for our client, you know we want to do is we want to shake our clients and thank them for the opportunity to represent them. Make sure that they understand that we did everything we could and then at the end of the day, they don’t pay us a penny. And hopefully we walk away friends.

Ashley Rodriguez : 3:08

Wow, that almost sounds too good to be true. So what about fees? Are they really worth it? Like my insurance company? Isn’t there going to be fees? What’s the settlement difference?

Stewart J Guss : 3:19

Yeah, so that’s the thing, you know, because people don’t want to, you know, they’re like, you hear people all the time, but like, why should I give a lawyer, you know, part of my recovery? Isn’t that just going to take money off of my table? Let me give you an example. So for example, let’s say someone comes to us, they want to hire us. And let’s say they’ve got, you know, they went to the emergency room and between copays and everything else, and let’s say they’ve got $15,000 in medical bills, well, maybe their insurance company is only offering them 12,000. And then if they want to hire us, and let’s say we charge one third, well, that means that they’re going to lose 4000 of that $12,000, they’ll have even less money to pay bills. So that’s what a lot of people think. But here’s the deal. There’s a lot that goes into that equation that people don’t realize, which is number one, the biggest part of our job is to make sure that we’re getting you what you’re entitled to. So just because the insurance company has offered 12,000 bucks, that does mean that that’s all you’re going to get and that’s the end of the story, take it or leave it. It’s our job to go to work like a dog after a bone, like insurance company. You know, we’re going to try and get you more than 12,000. We’re going to try and get you 20,000 or 30,000 or 40,000 or 100,000.

Ashley Rodriguez : 4:41

the negotiation process right and you’ve been doing this.

Stewart J Guss : 4:45

It’s a negotiation process. But here’s the deal, Ashley goshi ation is break down. We’ll go to court and we’ll fight for your rights. But that’s only part of because what a lot of people don’t realize is that one of the things that a good personal injury lawyer will do for a client, in addition to trying to get the most they possibly can, out of the insurance company. The other thing that we do is we are going to negotiate on those medical bills and any other outstanding, you know, maybe your postage, to get back to may have something called a subrogation, we’re going to try and negotiate down anything that has to come out of that recovery. So what a lot of people don’t realize is that we’re working both sides of the equation for our clients. Not only are we trying to cover as much money as we can for them coming in, but anything that has to be paid out, we’re also negotiating to try and get that down. Sir, coming and going, everything we do is designed to put the maximum amount of net cash recovery into our clients pocket.

Ashley Rodriguez : 5:50

Yeah, that is me. Now, a lot of medical companies, they know if they’re gonna get that money up front, they will negotiate down because then they don’t have to wait for it.

Stewart J Guss : 5:58

Yeah, and that’s another thing that people don’t realize not necessarily related to contingency fee. But a lot of the times doctors won’t even see you, if they know that you’ve been in a car wreck. So one of the things that we could do, we’re willing to offer a what’s known as a letter of protection so that sometimes our clients were able to get the medical treatment they need, not only without paying us up front, but even without paying their medical providers up front. It’s not 100% of the time, you know, and we can’t guarantee it, but that’s one of the things that we’re able to do very, very often and it makes life much much easier for someone who’s been in read.

Ashley Rodriguez : 6:35

Oh, yeah, cuz you’re going through so much like you always say, like, no one wakes up in the morning planning to get in the car.

Stewart J Guss : 6:40

Right? Exactly. You wake up in the morning planning to put on your pants get don’t wake up in the morning planning to get into a car. So pants, no problem. First skirt, I know it’s your pants, or skirt or shoes, no problem. We got this. But a car app comes out of nowhere, like a piece of Skylab falling out of the sky. And by the way, unless you’re old like I am, you have no idea what I’m talking about. So Google, YouTube.

Ashley Rodriguez : 7:14

And that is what Stewart sounds like when he’s gonna settle your case.

Stewart J Guss : 7:20

Don’t worry, don’t worry, we’re having fun on the other podcast. And I love having fun with you. And I love having fun. My clients. Trust me, when we go to court, all of us know how to put on our Warface. But not now not on the podcast. I’m just I’m just trying to have fun.

Ashley Rodriguez : 7:36

Definitely professional when you have to be but there’s sometimes you just gotta have fun.

Stewart J Guss : 7:41

Exactly. So any other questions for me on contingency fees?

Ashley Rodriguez : 7:45

So basically, how does it work? Is there any extra fees? In the end? I hire you on a contingency fee? you settle your case? Are there extra fees? How does it break down?

Stewart J Guss : 7:57

So let me tell you, generally speaking, let’s say it’s a typical car accident case, generally speaking, you’re going to find that the standard contingency fee is going to be one third. Okay. So whatever it is that we’re able to recover from the insurance company, our attorneys fees are going to be one third of that recover. Now, there are a couple of factors that can change that a little bit. So for example, and again, this is pretty standard, we’re going to do everything we can to try and get your case settled a client’s case settled on terms that are perfectly acceptable to the client. And remember, it’s the client’s decision, not ours, we’re going to try and get that case settled without having to file a lawsuit, that probably happens, I’d say about 75 to 80% of the time. But once we do file a lawsuit, the amount of time and effort and support staff that we need to invest in a case goes up substantially. So typically, our attorneys fees go at that point from one third to 40%. If we have to file a lawsuit, and it’s important to make that distinction, not if we go to try, because the thing people don’t realize is by the time we actually walk into a courtroom and go to trial, 99.9% of the work on the case has already been done. If we file a lawsuit, the fee goes from one third to 40%. But again, it doesn’t happen in a vacuum. And it’s only going to happen when our client tells us Yep, let’s do it. I’m okay with it. Go ahead.

Ashley Rodriguez : 9:38

Yeah. So you present to them what the offer is, and you say this is the offer. Do you take it or not? Would you like us to file a lawsuit and go from there?

Stewart J Guss : 9:47

Yeah, exactly. And it’s actually more involved in that process that we do when we talk to our clients, right, really the way that I look at my job and the way that my attorneys look at their job in dealing with our Clients is our job is to give you information and options about what our clients want to do, right? Yes. So do you want to settle? Or do you want to file a lawsuit? Here are the pros, here are the cons. And at that point, we encourage our client to ask as many questions as they need to. But ultimately, and we’ll answer, I’ve spent two hours in a conference with a client before going over the pros and cons. And you got to remember, we work for our clients, they’re the boss, not a client first, always, absolutely. And part of our job, really, the most important part of our job is to keep our clients informed. And when they do make a decision about their case, we really want it to be an informed decision that they eventually make.

Ashley Rodriguez : 10:44

Yeah, and they feel comfortable about the decision, because they’ve heard all of the information.

Stewart J Guss : 10:49

Exactly. And they’re empowered, they’re empowered to take the case in whatever direction they see fit. We asked them to listen to our advice. And we’ll give her advice, because that’s part of our job. And ultimately, as I’ve said before, as a lawyer, when my client tells me to jump, I asked how high. So there were a couple of other things about contingency fee, so that I wanted to mention and expenses. There are some other issues, there are certain types of cases where contingency fees may be a couple of percentage points higher. And that is because for example, it might be a type of case that’s unusually difficult to win. For example, premises liability cases, often take a lot of work and have a lot more uncertainty than a motor vehicle, Brett, so but here’s the thing with us. And with any legitimate attorney, you’re going to know exactly what the fees are, before you hire the lawyer, there’s not going to be any surprises.

Ashley Rodriguez : 11:55

So basically, if you are having a consultation, though, with the lawyer, and they’re not willing to put those fees up front and talk to you about all of them run the other way.

Stewart J Guss : 12:04

Just like you had success that morning, putting on your pants or your skirt. If you have a lawyer and you’re talking to a lawyer, and they’re not willing to give all this information to you up front, at that point, you stand up out of the chair, you put your hat on your head, you turn around and you walk out the door, period, end of story.

Ashley Rodriguez : 12:22

Yeah, you should be able to trust your lawyer and everything should be upfront.

Stewart J Guss : 12:27

Yeah, you know, one of the great things, one of the great joys that I’ve had in practicing personal injury law for 25 years, it’s pretty common that our firm will be retained by a client, who’s had a really bad experience with a personal injury lawyer in the past. And they ask a lot of questions. And they’re very cynical, and they’re very doubtful. And one of my great professional joys in life is I tell those folks, you know, when we meet with them, hey, look, I know that you don’t trust me. And I don’t blame you, because you’ve been burned before. What I’m really looking forward to is three months, six months, a year down the line, when this is all done. And you see how well we’ve taken care of you, and how honest we’ve been with you. I’m looking forward to changing your mind about lawyers. And we we get to do it all the time. It’s terrific.

Ashley Rodriguez : 13:23

So is there anything in specific a potential client should ask a lawyer about contingency fees up front?

Stewart J Guss : 13:31

Yeah, so the contingency fee issue is relatively straightforward. One other thing I do like to mention, and it’s important thing to go over is the thing about expenses. Okay? Oftentimes, when we’re working on a case, we’re going to have case expenses as we represent a client. And those case expenses might be as little as let’s say, $8, for a copy of a police report, or those expenses might be hundreds, or in a really big massive case, even thousands of dollars, perhaps, for an expert witness for an accident reconstructionist. Now, these are fees that our law firm is going to be paying for out of our pocket, we write a check for them, and most lawyers are going to want to get those expenses paid back at the end of the case. And one of the things that I really urge people to ask is, am I going to be responsible for those cases expenses, even if we don’t win my case. Now, our firm, it doesn’t matter if we’ve spent $100 $1,000 or $5,000 or more in case expenses for us. If we don’t win your case, we tear up those receipts. And again, you don’t owe us a dime in attorneys fees. You don’t owe us a dime for our case expenses. We just want to shake hands We want you to know that we’ve done everything we could and we walk away from it. He knows many years later. So with all personal injury lawyers, so that’s one tip I wanted to give everybody who’s listening, ask about how expenses are

Ashley Rodriguez : 15:14

exactly. Most people, you would think, you know, if you don’t win my case, then I have to pay those expenses. Or maybe I’m even responsible for your fee, because the work you did. And that’s what can make people kind of hesitate. Okay.

Stewart J Guss : 15:29

Yeah. And that’s why our legal system is designed to make it as easy as possible for people to be able to hire a really high quality experienced personal injury lawyer to represent them with really absolutely no risk to them. So I guess if there’s anything else I want to add, or if there’s anything I want to say, in conclusion, it’s this. Getting into a car accident is a very complicated situation. Setting aside the injuries that you’ve got, and the medical things that you’ve got going on, your legal situation is just as complicated and just as important. So what I say to people is, look, if you were in a car accident, and God forbid, there’s the Jewish mother, and may, God forbid, you broke your arm. Would you Google? How to fix your own arm and try and do it on your own to save some money? Or would you just get your ear into a doctor and have your doctor treat? Okay? It’s the same thing with the legal end of things. You might think you can handle it on your own, but I guarantee you those insurance companies, they’ve done it thousands and thousands of times they’ve got one job one job only. That’s to pay you as little as possible on your claims. Whether it’s me, my law firm, any of my lawyers court, there’s plenty of great personal injury lawyers out there. If you’ve been hurt, and it’s someone else’s fault. Don’t Google it. Don’t try to do it on your own. hire a lawyer under a contingency fee with no risk. The best that can happen is you get a great outcome. You get a good recovery. The worst thing can happen is like I said, we shake hands, we walk away friends.

Ashley Rodriguez : 17:09

Yes, exactly. If you were hurt in a car accident, make sure you call us just for a free consultation at Stewart j Guss at 281-783-3934. And we’d love to just answer all of your questions.

Stewart J Guss : 17:24

Yep, no commitment, no cost for the consultation. If we can help you great. If not, no problem. We’re glad to just give you some info.

Ashley Rodriguez : 17:33

Thank you for listening to breaking down the law.

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