Everyone has seen the ads and heard the commercials, “No Recovery No Fee!” But what does that exactly mean?

Almost all personal injury lawyers work on a “contingency fee” arrangement. What that means is the lawyer only gets paid (fee) if he gets you money (recovery). There is no up-front money you pay your personal injury lawyer and if your case is lost, nothing is owed the lawyer at the conclusion.

While this concept is simple enough, there are a few caveats. While the lawyer is handling your case, he will have certain expenses, such as court filing fees, medical records, police reports, etc., which have to be paid. You, the client, are responsible for those expenses. Most lawyers, however, will advance this money and recoup it from the settlement proceeds at the end of the case. Some lawyers will ask you to pay the expenses as the case proceeds. Make sure to ask your lawyer how the expenses will be handled.

So “no recovery no fee” means the lawyer can spend years working on your case and will not earn, or be owed, any money if he doesn’t win the case. But what about all those expenses incurred on your behalf if the case is lost? Once again most lawyers will absorb the costs while others will ask you for payment. This is another question you should ask your personal injury lawyer before retaining him. In some states, it is unethical for your lawyer to waive the expenses so make sure you understand the rules within your state.

Any medical bill you incur as a result of your accident is not an ”expense” which the lawyer will pay up front. You are always individually responsible for your medical bills regardless of the outcome of the case.

Now that we’ve cleared that up, I once had a new client think “no recovery no fee” meant a fee would only be paid if he “recovered” from his injury! I’m thinking this would be a novel idea for paying medical doctors!