How Much Does a Personal Injury Law Firm Make?

Whether you are an aspiring lawyer, are in law school, or are building a practice, you may be curious about how much law firms can anticipate making annually. The practice of law is highly diverse, and as such, so are the earnings of those working in law firms. Add to that the fact that case values – verdicts and settlements – vary greatly, and it can seem quite difficult to estimate how much law firms in general can expect to make.

Personal injury is one area of law that may also have clients interested in how much the law firm will make. As expressed by Rod Dixon, founder of the The Dixon Firm PC, personal injury cases are generally managed on a contingency fee basis – meaning that the lawyer or law firm does not charge the client for services unless compensation is recovered on the clients behalf. With cases often valued in the millions of dollars, this leaves many clients curious about how much will a personal injury lawyer make from their case.

How Much Does a Personal Injury Law Firm Make?

The legal profession is one that has remained consistent in terms of available jobs and salary stability. In 2014, the Bureau of Labor Statistics (BLS) estimated that through 2024, the number of available legal jobs would only increase, adding more than 43,000 lawyer jobs. For law firms, that means stability in work flow and revenue.

Most personal injury law firms charge a contingency fee of between 33 and 40 percent. In simpler terms, most contingency fees are around 30 percent of the total award amount. For example, if a verdict is rendered in favor of the plaintiff in the amount of $90,000, then the plaintiff can expect the law firm to make around $30,000. The contingency fee will often depend on the type of case, geographic location, and whether it is settled out of court or via trial.

It is important that lawyers and clients both understand the contingency fee agreement, including what legal fees or expenses will be deducted out of the award amount. In most personal injury cases, the law firm will first deduct costs and expenses related to the case (medical records, filing fees, expert witnesses, etc.), will deduct their percentage, and then the remainder will be paid to the client.

What About Lawyer Salaries?

Instead of making an average salary, most personal injury lawyers earn a percentage of the contingency fee. Based on annual data, this can be broken down into an average wage. According to the BLS, in 2015, the average “wage” for a lawyer with a doctoral degree was $55.27 per hour, or $114,970 per year. This wage was calculated using an average of all lawyers in all geographic areas. Other websites and data methods are more conservative, estimating the average salary for a personal injury lawyer to be around $73,000 per year.

Ultimately, how much an individual lawyer makes will depend on a variety of factors. Many lawyers earn much more than $55 per hour, while others earn much less. Lawyers working in large law firms are likely to make substantially more than lawyers working for non-profit agencies, or those just completing law school. Other factors that may impact how much a lawyer makes include:

  • Level of education
  • Experience managing the specific type of case
  • Certifications
  • Number of State Bars the lawyer is accepted into
  • Geographic location (lawyers in metropolitan areas are likely to make more than those in smaller, suburban areas)
  • Peer reviews and recommendations
  • Customer reviews and recommendations
  • Whether the lawyer works independently or with a law firm
  • Whether the law firm is public or private

What about Salary and Job Outlook?

While the legal field seems to be relatively stable in terms of salary and available jobs, changes in society and laws could change that in the future. Proposed changes in tort law, for example, could place damage caps on personal injury cases. Capping damages that plaintiffs can recover could cause lawyers and law firms to question whether the case is worth the time and revenue.

Unfortunately, strict damage caps could be a lose-lose for everyone involved. Not only will many lawyers refuse to take cases if the expected award is small compared to the costs required, but that will leave many who are injured and deserve justice without the ability to fight for their legal rights or get compensation they deserve.


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