The personal injury legal industry is worth about $53.1 billion in the United States as of 2022. With so much money on the line, it’s no wonder that over 64,000 personal injury law firms operate in the country. But how exactly do personal injury attorneys turn winning cases into big profits?
Most Cases Settle Out of Court
According to the Bureau of Justice Statistics, only around 3-4% of personal injury cases actually go to trial. The vast majority end up settling out of court. For lawyers, settlements are much quicker and cost less in legal fees than a full trial. They can rack up more cases and payouts by settling.
In fact, around 67% of compensation for personal injury comes from settlements, not trials. Settling cases means lawyers get paid faster.
Lawyers Take a Percentage of the Payout
Whether cases settle or win at trial, personal injury lawyers rarely charge hourly fees. Instead, they take a percentage of the final compensation or settlement amount – usually between 33-40%.
So, it’s in the lawyer’s interest to secure the maximum payout possible, as their fee rises too. The average settlement or compensation is $52,900, meaning a lawyer could earn $15,870 – $21,160 per case on average.
Experienced Lawyers Get Higher Payouts
Statistics show that hiring an experienced personal injury attorney leads to far higher payouts. Around 91% of people represented get settlements versus only 51% without representation. With a lawyer, the average payout is nearly 3 times higher too.
So, skilled lawyers can negotiate much larger settlements, which again means a bigger percentage fee for them in the end.
Types of Cases Result in Varying Payouts
The type of personal injury case also impacts potential profits for lawyers. For instance:
- Auto injury cases have a median $16,000 payout
- Premises liability cases come in at around $90,000
- Medical malpractice has an average payout of $679,000
- Product liability cases average $748,000
So, lawyers who take on more complex cases like medical malpractice can earn much larger fees if successful.
Lawyers Sometimes Cover Expenses
Many personal injury attorneys front the costs of things like court fees, expert witnesses, investigations, and other legal expenses. These can mount up in complex cases.
However, lawyers recoup their expenses from the final payout. Covering costs and risking no fee allows injured clients to pursue claims they otherwise couldn’t afford. So, it expands potential profits for the lawyers too.
Building a Strong Reputation is Key
One of the best ways for personal injury lawyers to increase their profits over time is to build a strong reputation for getting results. Christopher Smith, a litigation attorney at Winters & Yonker, P.A., a recognized Clearwater personal injury law firm, advises that being a lawyer with a proven track record of large settlements and trial wins will attract more clients with high-value cases. Their expertise and negotiation skills often increase over time as well. A good reputation translates directly into higher demand and more lucrative cases down the road.
Experienced personal injury lawyers earn large profits by taking a percentage of the compensation from high-value, complex cases. They also benefit financially from settling cases quickly out of court rather than going to trial. Securing the largest payouts in the most efficient manner leads to the biggest profits.
