Attorneys want to help their clients obtain adequate compensation for their injuries. At the same time, lawyers want to ensure they are paid fairly for their effort. To that end, an attorney may use one or more fee structures when determining how much to charge you to litigate your case. Here's a description of the different billing methods to prepare you for negotiating with the attorney about the fee he or she will charge.

Percentage-Based Fee

This particular fee structure, commonly known as a contingency fee, involves the attorney charging you a percentage of any compensation you're awarded in your case. For instance, if the auto insurance company gives you $100,000 to settle your case, your attorney would take a percentage of that award (e.g., 30 percent) as his or her fee for litigating the case.

In this type of fee arrangement, the attorney doesn't get paid unless and until you win. This makes it a good option for people who may not have the cash to pay an attorney upfront. However, the fee does reflect the risk the attorney is taking, with many charging anywhere from 33 to 40 percent. Additionally, attorneys tend to be very selective about the cases they take on contingency. So if your case is not very strong, the attorney may use a different fee structure or decline to take your case.

Hourly Rate

Another common fee structure attorney's use is to charge the client an hourly rate to litigate the case. Typically the attorney will estimate how long it will take to obtain a resolution and then multiply those hours by an hourly rate. For instance, an attorney's hourly fee can land anywhere between $150 and $400 per hour. If the attorney estimates it will take 30 man hours to resolve your case, you could expect to pay between $4,500 and $12,000 in legal fees.

Most attorneys require clients to pay a portion of the estimated cost upfront, which means you have to have the money on hand to hire the person. However, an attorney may be more willing to take a weak case since the risk of not getting paid is significantly reduced. Lastly, if you get a very large award, you don't have to worry about giving up as big of a chunk as you would in a contingency fee agreement.

Flat Fee

Although this type of fee schedule is not seen very often in accident lawsuits, sometimes attorneys will charge a flat rate for his or her service. For example, the lawyer may bill you $5,000 to handle your accident case from start to finish. This is a good option because you're charged the same price regardless of how long it actually takes to litigate the case, which is good if you have limited funds and/or the lawsuit goes on for longer than expected.

Typically, though, the attorney may only do this in cases where the person is fairly certain he or she can litigate the case within the number of hours the flat fee represents. Therefore, lawyers may be extremely picky about the cases they take; meaning your case will likely have to be a slam dunk and/or the person you're suing must be willing to settle quickly. Additionally, you still have to pay the whole amount even if your case is resolved in one hour.

Asset-Based Fees and Legally Mandated Fees

Attorneys use two additional fee structures when assessing charges. However, these fee structures typically aren't used in auto accident or personal injury cases.

An asset-based fee is one where the attorney charges the client based on the value of the asset involved. For example, an attorney may charge more to help a client close on a million dollar house than they would on a house that costs only $100,000. The attorney may use a modified version of this fee structure by charging a tiered contingency fee. For example, charging 33 percent for the first $100,000 of an award and then 25 percent for the second $100,000.

A legally mandated fee structure comes into play when the law restricts the amount an attorney can charge for certain types of cases. For instance, attorneys can't charge more than 25 percent or $6,000 (whichever is less) of whatever the client is expected to receive in Social Security back pay. This may only come into play if you were injured so badly in the accident that you need to apply for disability benefits and your attorney agrees to help you.

For more about this topic, connect with a personal injury attorney in your area.