Fee Free Guarantees in Michigan Law Cases

Written by Steven Matz on . Posted in .

“Does a fee-free guarantee mean I don’t have to pay anything if the lawyer doesn’t win?”

No, you are still responsible for other costs. Costs and fees are two different things.  Please read this so that you will have the information before you start interviewing attorneys about your auto injury or other personal injury case in Michigan.

Filing a Car Accident Claim

If you are hurt in an accident, or through what you think is the fault of someone else, you may be thinking about filing a legal claim or a lawsuit against them for money damages to pay you back for medical expenses, work time lost, property damage, or for the damage to your body and mind that happen when you get hurt.

You have seen or heard many ads on TV, the Internet and on radio (billboards, too!) about lawyers who handle personal injury cases. Because these ads look and sound basically all the same, some of the lawyers try to sound different by suggesting that they have a special deal for you where you don’t have to pay anything to have a case.  While the wording is clever, doesn’t it sound like if you get money, the lawyer doesn’t take any of that, but gets paid separately, so it is “free” to hire the lawyer?

It’s Not Guarenteed

Of course, this is not the way it really works.  The only thing that is “guaranteed” is that if you don’t get money, neither does the lawyer! Listen carefully to these ads, and watch the fine print flying by at the bottom of the picture (if you can even see it).  When you hire a lawyer—any lawyer—to handle a personal injury case, such as an automobile negligence case, you are responsible to pay all the expenses that the lawyer puts out to look into your case, and to prepare it, win or lose!  And there is more.

If you don’t win your case (and many trials are won by the defense, not by the victim), you may also be responsible to pay many of the costs your opponent spent to fight you! 

This is something to take very seriously. When you think about starting a case, you need to know that you are responsible to pay your own lawyer’s expenses win or lose, and you could be on the hook for thousands or tens of thousands of dollars in opponent’s costs and penalties if you don’t win. Your lawyer doesn’t pay the penalties—you do.

Case Costs

Case costs are different from attorney fees.  The costs are things the lawyers spend money on to evaluate and prepare your case—things like ordering your medical records, hiring experts to evaluate accident evidence, meeting with your doctors to find out what they have to say, paying court reporters to come to depositions, and paying court filing fees.  These expenses are paid up front by your lawyer, who keeps track of them as your case goes along. The defense is doing the same thing, keeping track of how much it is spending to fight you. In addition, the defense is paying its lawyer by the hour, so the more work that is done on your case, the more the costs are mounting both on your tab and at the opposing lawyer’s office.

The attorney fee, on the other hand, is simply the percentage you and your lawyer agree upon that the lawyer will charge out of any settlement or verdict you get, after the case costs your lawyer has spent are first paid back to the lawyer.

So you can see that guaranteeing you no fee if you don’t win doesn’t promise anything special.  A percentage of nothing is nothing.  But what about the case costs? Here is an example:  Let’s say you have an auto accident case, and hire a lawyer for a 33 1/3% fee after costs are repaid. You end up settling your case for $100,000.  The lawyer spent $3,000 to take depositions, hire an expert to confirm that you were not at fault, and to obtain your medical records and personal history information, among other charges.  Here’s the math:

Settlement: $100,000
Attorney spent: $3,000
Actual settlement: $97,000
Typical 1/3 fee: $32,333
Client gets: $64,667

Suppose you negotiated with your attorney before you signed anything, and said something like “I have done some checking, and there are many very good attorneys in Michigan who have had million dollar personal injury cases over and over again—with so many choices, why should I pay the maximum fee allowed—33 13%?”  If you google “MCR 8.121” you will see the rule in Michigan that lawyers have to follow about contingency fee (percentage) cases.  Now take a look at section D.  It says right there that a lawyer can charge you less than the maximum if they want to!

Let’s just take the same money example we used in the chart above, using a lower fee, and see how you would come out financially.  The only thing we are changing is the attorney fee, which is something you could have negotiated before you signed anything:

Settlement: $100,000
Attorney spent: $3,000
Actual settlement: $97,000
A 22% fee: $21,340
Client gets: $75,660

Look at the difference.  If you paid the same lawyer, same case, just 22% plus costs, you would get $10,993 more in your pocket than if you had signed up the same lawyer for 33 1/3%.

Don’t forget that you have negotiating power when it comes to the contingency fee.  The case costs are a given—the lawyer cannot tell you that the fee does not take into account the money the lawyer will spend to prepare your case.  You also cannot escape the potential to have to repay your opponents for the costs and fees they spend to defend themselves, if you don’t win.

Next time you see a lawyer ad that suggests that it costs you nothing to file a claim or lawsuit against somebody, ask yourself what kind of a “guarantee” you are really getting.

Hiring a Law Firm

You will find that there are many fine law firms in Michigan that handle auto injury cases. Matz Injury Law is one of them.  As with most firms, we don’t charge you to ask questions, and if you hire us, of course there is no fee if we don’t get you money.  But we think what makes us special is not only our decades of good work for good people all across the state. It’s also our 22% fee—not the 33 1/3% maximum charged by other firms that handle the same kinds of cases.   We would appreciate it if you would call us to see what we can do for you if you or a family member has been in an accident involving any kind of vehicle, bicycle, motorcycle, ORV—even if you were a pedestrian.  We can talk about your police report or any other questions you might have.

Steven Matz

Written By Steven Matz

Steven Matz
Steven J. Matz is a founding shareholder of Matz Injury Law. The firm’s concentration is on personal injury litigation, with an emphasis on traumatic brain injury. Mr. Matz earned a Bachelor of Arts degree with high distinction and highest honors in 1974 from the University of Michigan and a Juris Doctor degree in 1977 from The George Washington University National Law Center. Mr. Matz lectures and publishes in a number of areas, including ethics, marketing, trial tactics, and head injury. Mr. Matz has served on the Michigan Association for Justice Executive Board and currently serves the Michigan Attorney Discipline Board as a Hearing Panel Chairman and Master. He is also a member of the State Bar Committee for Character and Fitness.
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The maximum contingency fee permitted by law is actually 33 1/3%. Michigan court rules require that the attorney fee be computed on the net sum recovered after deducting all disbursements properly chargeable to the enforcement of the claim.

What does 22not33 mean, exactly?

We can charge 22% while virtually all other injury attorneys charge 33 1/3% because we are very, very, good at obtaining results for our clients. 

We do not spend millions of dollars on television ads; instead, we offer a lower fee to all our clients.  We do not have dozens of lower paid associates handling our work. All our clients are represented by Steven and Jared Matz. Steven Matz started the firm in 1977 and since then has dedicated his life to representing injury victims.  Jared joined the firm in 2016 but grew up listening to stories, discussing theories, and generally learning at the dinner table about how to effectively and compassionately represent injury victims. Jared Matz was literally born to represent individuals involved in motor vehicle crashes.

All of our cases are handled on a contingency fee and all our cases are handled at 22%. Whether the case settles or goes through trial, the fee does not change. While our competitors make excuses as to why they charge so much, we are obtaining results for our clients at a lower fee.

At a typical television advertising law firm, your first call will be handled by a receptionist, who may refer you to an intake person, who will discuss your claim with an intake manager, who then discusses your claim with an associate, who may then report to a partner. You may never speak with the person whose name is at the top of the letterhead. At Matz Injury Law you will always speak with either Steven Matz or Jared Matz.

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22 not 33

Other firms charge 33%
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