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Hi, everybody. I'm here with Michael Epstein. Michael is a New Jersey attorney and the partner and founder of Epstein Law Firm. Michael, let me ask you this question, if there was one thing that you could tell everybody watching this video that would really help them a lot, what would that be?
Well, I probably have more than one, but what I would say is the one for today is in the plaintiff's personal injury or professional malpractice, which includes medical malpractice and even employment discrimination cases and stuff like that where you need to sue and you're seeking to recover a certain amount of money. Most lawyers, if not all, will take the case on a percentage, which is known as a contingency, and many people will say, "What does that mean? How does that work? How much is it going to cost me?"
So if you're in a car accident or a construction accident, how much will this cost me to try to get the compensation for my injuries, harms, and losses? And when you hire a plaintiff's personal injury attorney or malpractice attorney, he or she or the firm will handle the case on a percentage basis, meaning the firm receives a fee only if the firm is successful in getting a recovery. And the percentages in New Jersey are set by statute and there's actually a sliding scale for every $750,000 that is recovered. So it doesn't cost the clients anything to bring the lawsuit. In addition ... Excuse me.
Most plaintiff's attorneys, if not all, will front the cost of the case. What does that mean? Well, to bring a case has costs associated with it. There are filing fees, deposition fees, expert fees, report fees, medical records. There's a lot of costs that go into pursuing a ... Especially a high level case. And the plaintiff's firm, most will front the cost and get reimbursed back only if they win. So that's what the contingency means is the lawyer is going to be putting his or her or the firm's time out at no compensation unless they're successful, as well as their money.
Now I think some people need to understand that when they're looking for attorneys to handle these contingency or percentage cases, they need to ask one question, how do the costs work? I understand that you're going to be paying the cost on my behalf and get reimbursed at the end, and what I'm specifically driving at are some firms charge interest on the costs. So if it's $5,000 in expenses at the end, it may actually be $7,000 or $8,000 to the client because that comes off the top then the fee comes in. So in $100,000 case, the easy example, $10,000 of costs, that means a net recovery of $90,000, a third off of $90,000 in not simple example would be $60,000, would be going to the client, $30,000 would go to the lawyer for a fee, $10,000 to reimburse the costs.
Not if the firm charges interest on those expenses, and some firms charge a very high rate of interest, which the client doesn't know until the very end. And if the interest on that $10,000 is $7,000, guess what? The recovery is a $100,000 minus $17,000, now you're down to $83,000. You have about a $27,000 fee, that person's getting $55,000, $54,000 instead of the $60,000 before. Because every dollar that is spent in a case is really two thirds the client's money and one third the lawyer's money because it's going to come back at the end.
So I think it's really important when potential clients are meeting with a lawyer that they understand the fee arrangement. Every lawyer, and oftentimes they say, "Listen, this is set by statute. We all do it similarly." And it is similar, but that distinction on the interest I really do think is important because many firms, including mine, don't charge any interest at all. We put the money out on behalf of the clients and we have it out for, it could be two, three, even four years, and then we get repaid at the end.
So I think that is really important for people to know that's how the costs work, that's how the fee works, and there are some wrinkles that come along with that arrangement, but that's really how it works, and I do think that people out there need to understand it because most people don't because they've never had the situation arise until they're actually injured. And when you're injured, you may not be thinking clearly, you may not be fully educated when you're making the decision of which lawyer you're going to be hiring.
Michael, thank you for sharing that. That's really valuable advice and I agree that probably far few people than we imagine actually know that. Thank you very much for sharing that and spending time with us today.
Always good to see you. Be well, thank you.
You too.
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