How Do Lawyers Calculate My Injury Settlement?

When your case settles, your lawyer’s job is to make sure you understand exactly where every dollar goes and why. Personal injury settlements are based on a contingency fee agreement, meaning your attorney only gets paid if they recover money for you. Typically, the fee ranges from 33% to 40% of the total settlement, depending on whether a lawsuit was filed or the case went to trial. The reason for this range is that cases that require filing suit or going to court usually involve far more work, risk, and expense for your attorney.

After the attorney’s fee is deducted, the next step is to pay case-related expenses, which can include filing fees, expert witness reports, depositions, medical record requests, and court costs. Then, your lawyer will address your medical bills and any outstanding liens related to your injury treatment. These can include hospitals, doctors, chiropractors, or health insurance companies that covered your care. One of the most valuable things a good injury lawyer does is negotiate these bills down—sometimes by 20–70% or more—so you walk away with a larger net recovery.

Here’s a simplified example:
Let’s say your case settles for $100,000. Your attorney’s contingency fee is 33.3%, or $33,300, and your case expenses total $2,000. You also have $30,000 in medical bills, which your lawyer negotiates down to $21,000. That leaves you with about $43,700 in your pocket as your final net settlement.

This process ensures transparency and fairness, but more importantly, it maximizes your outcome. Without an attorney, you might accept a low offer and still be responsible for paying your full medical bills. With an experienced lawyer managing your case, not only do you likely receive a much higher settlement, but your medical bills and expenses are handled strategically so that your net payout is as strong as possible.

In most states, including Texas, personal injury settlements are not taxable unless they include compensation for lost wages, since the purpose of these settlements is to reimburse you for your injuries rather than serve as income. This means that the amount you receive after all deductions is typically yours to keep, tax-free.