Litigation Costs vs. Attorney Fees: What You Actually Pay in Michigan

When you hire an injury lawyer on contingency, two very different numbers come out of your settlement: the attorney fee and the case costs. Confuse the two and the final check can catch you off guard. Here's exactly how they work in Michigan.

At Big League Injury Lawyers, one of the first questions clients ask is simple and fair: "How much of my money do I actually keep?" The honest answer requires understanding a distinction most people have never had explained to them — the difference between attorney fees (what you pay the lawyer for their work) and litigation costs (the out-of-pocket expenses spent building your case). They are calculated differently, and mixing them up is how clients end up surprised at the closing table.

Attorney Fees: The Contingency Percentage

In a Michigan personal injury case, the attorney fee is almost always a contingency fee — a percentage of the money recovered. You pay nothing up front and nothing hourly. If there's no recovery, there's no fee. That's the "no fee unless we win" promise, and it's a real one.

Michigan actually caps contingency fees in personal injury and wrongful death matters. Under the Michigan Court Rules, a lawyer's contingency fee generally cannot exceed one-third (33.3%) of the net recovery. The word "net" matters here, and we'll come back to it. The cap protects clients from paying an unreasonable slice of their compensation, and it applies whether the case settles in a phone call or after a jury verdict.

Litigation Costs: The Out-of-Pocket Expenses

Litigation costs — also called case costs or expenses — are the hard dollars spent to investigate, document, and prove your claim. These are separate from the attorney's fee for their time and skill. Common costs in a Michigan injury case include:

• Medical records and imaging fees charged by hospitals and providers
• Police and crash reports and other public records
• Expert witness fees — accident reconstructionists, treating physicians, economists, life-care planners
• Deposition and court reporter costs
• Filing fees and other court charges once a lawsuit is filed
• Investigators, photographs, and demonstrative exhibits for trial
• Postage, copying, and mediation fees

A modest soft-tissue claim that settles early may run a few hundred dollars in costs. A serious case that goes deep into litigation — with multiple experts and depositions — can run into the tens of thousands. At most reputable firms, including ours, the firm advances these costs and only recoups them out of the settlement or verdict. If there's no recovery, you don't get a bill.

How the Two Interact: "Net Recovery" and the Order of Deductions

Here's where the fee cap and the costs meet. Because Michigan calculates the contingency fee on the net recovery, the standard method is to subtract certain case costs first, then apply the one-third fee to what remains. In practical terms, a typical distribution looks like this:

1. Start with the gross settlement or verdict.
2. Deduct the litigation costs the firm advanced.
3. Apply the attorney fee (up to one-third) to the remaining amount.
4. Resolve any medical liens or subrogation owed to health insurers, Medicaid, or Medicare.
5. The balance goes to you.

Deducting costs before the fee is actually more client-friendly than the reverse, because it shrinks the base the percentage is applied to. Always ask a prospective lawyer whether the fee comes off the gross or the net — in Michigan, it should be calculated to respect the net-recovery rule.

A Simple Example

Suppose your case settles for $90,000, and the firm advanced $6,000 in litigation costs.

• $90,000 gross − $6,000 costs = $84,000 net
• One-third attorney fee on $84,000 = $28,000
• $84,000 − $28,000 = $56,000 before any liens
• Subtract any health-insurance or Medicare/Medicaid liens, and the rest is yours

Numbers vary case to case, and lien negotiation can meaningfully change your take-home. A good lawyer fights to reduce those liens too — that's part of maximizing your net, not just your gross.

Michigan No-Fault Adds a Wrinkle

In auto cases, remember that much of your medical care and wage loss flows through no-fault / PIP benefits under Michigan's auto insurance law, which is a separate track from a third-party liability claim under MCL 500.3135. Contingency fees and cost structures can differ between a first-party no-fault claim and a third-party bodily-injury lawsuit. When you meet with a lawyer, ask specifically how fees and costs apply to each piece of your claim.

Questions to Ask Before You Sign a Fee Agreement

1. Is the fee calculated on the gross or the net recovery?
2. Who advances the litigation costs, and what happens to them if we lose?
3. Can I get an itemized list of costs at the end? (You should.)
4. Does the percentage change if the case goes to trial or appeal?
5. How do you handle medical liens, and do you negotiate them down?
6. Will I receive a written settlement statement showing every deduction before I sign off?

A trustworthy firm will answer all of these in plain English and put the terms in a written agreement. Michigan lawyers are required to provide a written contingency-fee agreement, and you are entitled to a clear accounting of both the fee and the costs at the end.

Bottom Line

Attorney fees pay for the lawyer's work and are capped at one-third of your net recovery in Michigan. Litigation costs are the separate, real-world expenses of proving your case, advanced by the firm and repaid from the settlement. Understanding the difference — and the order they come out — is the key to knowing what you'll actually walk away with. If a lawyer can't explain it clearly, that tells you something too.

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