Contingency Fees Explained: What to Put in Writing

A contingency fee is a way of paying a lawyer that depends on the outcome. Instead of billing by the hour, the lawyer is paid a share of the money recovered for you. If nothing is recovered, the agreement may say no fee is owed. This method is common in personal injury cases, but the details of each agreement can differ a great deal.

How a contingency fee works

In a typical arrangement, the lawyer agrees to take your case and is paid a percentage of any settlement or court award. The percentage is set in the written agreement. Because the lawyer's pay depends on the result, the lawyer usually has a strong interest in the case moving forward carefully, but no one can promise a particular amount.

The key point is that the fee is tied to money recovered. Before you sign, make sure you understand what counts as a recovery, when the fee is calculated, and what happens to the money before it reaches you.

What the agreement should state

A written contingency agreement should describe the percentage, and whether that percentage changes at different stages, such as before a lawsuit is filed, during litigation, or at trial. It should explain how case costs are handled, including whether they are deducted before or after the fee is calculated. It should also say what you owe if the case ends without money.

Ask the lawyer to walk you through a sample calculation using a made-up number. This shows how the fee and costs would be subtracted, and it makes the terms easier to understand. A sample calculation is not a promise of any result.

Costs and who pays them

Costs are separate from the fee. They can include court filing fees, records requests, medical report charges, investigator fees, and fees for professional witnesses. Some agreements say the firm advances these costs and takes repayment from the recovery. Others require the client to pay certain costs as they arise.

Ask who pays costs if the case does not produce money. Find out whether you would owe repayment, and whether that obligation is limited in any way. This question matters a lot, because costs can grow over time.

Ask for a running statement of the costs the firm has paid, and how often you will receive an updated total. A clear running total helps you understand the bottom line as the case moves forward.

Settlements and how money is split

Many contingency cases end in a settlement. Read how the agreement defines a settlement, including whether a structured payment or a non-cash benefit is included. Ask how the fee and costs are subtracted, and when you will receive your share. Ask who approves a settlement offer. In most cases, the decision to settle belongs to the client, but the agreement should say how that works.

Ask how the firm will keep you informed about offers. You should know when an offer is made, what it contains, and what your options are, in writing if possible.

When the case ends without money

Some agreements say no fee is owed if no money is recovered, but costs may still be owed. Other agreements say something different. Read this section carefully, and ask the lawyer to explain it in simple terms. If the agreement is unclear, ask for a change before you sign.

What to check before you sign

Before you sign, make sure you understand the percentage, the cost terms, the settlement process, and what happens if the case is unsuccessful. Ask for a copy you can keep. Ask how you can end the relationship if you change your mind, and what fees would apply if you do. Take the agreement home and read it when you are not in a meeting.

Many people find it useful to bring a trusted friend or family member to the review. You do not need to rush, and a careful lawyer will answer questions about each term.

Ask how the firm will tell you about each cost before it is charged, and whether it needs your approval before spending a large amount. These questions can prevent surprises at the end of the case.

Where to get more help

If cost is a concern, or you are unsure about an agreement, start with the USAGov legal aid page, which lists free and low-cost programs. The Legal Services Corporation site lets you search for an LSC-funded provider by address or city.

Frequently asked questions

Is a contingency fee the same as a free case?

Not exactly. Many agreements have no upfront fee, but a percentage is taken from any recovery, and case costs may be owed. Read both parts of the agreement.

Can the percentage be negotiated?

Some agreements leave room for discussion, and others are set by the firm. Ask whether the percentage is fixed and whether it changes at different stages.

Do I get a copy of the agreement?

You should. Ask for a signed copy and keep it with your other important papers. If the firm changes any terms later, ask for the change in writing.

What if I am not satisfied with my lawyer?

Ask what your options are under the agreement and under your state's rules. Your state bar may have information about how to raise a concern about a lawyer.

Related: Browse guides on legal topics and personal injury lawyers.

This page is general information, not legal advice. Laws change and every case is different — talk to a licensed attorney about your situation.