Contingency Fee

When facing a legal dispute, one of the biggest concerns people have is the cost of hiring an attorney. Many individuals hesitate to seek legal help because they fear high hourly rates or upfront retainers. Fortunately, in many cases—especially personal injury and civil litigation—attorneys offer what is known as a contingency fee arrangement. This payment structure helps make legal services more accessible to people who may not otherwise afford them.

This page explains how contingency fees work, the advantages and disadvantages, common percentages, and important considerations before entering into such an agreement.

What Is a Contingency Fee?

What Is a Contingency Fee?

A contingency fee is a payment arrangement between a client and an attorney in which the lawyer’s fee depends on the outcome of the case. Instead of paying upfront, the client agrees to pay the attorney a percentage of the compensation recovered, whether through settlement or trial verdict.

If the attorney does not secure compensation, the client typically pays no attorney’s fees. This “no win, no fee” model is common in personal injury, wrongful death, medical malpractice, employment law, and other civil cases.

How Does a Contingency Fee Work?

The process is usually straightforward:

  1. Initial Agreement – Client and attorney sign a written agreement outlining the percentage the lawyer will receive.
  2. Case Development – The attorney investigates the claim, gathers evidence, negotiates with the opposing party, and prepares for trial if necessary.
  3. Outcome – If the case is successful, the attorney receives their agreed-upon percentage of the recovery. If unsuccessful, the client owes no legal fees (though there may still be costs like court filing fees or expert witness expenses, depending on the agreement).

For example, if a lawyer and client agree to a 33% contingency fee and the client recovers $90,000 in a settlement, the lawyer’s fee would be $30,000, with the client receiving the remaining $60,000 (minus any case expenses).

Benefits of a Contingency Fee

This fee arrangement offers several advantages:

  • Access to Justice – People who cannot afford hourly legal rates can still pursue claims.
  • Risk Sharing – The attorney assumes much of the financial risk. If the case fails, the lawyer does not get paid.
  • Motivation for Success – Because attorneys only get paid if they win, they are highly motivated to maximize recovery.
  • No Upfront Fees – Clients avoid the burden of paying retainers or monthly invoices.

Together, these benefits make contingency fees a practical and empowering option for clients who need skilled legal representation without the financial strain of traditional billing.

Potential Drawbacks

While contingency fees open doors, they also have limitations:

  • High Percentages – The fee may feel substantial compared to what an hourly rate might have cost, especially in cases resolved quickly.
  • Case Selection – Attorneys are selective and often only take cases with strong chances of success.
  • Client’s Net Recovery – After legal fees and expenses are deducted, the client may receive less than expected.
  • Not Available in All Cases – Contingency fees are prohibited in certain types of legal matters, such as criminal defense or most family law cases.

Understanding these potential drawbacks ensures that clients enter a contingency fee agreement with realistic expectations about costs, case eligibility, and final recovery.

Costs vs. Fees: What’s the Difference?

It’s critical to distinguish between attorney’s fees and case costs/expenses:

  • Attorney’s Fees – The lawyer’s compensation, usually the percentage of recovery.
  • Case Costs – Out-of-pocket expenses like filing fees, expert witness fees, depositions, travel, and medical record retrieval.

Some attorneys cover costs upfront and deduct them from the final settlement. Others may require clients to reimburse costs regardless of the outcome. Always clarify this point in the agreement.

When Are Contingency Fees Used?

Contingency fees are common in:

They are generally not allowed in criminal defense, divorce, child custody, or immigration law.

Attorneys must follow professional conduct rules established by their state bar association. 

These rules often require:

  • Written Agreements – The contingency arrangement must be in writing and signed.
  • Reasonableness – Fees must be fair and not excessive.
  • Transparency – Lawyers must explain how fees and costs will be calculated.

In some states, legislatures or courts place caps on contingency fees, especially in medical malpractice cases.

Questions to Ask Before Signing a Contingency Agreement

Before entering a contingency fee arrangement, clients should ask:

  • What percentage will you charge if the case settles? If it goes to trial?
  • How are case expenses handled?
  • Will I owe anything if we lose?
  • Do you use a sliding scale fee structure?
  • Can you provide examples of past case outcomes?

Asking these questions helps ensure there are no surprises down the line.

Alternatives to Contingency Fees

While contingency fees are common, other fee structures include:

  • Hourly Billing – The client pays for the attorney’s time, usually in increments.
  • Flat Fee – A fixed amount for specific services.
  • Hybrid Fees – A combination of reduced hourly rates plus a smaller contingency percentage.

The right structure depends on the case type, complexity, and the client’s financial situation.

Contact Farmer, Cline & Campbell Personal Injury Lawyers for a Free Consultation 

A contingency fee can be a lifeline for individuals seeking justice without the ability to pay upfront legal costs. It creates an opportunity to level the playing field against powerful insurance companies or corporations. However, clients should always read agreements carefully, understand the financial implications, and ensure they are comfortable with the terms.

By asking the right questions and working with an experienced attorney, clients can make informed decisions and pursue their claims with confidence. Contact Farmer, Cline & Campbell Personal Injury Lawyers at (304) 346-5990 for a free, no-obligation consultation.