Contingency Fee Explained
Most personal injury lawyers work on contingency: no upfront fee, no hourly billing, a percentage of the recovery at the end. The mechanics are simple — but the difference between fee, costs, and liens catches people off guard.
What a contingency fee is
Under a contingency agreement, the attorney is paid only if there's a recovery. The fee is a percentage of what's recovered. Most agreements are written and signed before work begins; they spell out the percentage, what happens with costs, and what happens if the case is lost.
Typical percentages
Rates vary by state, firm, and the stage at which the case resolves. Common ranges:
- About 33% if the case settles before a lawsuit is filed
- About 40% if a lawsuit is filed and the case proceeds into litigation
- Higher percentages, or tiered arrangements, in some specialized cases or appeals
Fee is not the same as costs
The fee is the attorney's percentage. Case costs are separate — filing fees, records fees, expert witness fees, deposition transcripts, investigator costs. Most contingency agreements let the firm advance costs and get reimbursed from the recovery. Read the agreement carefully: in some arrangements the percentage is calculated before costs are deducted, in others after. The math can differ significantly.
What the net actually looks like
A typical settlement disbursement, in order, might be:
- Gross settlement amount
- Minus attorney's fee (percentage)
- Minus case costs
- Minus medical liens (health insurer, Medicare/Medicaid, providers)
- Minus outstanding medical bills being paid from the settlement
- Equals net to the client
If the case is lost
Under a typical contingency agreement, no attorney's fee is owed if there's no recovery. Whether the client owes case costs depends on the agreement — some firms absorb costs in a loss, others pass them through. This is worth clarifying before signing.
Key Takeaways
- 01Contingency fees mean no fee unless there's a recovery.
- 02Typical percentages range from about 33% pre-suit to about 40% after a lawsuit is filed.
- 03Fees and case costs are two different things — read the agreement on how they interact.
- 04The net the client receives is after fee, costs, and medical liens.
General information only. This page explains common concepts in plain language. It is not legal advice and does not create an attorney-client relationship. Laws vary by state and change over time. For any specific situation, consult a licensed attorney in your jurisdiction.