Contingency Fee

A fee arrangement in which the lawyer is paid a percentage of what is recovered, and is paid no fee if nothing is recovered.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

Under a contingency fee the client pays no hourly rate. The lawyer takes an agreed percentage of whatever is recovered, and takes no fee at all if the case recovers nothing. It is how most personal injury work is billed, and it exists so that a claim does not depend on the claimant's ability to fund it.

The distinction that causes the most surprise is between fees and costs. The percentage is the lawyer's fee. Case costs - filing fees, records, expert witnesses, depositions - are usually a separate category, are often advanced by the firm, and are usually reimbursed out of the recovery. Whether the percentage is calculated before or after those costs come out changes the client's net share, and both methods are used.

Contingency fees are not permitted in every kind of case. In particular, they are generally prohibited in criminal defence and in securing a divorce.

Where this comes from

Under ABA Model Rule 1.5(c) a contingent fee agreement must be in writing, signed by the client, and must state how the fee is calculated and how expenses are handled. The Model Rules are a template: each state adopts and amends its own version, so the binding rule is the one in the state where the lawyer practises.

When people hire a lawyer for this

Read the percentage, whether it changes if the case is filed or tried, and whether it is taken before or after costs - those three terms determine what actually reaches the client. A lawyer is required to put the agreement in writing, so any of this being vague is itself worth questioning.

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.