The Basics of Contingent Fees
In personal injury cases, most attorneys work on a “contingent fee” basis. In this scenario, you agree to
pay your attorney a percentage of your award if you are victorious instead of an hourly rate. There are no
up-front fees required to hire an attorney.
If your attorney wins your case, the contingent fee is typically in the range of 33–40 percent of the amount
recovered. If you lose your case, your attorney does not get paid—no award, no contingent fee. The
contingent fee frequently does not include charges for court lings, deposing witnesses, making copies of
medical records, and so forth. Those costs will come out of the recovery amount if you are successful. If
you lose the case, you may be responsible for those charges.
There are differences in contingent-fee arrangements from attorney to attorney. One big one is whether
your attorney deducts the costs and expenses from your recovery amount before or after he/she is paid
the contingent-fee percentage. This point is often negotiable.
Some contingent-fee agreements will operate under a graduated percentage contract. Legal work that’s
more involved (e.g., ling a lawsuit and prepping for trial) will garner a higher contingent-fee percentage.
The contingent-fee percentage may be lower if a case is settled prior to ling a lawsuit.
Contingent-fee arrangements eliminate up-front charges for the client; there are no mounting legal bills
as a case winds through the legal system; lower-income people are afforded greater access to the legal
system to pursue compensation for injury; and attorneys are highly motivated to win their cases…they
don’t get paid otherwise.