Contingency Fee Lawyers

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What Is a Lawyer or Attorney Contingency Fee?

A contingency fee, or contingent fee, is a payment scheme in which an attorney’s compensation is dependent on the outcome of a case. The client pays nothing up-front, and, if the case is successful, the attorney is entitled to a percentage of the award or settlement. If the case is unsuccessful, the lawyer simply does not receive a fee, but the client may still have to pay litigation costs.

How Much Is the Contingency Fee?

The contingency fee is a percentage of the client’s net recovery from the lawsuit. Thus, the amount is dependent, or contingent, on the outcome of the case. The percentage is negotiable, but must be reasonable, and will be stated in the attorney-client retainer agreement. The agreement should also state whether the fee is calculated before or after expenses.

The typical contingency fee agreement is about one-third of the net recovery. Some attorneys offer a sliding-percentage scale, where the percentage depends on how far the case goes. Even though you won’t pay expenses until the case is settled, it is a good idea to keep track of the costs. You should ask your attorney to send you a bill on a regular basis.  

Can the Percentage or Amount Be Limited or Lowered by a Judge?

Attorneys and clients are generally given a good deal of leeway in negotiating contingency fee agreements. Courts have found contingency fees as high as 45% reasonable. However, if a contingency fee agreement is unreasonable or unfair, it may be invalidated or amended by the court and the attorney could face sanctions or even disbarment.

Factors considered when determining reasonableness include:

When Are Contingency Fee Agreements Used?

Contingency fee agreements provide clients with access to legal services they otherwise might not be able to afford. From the client’s perspective, a contingency fee arrangement is preferable in cases involving greater risk, and should be avoided, if possible, in more clear-cut cases.

Contingency fee agreements are typically used in:

When Is a Contingency Fee Not Allowed?

Contingency fee agreements are prohibited in certain cases. There are some variations between states, but usually contingency fee agreements are prohibited in:

Seeking Legal Assistance

Contingency fee agreements can be a valuable tool if you believe you have a strong legal claim, but are not financially able to hire an attorney out-of-pocket. If you think that you might have a case and would like to know more about contingency fee agreements, an attorney can answer your questions.

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Last Modified: 07-28-2014 04:25 PM PDT

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