What Are Contingency Fees and How Do They Work?

Contingency Fees

Many of us have heard the term “contingent-fee lawyer”. You can find contingency fee attorneys in almost every neighborhood in California.  But what exactly is a Contingency Fee?


A contingency fee is a type of fee that lawyers can charge instead of an hourly rate. Your lawyer agrees to represent the client (you) on a “no win, no fee” basis in this arrangement. If the case is not successful, your lawyer does not get paid. However, if your case is successful, your lawyer will receive a percentage of the award or settlement as their fee.

This type of arrangement can benefit both parties as it incentivizes your lawyer to take on cases that they believe have a good chance of success. You also do not have to pay anything upfront for legal representation.

If you are considering using a lawyer on a contingency basis, it is essential to make sure that you understand all of the terms of the agreement before signing anything. Contingency fees are used most often in injury cases.


There are several types of contingency fees, but most lawyers operate on a “no win, no fee” basis. If you do not win your case, you will not owe your lawyer anything.

You should be aware of some important rules and regulations before you agree to work with a lawyer on a contingency fee basis. For example, you can be responsible for paying any upfront costs associated with your case such as court filing fees.

Contingency fee agreements are based on a percentage of the settlement in your case. Therefore, your lawyer will not get paid if you do not win any money. Regardless of settlement amount of your case, you should expect to pay your lawyer the same percentage as agreed on in the contingency fee agreement, also called a “Retainer”. Make sure that you understand how your lawyer’s fees are calculated before you agree to work together.


Contingency fees can be used in a variety of legal scenarios. Some common examples include:

  • Personal Injury Cases
  • Auto Accidents | Truck Accidents | Aviation Accidents
  • Bus Accidents | Construction Site Accidents | Pedestrian Accidents
  • Workers’ Compensation Cases
  • Environmental Cases | Toxic Torts
  • Medical Malpractice Cases
  • Product Liability Cases
  • Pharmaceutical Cases
  • Mass Tort Cases
  • Employment Cases
  • Discrimination Cases

Contingency fees, in general, are more common in cases where the potential damages are high, and your lawyer believes there is a good chance of success. These cases can sometimes be complicated and costly to litigate.  Contingent-fee lawyers typically advance all case costs during the life of the case and will be reimbursed from the settlement only if there is a resolution or judgement.  Because contingent-fee lawyers only get paid and reimbursed if the case is won, they will likely only agree to take cases they believe to be winnable.


STRAIGHT CONTINGENCY FEE:  Contingency fees can be structured in a few different ways. The most common variation is the “percentage of recovery” fee. Your lawyer will take a certain percentage of any money you recover through a settlement or verdict. For example, if you recover $1,000,000 and your lawyer’s contingency fee is 33%, your lawyer will take $333,333 as their fee.  Most retainers increase the contingency attorney fee from 33% to 40% if a lawsuit is filed.  When the lawsuit has been filed, litigation has started, and advanced case costs can start quickly increase.

HYBRID CONTINGENCY FEE:  This is less common than a straight contingency attorney fee.  A hybrid format combines the percentage of recovery fee and an hourly rate. For example, your lawyer may charge a 25% contingency fee, plus $150 per hour for their time working on the case.


Many people look at contingency fee agreements as a Win-Win situation.  You, the client, do nothave to pay any upfront money to retain your lawyer nor do you have to worry about monthly billings from your attorney.  Furthermore, it is likely the law firm that you hired is advancing all costs to prosecute your case, which are reimbursed at the end of the case.   The type of contingency fee you will pay will depend on the lawyer you hire, your situation and injuries, and the chances of success for your case.

When hiring a lawyer to represent you, be sure to ask about the fee arrangement before deciding to move forward.

By |2022-06-13T17:14:14-07:00June 13th, 2022|Personal Injury|Comments Off on What Are Contingency Fees and How Do They Work?

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