What is Contingency Fee?
A fee arrangement where the attorney's payment is contingent upon winning the case. The attorney receives a percentage of the recovery, typically 33-40%, and no fee if the case is lost.
Understanding Contingency Fee
Contingency fees allow plaintiffs to pursue legal claims without upfront costs. The percentage may vary based on whether the case settles before trial, during trial, or on appeal. Clients are typically still responsible for case costs and expenses.
Examples
- 1Personal injury attorney taking 33% of a settlement
- 2Higher percentage for cases that go to trial
- 3No fee charged if the case is unsuccessful
Why This Matters in Legal Cases
Contingency fees align attorney and client interests—both want the maximum recovery. This arrangement makes legal representation accessible to people who couldn't afford hourly rates. However, clients must understand the difference between attorney fees (percentage of recovery) and case costs (expenses like filing fees, expert witnesses, medical records), which are usually handled separately.
Explaining to Clients
Be transparent about fees from the start. Explain that "no recovery, no fee" applies to attorney fees, but clients may still owe costs in some arrangements. Clarify whether costs are advanced by the firm and repaid from settlement, or if the client is responsible regardless of outcome. Put everything in writing.
Frequently Asked Questions
What's the difference between fees and costs?
Why do fees increase if the case goes to trial?
Are contingency fees regulated?
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