Fees and agreements

How contingency fees work

What a contingency fee is, typical percentages, how costs are handled, and what to check before you sign a contingency agreement. 4 min read

In a contingency fee arrangement, the lawyer's fee depends on the outcome: the lawyer receives a share of the money you recover through a settlement or court judgment, and no fee if there is no recovery. It is the usual arrangement in personal injury cases and is also used in some employment, consumer and other claims for money.

Typical percentages

Percentages are set by agreement, within limits set by state rules and courts. A common arrangement is about one third of the recovery, sometimes rising if the case goes to trial or appeal. Some laws cap the percentage for certain claims. For example, federal law limits attorney fees in claims against the United States under the Federal Tort Claims Act to 20 percent of an administrative settlement and 25 percent of a settlement or judgment after a lawsuit is filed. Some states cap fees in medical malpractice or workers' compensation cases.

The agreement must be in writing

Professional conduct rules require a contingency fee agreement to be written and signed by the client. It should state the percentage at each stage (settlement before suit, after suit is filed, at trial, on appeal), which expenses will be deducted, and whether they are deducted before or after the percentage is calculated. It should also say whether you owe anything if you lose.

Costs: before or after the percentage?

This detail changes how much you take home. Suppose a $90,000 settlement, a one-third fee and $15,000 in case costs:

Fee calculated before costs are deducted: fee $30,000; costs $15,000; you receive $45,000.
Costs deducted first: $75,000 remains; fee $25,000; you receive $50,000.

Neither is wrong, but you should know which one you are agreeing to.

At the end of the case

When a contingency case ends, the lawyer should give you a written statement showing the total recovery, the fee, each expense, any payments made to others (such as medical liens) and the amount you receive. Read it carefully and ask about anything you don't recognize.

When contingency fees aren't allowed

Lawyers generally may not charge contingency fees in criminal cases, or in family matters where the fee depends on getting a divorce or on the amount of alimony, support or a property settlement.

Questions to ask

What percentage applies at each stage of the case?
Who advances the costs, and do I owe them if we lose?
Are costs deducted before or after your percentage?
How are medical bills or liens handled out of a settlement?
Can I end the agreement, and what would I owe if I do?

For an overview of other ways to pay a lawyer, see how lawyers charge.

Related guides

This guide is general information, not legal advice, and laws differ from state to state. For advice about your situation, talk to a lawyer licensed in your state. Last reviewed November 4, 2026.