How Does a Contingency Fee Work?

March 28, 2024
Personal Injury

When a personal injury victim has been injured as a result of someone else’s fault they should get the best legal representation that they can get. Even as this is the case accident victims are usually hesitant when it comes to consulting with a personal injury attorney due to concerns that they may have about attorney fees. Most personal injury lawyers represent their clients on a contingency fee basis. The way contingency fees work means that you do not have to worry about covering your lawyer’s cost until the case has been resolved and you receive compensation.

What is a Contingency Fee?

When a lawyer agrees to be paid by their client after they have helped them get monetary compensation for their case they are working on a contingency fee. A personal injury attorney will in most cases cover the necessary costs for the case and will be reimbursed only if the individual recovers damages.

Through a contingency fee agreement, an injury victim will be able to pursue legal recourse to have a legal representative by their side even if they are unable to financially cater for a lawyer out of their pocket. In this payment arrangement, the lawyer agrees to a fixed percentage of the compensation that the client will recover

Instead of paying an hourly fee or a retainer fee over the course of the case the contingency agreement only allows the attorney to be get paid once the case has been resolved and the legal representative gets financial recovery for their client. A contingency fee will help you to get legal representation even if you do not have money to pay a lawyer and even if you do not win the case.


Benefits of a Contingency Fee

A contingency fee arrangement has more advantages than disadvantages for a accident victim who may already be facing a huge financial burden as a result of medical costs brought about by the accident. Below are some of the benefits of a contingency fee agreement:

You Don’t Have to Pay Anything Upfront

One of the major advantages of a contingency fee agreement is that you will not have to pay your lawyer upfront. This means that as your case is ongoing you will not be faced with significant legal bills. Most individuals tend to think that the agreement favors low income earners to have access to legal help and the court system.

Incentive From the Attorney

An attorney that is working on your case on a contingency fee basis is highly likely going to give your case the utmost priority. If they are not getting paid until you get paid they will be highly motivated to do everything they can so they can get you the best possible outcome.

You Will Not Lose Money 

In the case where the case does not give you the outcome that you had hoped for you will not have to worry about covering high attorney fees in a contingency fee agreement. However, it is important to note that you may still have to take care of some administrative costs. The lawyer’s willingness to not collect any payment until their client gets compensated will give most individuals peace of mind.

Related Content: What Does a Personal Injury Lawyer Do?

When Does a Contingency Fee Get Paid?

A contingency fee is helpful in cases where an individual does not have enough funds but their case is rather complicated and costly. A contingency fee is collected once the personal injury victim has been collected. However, in instances whereby the liability is not clear or whereby the case is too risky the lawyer can refuse to accept the case. They may not accept the case even on a contingency basis.

Typical Contingency Percentages

Instead of a fixed fee, individuals pay a standard contingency fee to an attorney once they receive compensation. A lot of personal injury lawyers will charge a 1/3 or 33% when the case settles if you didn’t have to file a lawsuit and up to 40% in a case where a lawsuit was filed. If a case is resolved before going to trial, an attorney will usually accept a lower fee. However, every attorney has a different structure and you should be sure to discuss with your attorney about the contingency fee.

In a situation where the case is not settled before going to trial the lawyer can charge a higher fee and depending on the lawyer it can be higher than 40%. The percentage that you agree upon is what your attorney will take upon recovery. The exact amount that a lawyer will get will depend on a variety of factors. Some of the two major determining factors are:

  • Who is paying for the litigation costs and when they are paying.
  • The risk and the complexities that are involved in your case.


If a lawyer needs to put in resources and more working hours on your case it will justify a higher fee.

Some of the extra costs that your attorney is likely to face when pursuing a personal injury case include:

  • The court and filing fees. It can cost an individual approximately $400 to file a complaint in federal court.
  • Getting expert witnesses. An expert will potentially charge just as much as your attorney. An expert witness can charge a few thousand dollars so they can review your case prepare a report and give testimony during the trial.
  • Discovery costs. You will need a court reporter for a deposition. Also, you will need to pay for a deposition transcript. A deposition can cost up to $1,000 and can last up to 8 hours.
  • Getting evidence. Obtaining copies of medical records and public documents can cost a few hundred dollars.

If you win your case you will be the one to pay the above fees. These costs can significantly impact how much you and your lawyer will receive.

Related: How Much Does a Personal Injury Lawyer Cost?

How a Contingency Fee Is Decided

Your lawyer is likely going to request a higher contingency fee based on how risky or complex a case is likely to be. If a case is riskier or more complicated compared to other cases you may be required to pay a higher percentage of the recovery. That is 35% to 40%. Also, if a case is more straightforward it can lead to a lower contingency fee percentage between 20 to 25%.

It is important that you both agree beforehand on the contingency fee. Most of the time lawyers are able to settle a personal injury case by going through negotiations with insurance companies and they rarely have to go to trial. The legal work will not be plenty if the attorney is able to settle the case before it proceeds to trial. You can try to negotiate the contingency fee with a lawyer and see if they will accept a lower percentage in the case where they will be able to settle the case easily and quickly before it proceeds to court.

You are at liberty to compare the various attorney fees. As you do so do not only look for the cheapest attorney look for the best attorney for your case. The cheapest attorney does not have to be the best works attorney and the most expensive attorney may not be the best one to handle your case. Consider factors such as their personality, their availability, location, accessibility, their track record, resources, and so on.

At Marks Law Group we would be happy to review your case, tell you about our contingency fee, and tell you how we can help you find a resolution. Book your free initial consultation and let us review your case.