What is a contingency fee and how does it affect my case?

contingency fee

What is a Contingency Fee?

Let’s approach your questions by explaining what both costs and fees are so that you can put things into perspective. There are many different expenses involved in a personal liability lawsuit, and they are generally classified in two categories: fees: and costs. Fees consist of the amount of money a lawyer charges to handle a case, and the costs consist of out-of-pocket expenses that are paid by a lawyer.

Contingency Fee

A contingency fee is a payment that a lawyer receives for work provided to a client for successful completion of the services, and which is generally calculated as a percentage of the net amount gained in a settlement. Think of contingency fees as the wages a lawyer and his staff earn to do their job. Contingency fees charged can be anywhere from 25% to 40% of the net amount received in a settlement. Let’s assume an injured person signs a contract with a lawyer to provide legal services. Their contract states that a 33-1/3% contingency fee will be paid to the attorney, after expenses are subtracted, when and if the injured person wins a lawsuit. If the injured person is awarded $100,000, and the attorney’s expenses are $4,000 then the attorney gets to keep $32,000 (33-1/3% of $96,000) plus the $4,000 that he paid out in expenses. The injured person will receive a check for $64,000, and the attorney keeps $36,000.

Sliding Scale Contingency Fee

It’s important to remember that your lawyer may use a “sliding scale” contingency fee in the contract.  The sliding scale contingency fees allow for the extra time and resources used to pursue your case. For example, the contract may stipulate that your lawyer will receive:

  •         33-1/3 percent if the case doesn’t involve a court appearance.
  •         37 percent if the case settles before a trial begins.
  •         40 percent if it goes to trial and results in a jury verdict.


There are many different types of costs that an attorney can pay when trying to build your personal liability case. The larger the potential payout, the more expenses there tend to be. Common examples of costs include:

  •         Expert witnesses
  •         Court costs
  •         Medical records
  •         Police reports
  •         Investigators
  •         Depositions
  •         Filing fees
  •         Trial exhibits
  •         Postage

Before hiring a lawyer to represent you, do your due diligence and research the type of lawyer you need. If you have suffered a personal injury, make sure to hire a lawyer who specializes in personal injury lawsuits and has a good record successfully dealing with insurance company adjusters. Finding excellent lawyers in Los Angeles, CA for example can seem like a tough battle as there are so many. It is important to look through the reviews of each lawyer you are considering to see what others had to say. A good resource is Yelp! Furthermore, when you hire a lawyer to represent you, make sure that you have discussed and understand the agreement that you sign. The agreement should make it clear who will be paying for the costs associated with your personal injury case, and how the contingency fee is calculated. Let your lawyer know that after your case is over, you would like to have a breakdown of the fees and costs associated with it. Great lawyers automatically provide their clients with that information.

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