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Contingency Fee: Should You Say Yes To It?

HomeAffordableContingency Fee: Should You Say Yes To It?

Attorneys charge their fees either as hourly or contingency fees. These are two different fee formats under which attorneys usually charge plaintiffs for the services rendered.

A contingency fee charges a percentage of a plaintiff’s compensation at the end of a jury trial or when a matter settles via alternation dispute resolution methods such as mediation or arbitration.

Hourly fee bills according to the time an attorney devotes to the case.

A specific basic rule governs the determination of contingency fees and payment of the costs and other charges to attorneys.

Read on to know these basics.

When Is Contingency Fee Charged?

A contingency fee is a charge when there is some monetary benefit at the end of the case.

Criminal cases barres from charging contingency fees as there is no monetary benefit in the end.

criminal cases


As a rule of thumb, personal injury claims, class action lawsuits, and auto accident claims are contingency fee charge cases.

What Percent Is Charge As Fee?

Attorneys usually charge between 25-30% of the compensation received by the plaintiff.

However, there is a catch; while contracting the attorney under a contingency fee, it is prudent to ask for the services covered under the cost and whether the payment will charge on the gross or net compensation received.

What is includes in the Fees?

The contingency fee usually includes

  • attorney’s fee,
  • the case filing fee,
  • investigation fee,
  • expert witness fee and
  • any other incident charges related to the case.

These charges are borne by the attorney and paid after the settlement of the suit.

When Is The Contingency Fee Paid?

At the end of the trial or mediation, once the settlement amount award, the attorney will deduct his fee, other fees mentioned in the previous point. Then the money is disbursed to the plaintiff.

If the contingency agreement stipulates expenses being pay first, it will deduct the first expenses, and then the attorney’s fee is calculated.

How Is Fee Calculated?

The plaintiff receives damages to the total amount of $100,000, the total expense incurred by the attorney is $10,000, and the attorney’s contingency fees are 30%.

Now there are two scenarios here:

Scenario 1

Expenses and fees are taken together as a part of an attorney’s fee then

$100,000*30% = $30,000

$30,000 – $10,000 (expenses incurred) = $20,000 attorney’s fee

$70,000 compensation received by the plaintiffs.

In this case, the attorney will earn $20,000 as fees, and the plaintiff receives $70,000 as their final compensation after paying all fees.

Scenario 2

Expenses and fees are separate and expenses to be deducted first and then attorney’s fees is to be calculated.

$100,000 – $10,000 (expense incurred) = $90,000(fee to be deducted from this amount)

$90,000*30% = $27,000 (attorney’s fee)

$90,000-$27,000 = $63,000

In this case, the attorney fee increase to $27,000 as expenses are separate from the fees, and the plaintiff receives $63,000 as damages.

As there are various ways to form payment terms, it is advisable to discuss them first with your attorney about paying.


There are contingency agreements that stipulate in case of losing an argument. The plaintiff is supposed to make good of the expenses incurred during trial.

In such a scenario, it is prudent to ask your attorney for an itemized bill every month so that you can keep your expenses in check.


Contingency fee allows for a legal remedy for those who cannot afford a lawyer's fee and go through costly trials.


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