Personal injury representation is often offered under a contingency-fee agreement, meaning the legal fee depends on a recovery. The percentage is only one part of the financial arrangement.
How contingency fees work
A contingency fee is commonly stated as a percentage of a settlement or judgment. The percentage may increase if suit is filed, trial begins, or an appeal occurs.
State ethics rules can regulate reasonableness, disclosures, and written agreements. Fee structures vary by jurisdiction and case type.
Case expenses are separate
Expenses can include filing fees, records, depositions, service, travel, investigators, medical reviews, and expert witnesses. The agreement should state whether the client or firm advances them.
It should also explain whether expenses are subtracted before or after calculating the percentage. That sequence changes the net recovery.
Liens and other deductions
Health plans, medical providers, government programs, workers compensation carriers, or others may assert repayment rights. Resolving valid liens can reduce the amount delivered to the client.
Ask how lien work is handled and whether separate charges can apply. Settlement statements should clearly show gross recovery, fees, costs, liens, and net proceeds.
Questions before signing
Ask who handles the case, how decisions are made, how often updates occur, whether settlement requires client approval, and what happens if the relationship ends.
Take time to read the agreement and seek independent clarification when necessary. Keep a signed copy.
Practical checklist
- Confirm the percentage at each stage
- Understand expense advances
- Check the fee calculation order
- Discuss liens and repayment
- Review termination terms
- Keep the signed agreement
Frequently asked questions
Is a contingency fee always one third?
No. Percentages and structures vary by jurisdiction, firm, case type, stage, and agreement.
Who decides whether to settle?
The client generally controls settlement decisions after receiving advice, subject to the engagement and applicable ethics rules.
What if the case loses?
The agreement should explain fee and expense responsibility if there is no recovery.
Sources and further reading
This article provides general educational information for a U.S. audience. It is not insurance, legal, medical, tax, investment, or financial advice. Policy language, state law, and individual facts control actual outcomes.