Contingency Fees Explained: What a Lawyer's Fee Agreement Should Say

Published September 25, 2026 · Hiring a lawyer

A contingency fee means your lawyer gets paid a percentage of the money you win in a case. If you do not win, the lawyer typically does not charge you a fee for their time. This type of fee arrangement is often used in personal injury cases.

What is a Contingency Fee?

When you hire a lawyer on a contingency fee basis, you agree to pay them a portion of the money you receive if your case is successful. This money might come from a settlement or a court award. If your case does not result in a financial recovery, you generally do not pay the lawyer for their time spent working on your case. This can make legal help more accessible because you do not need to pay upfront legal fees.

It is important to understand that a contingency fee usually covers the lawyer’s time. It typically does not cover other costs, called expenses. These expenses might include court filing fees, fees for expert witnesses, or the cost of getting medical records. Your agreement should explain how these expenses are handled, whether you win or lose your case.

What a Contingency Fee Agreement Should Include

Many states have rules about what a lawyer’s fee agreement must contain, especially for contingency fees. The American Bar Association (ABA) Model Rules of Professional Conduct offer guidance for these agreements. These Model Rules are not laws themselves, but states often use them as a basis for their own specific rules.

According to ABA Model Rule 1.5©, a contingent fee agreement should be in writing. Both you and your lawyer should sign it. This agreement should clearly state how the fee is calculated. It should include the exact percentage the lawyer will receive if your case settles, goes to trial, or is appealed. The agreement must also explain how expenses are handled. It should specify which expenses will be deducted from your recovery. It also needs to say whether these expenses are taken out before or after the lawyer’s fee is calculated. The agreement should also tell you about any expenses you will owe even if you do not win your case. After your case is over, the lawyer should provide you with a written statement that explains the outcome. (Source: American Bar Association, Model Rules of Professional Conduct, Rule 1.5: Fees)

Remember, your state’s specific rules may differ from the ABA Model Rules. Each state adopts its own version of these rules. (Source: American Bar Association, Model Rules of Professional Conduct)

Where Contingency Fees Are Not Allowed

Contingency fees are not allowed in all types of cases. For example, ABA Model Rule 1.5(d) prohibits lawyers from using contingency fees in certain situations. This includes domestic relations matters, such as divorce cases. It also prohibits contingency fees for representing a defendant in a criminal case. (Source: American Bar Association, Model Rules of Professional Conduct, Rule 1.5: Fees)

The reasons for these prohibitions vary. In domestic relations cases, there can be concerns about encouraging divorce or focusing on financial gain over the best interests of families. In criminal cases, the focus is on a person’s freedom, not on a financial recovery. Again, your state’s rules will confirm where contingency fees are permitted or forbidden.

Understanding Your Rights and Responsibilities

When considering a contingency fee agreement, it is important to understand your rights and responsibilities. You have a right to a clear and written agreement. This agreement should explain how the fee is calculated and how expenses will be handled. You also have a right to understand what happens if you decide to end the lawyer-client relationship early.

Your responsibilities include being honest with your lawyer and providing them with all necessary information. You should also ask questions if you do not understand any part of the agreement. It is your responsibility to pay any expenses that are due, as outlined in your agreement, whether you win or lose.

Steps to Take When Considering a Contingency Fee Agreement

If you are thinking about hiring a lawyer on a contingency fee basis, here are some general actions you can take:

• Read the Agreement Carefully: Make sure you understand every part of the written contingency fee agreement before you sign it. Do not hesitate to ask your lawyer to explain anything that is unclear.
• Understand Percentages and Expenses: Confirm the exact percentage your lawyer will receive from a settlement, trial, or appeal. Ask whether expenses will be deducted before or after the lawyer’s fee is calculated. Understand which expenses you are responsible for, regardless of the case outcome.
• Keep Records: Keep a copy of your signed fee agreement. Also, keep records of all communications with your lawyer and any payments you make for expenses.
• Know Your State’s Rules: Be aware that the rules for contingency fees can vary from state to state. Your state’s bar association or legal ethics rules will provide the specific requirements for your area.

When to get legal help

Understanding a contingency fee agreement can be complex. You should talk to a licensed attorney in your state if you have questions about a specific fee agreement. A legal aid office in your area may also be able to help you understand these agreements. You can also contact your state’s bar association for information about attorney ethics rules in your state. A licensed attorney can explain how your state’s laws apply to your unique situation.