Contingency Fees Explained: How Injury Lawyers Get Paid

By Serdar Arslan, editor · Last reviewed November 3, 2026 · 8 min read · How we research

Ask an injury lawyer what they charge per hour and many will look a little puzzled. They mostly work on a contingency fee: the lawyer takes a percentage of the money recovered for you, and if nothing is recovered, there's generally no fee. That's how people without savings get a lawyer at all. The catch is in the fine print. One line about how costs are handled can shift a few thousand dollars between you and the firm.

The basic idea

In plain terms:

You usually pay nothing up front.
The lawyer's fee is a percentage of the settlement or court award.
If you recover nothing, you typically owe no fee, though you may still owe some costs, depending on the agreement.

Percentages vary by lawyer, by state, and by how far the case goes. Many agreements use a lower percentage if the case settles early and a higher one if a lawsuit is filed or the case goes to trial. Some states set limits on contingency fees for certain types of cases. Check your state's rules or ask the state bar.

What the ethics rules require

The American Bar Association's Model Rules of Professional Conduct are a template that most states have adopted in some form. Your state's version is what actually applies, and it may differ. New Hampshire's Rule 1.5, for example, is one state's adaptation of the model rule.

Fees must be reasonable (Rule 1.5(a))

A lawyer can't charge an unreasonable fee. Factors include the time and skill required, the difficulty of the issues, what lawyers in the area usually charge, the amount involved and results obtained, the lawyer's experience, and whether the fee is fixed or contingent.

Contingency agreements must be in writing (Rule 1.5(c))

Under Model Rule 1.5(c), a contingency fee agreement must:

Be in writing and signed by the client
State how the fee is calculated, including the percentage for settlement, trial, or appeal
Identify the litigation and other expenses that will be deducted from the recovery
Say whether those expenses are deducted before or after the fee is calculated
Clearly tell you about any expenses you'll owe whether or not you win

When the case ends, the lawyer must give you a written statement showing the outcome and, if there's a recovery, how much you receive and how that was figured.

Fees vs. costs: not the same thing

People mix these up all the time, and the agreement treats them separately.

The fee is the lawyer's payment for their work.
Costs (also called expenses) are the money spent to pursue the case.

Common case costs include:

Court filing fees
Fees for medical records and police reports
Expert witness fees (doctors, accident reconstruction specialists)
Deposition and court reporter costs
Investigator fees
Postage, copies, and travel

A case that settles in a few months might run up a few hundred dollars in costs. One that goes to trial with two experts can run into the tens of thousands.

Before or after? Why it matters

Rule 1.5(c) requires the agreement to say whether costs are deducted before or after the lawyer's percentage is calculated. Here's an example with a $90,000 settlement, a one-third (33.33%) fee, and $6,000 in costs:

	Fee calculated on gross (costs deducted after)	Fee calculated on net (costs deducted before)
Settlement	$90,000	$90,000
Costs deducted first?	No	Yes: $90,000 − $6,000 = $84,000
Lawyer's fee (33.33%)	$30,000	$28,000
Costs	$6,000	(already deducted)
Your share before liens	$54,000	$56,000

Same settlement, same percentage, and a $2,000 difference, just from one clause. Read that clause twice. Try our attorney fee calculator to compare scenarios with your own numbers.

Don't forget liens

Your share may be reduced further by liens: amounts owed to health insurers, hospitals, Medicare, Medicaid, or others who paid for your treatment and have a right to be repaid from the settlement. A lawyer can sometimes negotiate liens down. See medical bills and liens after an accident.

The final written statement at the end of the case should show the full breakdown: total recovery, fee, each cost, each lien, and what you receive.

What if you lose?

Most contingency agreements say you owe no fee if there's no recovery. What happens to costs varies:

Some lawyers absorb the costs if the case is lost.
Others ask you to repay costs regardless of the outcome.

The ABA model rule requires the agreement to clearly disclose any expenses you'll owe whether or not you win. Ask directly: "If we lose, will I owe you anything?"

What if you change lawyers?

You generally can fire your lawyer at any time. The State Bar of California's consumer guidelines confirm this, while noting a judge's permission may be needed in some situations. The first lawyer may be entitled to part of the eventual fee based on the work done, which is usually worked out between the lawyers. Read the agreement's section on termination.

Questions to ask before you sign

What is the percentage, and does it change at different stages?
Is the fee calculated before or after costs are deducted?
What kinds of costs do you expect in a case like mine, and roughly how much?
Will you check with me before spending large amounts (for example, on experts)?
Do I owe costs if we lose?
How are liens handled, and will you try to reduce them?
What happens if I end the relationship?
Will I get a written settlement statement?

Other fee arrangements

Contingency dominates injury work, but you'll occasionally see other setups:

Hourly fees. You pay for time spent. Less common for injury victims, more common for defense work.
Flat fees. A set price for a specific task, like reviewing a settlement offer.
Limited-scope help. A lawyer handles one piece of the matter. The State Bar of California mentions this as an option for people concerned about cost.

Some bar-run lawyer referral services, which the ABA describes as available in many communities, may offer reduced-cost initial consultations.

Reading the settlement statement

When your case resolves, the ABA model rule calls for a written statement showing the outcome and how your share was figured. Before you sign off on it, check that:

The gross recovery matches the settlement amount you agreed to
The fee percentage matches your signed agreement for that stage of the case
Each cost is listed separately, not lumped into one line
Each lien shows who is being paid and how much
The math adds up to the net amount you're receiving

If anything is unclear, ask for receipts or an itemized cost list before the money is disbursed.

Red flags

No written agreement, or pressure to sign before you've read it
Vague answers about costs or how they're deducted
Promises of a guaranteed amount
Requests for cash payments, which the California bar advises against

Before you sign the fee agreement

Know the percentage at each stage. No recovery usually means no fee.
Under ABA Model Rule 1.5(c), the agreement must be written and signed, and must explain the percentage, the expenses, and whether expenses come out before or after the fee.
Fees and costs are separate; costs grow quickly once a case heads toward trial.
The before-or-after question changes what you take home.
Liens can cut your share further, so ask how they'll be handled.
Expect a written statement at the end showing exactly how your money was calculated.