Contingency fee
An attorney fee set as a percentage of a recovery, paid only if there is a recovery, and stated in writing in the engagement letter before any work begins.
A contingency fee is an attorney fee calculated as a percentage of a recovery. No recovery, no fee. The percentage, how expenses are handled, and what happens at different stages of a case are set in a written engagement letter the attorney and client both sign. Reading the paper before signing is the one general sentence this subject supports.
Collision Bureau is not a law firm and this is not legal or medical advice. It is general information about what happens after a crash. For advice on your situation, talk to an attorney licensed in your state or a treating clinician.
What a contingency fee is
A contingency fee is one of the ways an attorney gets paid. Instead of billing by the hour, the attorney takes a percentage of a recovery, and the percentage is the fee. The arrangement is used in many personal injury cases, and the written engagement letter is where it lives. The letter names the percentage, the stages of the case where the percentage can change, and the way expenses are handled.
The arrangement exists for a reason that is easy to say in plain terms. People injured in crashes often cannot pay by the hour while a case runs. A fee that comes out of the recovery, if there is one, lets a case begin without the household writing a check up front. The reason the engagement letter is a real document, and not a formality, is that every detail of the arrangement lives inside it.
How the fee is calculated
Two numbers run the arithmetic. The gross recovery is the full amount paid to resolve the case. The percentage is the share of that amount the attorney receives as the fee. Expenses, which are the out-of-pocket costs of running the case, are handled separately under terms the engagement letter spells out. Different firms treat expenses in different ways, and reading the paragraph that describes them is part of reading the agreement.
The percentage can also change by stage. Many engagement letters set one rate for a case that resolves before suit, another after suit is filed, and sometimes another at trial. The engagement letter states the rates, and the lawyer explains them before anything is signed. If you need to ask once for everything the crash broke, the request is routing, not an attorney evaluation.
Why the arrangement matters after a crash
A crash is an expensive week, and the usual way of paying for a lawyer by the hour is often not practical. Contingency fees make it realistic to have representation during a claim without writing a check during a stretch when there is no money for one. The arrangement is the ordinary one in this subject, and the mechanics of a first consultation at a firm using one are described in a related guide in this library.
What a contingency fee is not
A contingency fee is not free representation. It is representation whose fee is paid from a recovery rather than out of pocket. It is also not a universal percentage; the number varies by firm, by case, by stage, and by state rules that cap the percentage in some situations. The engagement letter is the answer to every specific question about any specific case, and reading it with a licensed attorney before signing is the step the mechanics assume.
Questions people actually ask
01What percentage is the fee?
The percentage is set in the engagement letter the attorney and client both sign. The number varies by firm and by the stage the case reaches, and some states cap the percentage by rule. The written agreement is the document that answers the question for any given case. This page does not state a market percentage, because the number that matters is the one on the paper the client signs.
02Are case expenses the same as the fee?
No. Case expenses are the out-of-pocket costs of running a case, such as filing fees, records requests, and expert reports. The engagement letter describes how expenses are handled, which commonly includes who advances them and whether they come out of a recovery separately from the fee. Reading the engagement letter is the way to see how a specific firm treats expenses in a specific case.
03What happens if there is no recovery?
A contingency fee is paid only if there is a recovery. If there is none, no attorney fee is owed. How case expenses are handled when there is no recovery depends on the engagement letter and on state rules, and both are the correct source for that answer. A licensed attorney walks a client through those terms before anything is signed.