How does a contingency fee work?
Short answer
With a contingency fee the lawyer takes an agreed percentage of any money recovered and charges no fee if nothing is recovered, although case costs may still be owed depending on the agreement. ABA Model Rule 1.5(c) requires a written agreement signed by the client that states the percentages and whether costs are deducted before or after the fee. Some laws cap the percentage, for example 20% of an administrative settlement and 25% after suit under the Federal Tort Claims Act, and 25% or 33% in California medical malpractice cases.
The basic deal
In a contingency arrangement the lawyer is paid a share of what you recover, by settlement or judgment, instead of an hourly fee. If there is no recovery, there is no fee. The lawyer usually advances the case costs, such as filing fees, records, depositions and experts, and is repaid from the recovery.
No national rule sets the percentage. It is set by your agreement, must be reasonable under ABA Model Rule 1.5(a), and in some kinds of cases is capped by statute or court rule[1]. Contingency fees are not allowed for criminal defense, or in divorce matters where the fee would depend on securing the divorce or on the amount of alimony, support or property awarded[1].
Costs before or after the fee: a worked example
The single clause that most changes what you take home is whether case costs are deducted before the percentage is applied or after. Rule 1.5(c) requires the agreement to say which[1].
Illustrative example. A claim settles for $90,000. The agreement sets a one-third fee. The lawyer advanced $6,000 in case costs, and a health insurer has a $10,000 lien on the recovery. (All figures are assumptions chosen for the arithmetic.)
| Step | Fee on gross (costs after fee) | Fee on net (costs before fee) |
|---|---|---|
| Settlement | $90,000 | $90,000 |
| Costs deducted first | No | $90,000 − $6,000 = $84,000 |
| Lawyer's fee (1/3) | $90,000 × 1/3 = $30,000 | $84,000 × 1/3 = $28,000 |
| Costs repaid to lawyer | $6,000 | (already deducted) |
| Lien repaid | $10,000 | $10,000 |
| You receive | $90,000 − $30,000 − $6,000 − $10,000 = $44,000 | $84,000 − $28,000 − $10,000 = $46,000 |
The net-first clause is worth $2,000 to the client here: one-third of the $6,000 in costs. The bigger the costs, the bigger the gap.
To test your own numbers, use the contingency fee calculator.
Percentages that change by stage
Many agreements raise the percentage if a lawsuit is filed, if the case goes to trial, or if there is an appeal. Florida's bar rules show what that looks like in a real schedule: fees above these levels are presumed excessive in covered cases, including 33⅓% of a recovery up to $1 million before the defendant answers, 40% after the answer, and an extra 5% if an appeal or post-judgment relief is needed[2]. Read the stage triggers carefully: "filing suit" and "answer filed" can happen months apart and can move the percentage.
What the written agreement must say
Under ABA Model Rule 1.5(c), a contingency agreement must be in writing and signed by the client, and it must state[1]:
- how the fee is determined, including the percentage that applies if the case settles, goes to trial or is appealed;
- litigation and other expenses that will be deducted from the recovery;
- whether those expenses are deducted before or after the fee is calculated;
- any expenses you must pay whether or not you win.
When the case ends, the lawyer must give you a written statement showing the outcome and, if there is a recovery, how the money was divided[1]. Some states add protections. In Florida, for example, the lawyer must give you a signed Statement of Client's Rights before you sign, and the contract must let you cancel within 3 business days[2].
Federal fee caps
| Claim type | Cap |
|---|---|
| Federal Tort Claims Act (claims against the U.S. government) | 20% of an administrative settlement; 25% of a judgment or a settlement after suit is filed[3] |
| Camp Lejeune Justice Act claims | 20% of an administrative settlement; 25% of a settlement in litigation[4] |
| Social Security disability (fee agreement process) | Lesser of 25% of past-due benefits or $9,200[5] |
Charging more than the FTCA allows is a federal offense punishable by a fine of up to $2,000, up to one year in prison, or both[3].
State caps we verified
Most state caps apply to medical malpractice or workers' compensation, not to ordinary injury claims. This list is not exhaustive; other states may have rules we have not verified.
| State | Case type | Limit |
|---|---|---|
| California | Medical malpractice | 25% if settled before suit or arbitration is filed; 33% after[6] |
| New York | Medical, dental and podiatric malpractice | 30% of first $250,000; 25% of next $250,000; 20% of next $500,000; 15% of next $250,000; 10% above $1.25 million[7] |
| Florida | Medical liability | Claimant keeps at least 70% of the first $250,000 and 90% above that, excluding costs[8] |
| Illinois | Medical malpractice | 33⅓% of all sums recovered[9] |
| Massachusetts | Medical malpractice | 40% of first $150,000; 33⅓% of next $150,000; 30% of next $200,000; 25% above $500,000[10] |
| Maine | Health care negligence | 33⅓% of first $100,000; 25% of next $100,000; 20% above $200,000[11] |
| Nevada | Professional negligence against health care providers | 35% of the amount recovered[12] |
| Utah | Medical malpractice | 33⅓% of the amount recovered[13] |
| Connecticut | Personal injury, wrongful death, property damage | Sliding scale from 33⅓% of the first $300,000 down to 10% above $1.2 million[14] |
| Michigan | Personal injury and wrongful death | One-third of the amount recovered[15] |
| Illinois | Workers' compensation | 20% of compensation recovered, with exceptions after a hearing[16] |
| Texas | Workers' compensation | 25% of income benefits[17] |
| Minnesota | Workers' compensation | 20% of the first $275,000; total fees for one injury capped at $55,000[18] |
Example: how a sliding cap works. A New York medical malpractice case recovers $600,000. Under Judiciary Law § 474-a the maximum fee is 30% × $250,000 = $75,000, plus 25% × $250,000 = $62,500, plus 20% × $100,000 = $20,000, for a total of $157,500[7]. That is 26.25% of the recovery, compared with $200,000 at a flat one-third.
See the guides for medical malpractice, workers' comp and personal injury for more detail.
Questions to ask before you sign
- What percentage applies at each stage, and what exactly triggers the next stage?
- Are costs deducted before or after the fee?
- Do I owe costs if we lose?
- Is any statute or court rule capping the fee in my type of case?
- How are medical liens and insurer reimbursement claims handled, and does the fee apply to amounts paid to lienholders?
- What happens to the fee if I change lawyers or the lawyer withdraws?
- Will another firm share the fee? Under Rule 1.5(e), a split between firms requires your written agreement to each lawyer's share[1].
Need a lawyer who works this way? See how to find a contingency fee lawyer.
Frequently asked questions
What percentage do contingency lawyers take?
There is no national standard; the percentage is whatever the written agreement says, subject to the rule that fees be reasonable and to any statutory cap. Many agreements use different percentages for settlement before suit, after suit and after trial, so compare the whole schedule, not one number.
Do I pay anything if I lose a contingency case?
You owe no fee, but you may owe case costs if the agreement says so. The ABA model rule requires the agreement to state any expenses you must pay whether or not you win, so look for that clause.
Is the contingency fee calculated before or after costs?
It depends on your agreement, which must say which method applies. Calculating the fee after costs are deducted leaves more money for the client, by roughly the fee percentage multiplied by the costs.
Can I negotiate a contingency fee?
Yes. You can ask for a lower percentage, a lower percentage if the case settles early, or costs deducted before the fee. Lawyers do not have to agree, but it costs nothing to ask before you sign.
Can a divorce or criminal defense lawyer work on contingency?
No. ABA Model Rule 1.5(d) bars contingency fees for representing a criminal defendant and in divorce matters where the fee depends on securing the divorce or on the amount of alimony, support or property awarded.
Sources
- Model Rule 1.5: Fees — American Bar Association. Reasonable-fee factors, fee communication, written contingency agreements, contingency bans and fee division (checked October 11, 2026)
- Rules Regulating The Florida Bar, Chapter 4 (Rules of Professional Conduct) — The Florida Bar. Rule 4-1.5(f): signed contingency contract, Statement of Client's Rights, 3-business-day cancellation, presumptively excessive fee schedule (checked October 11, 2026)
- 28 U.S. Code § 2678: Attorney fees; penalty — Legal Information Institute, Cornell Law School. FTCA fee caps: 20% of administrative settlements, 25% of judgments or settlements after suit (checked October 11, 2026)
- Camp Lejeune Justice Act Claims — U.S. Department of Justice, Civil Division. Attorney fee caps of 20% (administrative) and 25% (litigation) for Camp Lejeune claims (checked October 11, 2026)
- Fee Agreements — Social Security Administration. Fee-agreement cap: lesser of 25% of past-due benefits or $9,200 (decisions on or after Nov 30, 2024) (checked October 11, 2026)
- California Business and Professions Code § 6146 — Justia (mirror of the California code). Medical malpractice contingency caps: 25% pre-filing settlement, 33% after filing (checked October 11, 2026)
- New York Judiciary Law § 474-a — New York State Senate. Sliding-scale contingency cap in medical, dental and podiatric malpractice cases (checked October 11, 2026)
- Florida Constitution, Article I, Section 26 — The Florida Senate. Medical liability claimants keep at least 70% of the first $250,000 and 90% above $250,000, excluding costs (checked October 11, 2026)
- 735 ILCS 5/2-1114 — Illinois General Assembly. Illinois medical malpractice contingent fee capped at 33 1/3% of all sums recovered (checked October 11, 2026)
- Mass. Gen. Laws c. 231, § 60I — Massachusetts Legislature. Massachusetts medical malpractice contingency cap: 40% / 33 1/3% / 30% / 25% tiers (checked October 11, 2026)
- 24 M.R.S. § 2961 — Maine Legislature. Maine health care negligence contingency cap: 33 1/3% / 25% / 20% tiers (checked October 11, 2026)
- NRS Chapter 7 (NRS 7.095) — Nevada Legislature. Nevada: contingent fee in professional negligence actions against health care providers capped at 35% (checked October 11, 2026)
- Utah Code § 78B-3-411 — Utah Legislature. Utah medical malpractice contingent fee capped at 33 1/3% (checked October 11, 2026)
- Conn. Gen. Stat. § 52-251c — FindLaw (mirror of the Connecticut statutes). Connecticut sliding-scale contingency cap for personal injury, wrongful death and property damage claims (checked October 11, 2026)
- Ethics opinion RI-122 (discussing MCR 8.121) — State Bar of Michigan. Michigan: maximum contingent fee of one-third of the amount recovered in personal injury and wrongful death claims (checked October 11, 2026)
- 820 ILCS 305/16a — Illinois General Assembly. Illinois workers' compensation attorney fees limited to 20% of compensation recovered, with exceptions after hearing (checked October 11, 2026)
- 28 TAC § 152.1 (attorney fees in workers' compensation) — Texas Department of Insurance, Division of Workers' Compensation. Texas claimant attorney fee limited to 25% of income benefits (checked October 11, 2026)
- Minn. Stat. § 176.081 — Minnesota Revisor of Statutes. Minnesota workers' compensation fee: 20% of the first $275,000, total capped at $55,000 (checked October 11, 2026)