Contingency fee math looks simple until case costs and fee tiers enter the picture. Calculate the attorney fee, deduct case costs, and see the net amount that actually goes to the client.
Case costs
A clear, properly worded contingency fee agreement protects both firm and client. Talk to a legal practice consultant about drafting or reviewing your fee agreements.
The 2 most common approaches are calculating the fee on the gross settlement before costs are deducted, or calculating it on the net amount after costs come out first. These can produce meaningfully different numbers, and which method applies should be spelled out clearly in the fee agreement signed at the start of representation, not decided after the fact.
Some firms use a flat percentage regardless of how the case resolves, while others use a tiered structure where the percentage increases if the case requires filing a lawsuit or going to trial, reflecting the additional work and risk involved. If you're drafting a new fee agreement, our engagement letter builder and the underlying case details from a tool like our car accident settlement calculator can help set realistic expectations before a case even begins.
Yes, in some contexts. Several states cap contingency fees for medical malpractice cases specifically, often on a sliding scale that decreases as the recovery amount increases. Some states also require court approval of contingency fees in cases involving minors, since the minor's interests need independent protection in approving the fee arrangement.
In cases involving expert witnesses, extensive discovery, or multiple depositions, case costs can run into tens of thousands of dollars, and where those costs come out of the calculation - before or after the fee percentage is applied - genuinely changes both what the attorney receives and what the client keeps. This is exactly why clarity in the original fee agreement protects both sides from disputes later.
Under a true contingency arrangement, the attorney generally receives no fee if there's no recovery - that's the core risk-sharing feature of contingency billing. Case costs, however, are sometimes still owed by the client depending on the specific fee agreement, so understanding whether costs are also contingent or are owed regardless of outcome is an important detail to clarify upfront.