How Contingency Fees Work
Lawyers quote a contingency fee as a fixed percentage, usually between 33% and 40%. This number represents the share of your compensation that you will pay to the lawyer for legal services if they recover compensation for you. Suppose your lawyer negotiates a settlement for your case of $50,000. If the lawyer charges a contingency fee of 35%, the lawyer receives a fee of $17,500.
What a Contingency Fee Covers
Different lawyers handle contingency fees differently. But a contingency fee usually covers:
- Consulting with the lawyer in person, by phone, and via email
- Preparing your insurance claim
- Negotiating with the insurer to settle the case
- Drafting pleadings for a lawsuit
- Conducting discovery and filing pre-trial motions
Some lawyers charge a tiered contingency fee. If the case is settled before trial, the lawyer charges one rate, such as 35%. If the case goes to trial, the lawyer charges a different rate, such as 40%.
What a Contingency Does Not Cover
Again, different lawyers handle their fees differently. But most contingency fees do not include:
- Filing or arguing appeals
- Litigation costs
- Fees charged by medical providers for records
Make sure you discuss litigation costs and record fees with the lawyer before hiring them. These costs get incurred in almost every case, and most lawyers pass these costs on to you.
Specifically, the lawyer will usually pay record fees and litigation costs, like filing fees, court reporter fees, and expert witness fees, to keep the case moving. But at the end of the case, you will need to reimburse the lawyer for any amounts expended on your behalf.
