What Does Contingency Fee Mean?

By July 1, 2024July 8th, 2024Personal Injury

When you’ve suffered an injury in an accident, you’ll likely consider hiring a personal injury lawyer to help you get the compensation you deserve. But you may think legal fees can cost a lot of money, and you may worry about how you’ll afford an attorney – especially when you’re already facing medical bills and lost income from missing work.

The good news is that most personal injury lawyers work on a contingency fee basis. But what exactly does contingency fee mean? Let’s take a closer look.

No Upfront Costs

One of the biggest advantages of contingency fees is that there are no upfront costs for the client. When a lawyer works on contingency, they don’t charge you any fees to start working on your case. There’s no retainer fee and no big legal bill that you have to pay right away.

Instead, your lawyer will invest time and resources into building your case. This includes investigating your accident, gathering evidence, consulting expert witnesses, and more. Your lawyer covers all of these costs themselves.

Only Pay if You Win

The other key aspect of a contingency fee is that you only have to pay if your lawyer wins your case. If they help you reach a settlement or win a jury award, they take a percentage of that money as their fee.

But if, for some reason, your case does not recover compensation, then you don’t owe your lawyer anything. They’ve taken on the risk of investing in your case.

This makes hiring a personal injury lawyer very low-risk for accident victims. You have access to legal representation with no money out of your pocket. And you’ll never have to pay legal fees if you don’t get compensation.

Incentive to Get Results

Contingency fees also give your personal injury lawyer a big incentive to get the best possible results in your case. The more money they recover for you, the more they get paid. But if they don’t win, they don’t get paid at all.

This means your personal injury attorney is highly motivated to build the strongest case possible on your behalf. It’s in your and their best interests for them to fight hard and pursue maximum compensation. You don’t have to worry that they’re just racking up legal fees without making progress on your case.

Levels the Playing Field

For the average person, facing a big insurance company can feel like a David vs. Goliath situation. These companies have vast resources and teams of high-powered attorneys on their side, so it’s easy to feel outmatched.

But a personal injury lawyer working on contingency levels the playing field. You get a skilled professional in your corner who knows how to take on the insurance companies and isn’t afraid to fight for your rights. Your attorney has the experience, legal knowledge, and resources to make the insurance company take your claim seriously.

No Cost to Discuss Your Case

Another great thing about personal injury lawyers who work on contingency is that they typically offer free consultations. This means you can discuss the details of your accident and injuries with an attorney without having to pay anything.

During this consultation, the lawyer will ask about what happened and give you their honest opinion on whether you have a case. If they think you do, they’ll explain how the contingency fee process works. This way, you’ll know exactly what to expect before you agree to hire them.

Contingency Fees Allow You to Focus on Your Recovery

Dealing with a legal case on top of trying to recover from your injuries can be incredibly stressful. But with a lawyer handling things on contingency, you can focus your energy where it’s needed most – on your health and recovery.

Your lawyer will handle all the legal heavy lifting, from paperwork to negotiations to possible court appearances. They will still inform you and give you the final say on major decisions, but you won’t have to deal with the day-to-day stress and complications.

In the meantime, you can direct your attention to doctor’s appointments, physical therapy, and getting your life back to normal. Let your lawyer worry about the legal side of things.

A Percentage of the Settlement or Award

So, how much does a personal injury lawyer get paid under a contingency fee arrangement? As mentioned, it’s a percentage of the money they recover for you.

The exact percentage can vary somewhat, but there are certain industry standards. The important thing to remember is that the percentage is always agreed upon upfront before the lawyer starts working on your case. That way, you’ll know from the beginning what to expect.

Your lawyer should be fully transparent about their contingency fee and happy to answer any questions you have. If the fee arrangement seems unclear or confusing, don’t hesitate to ask for more details.

Covering Case Expenses

It’s important to understand that contingency fees don’t necessarily cover every expense related to your case. Certain costs, like court filing fees, may be separate from the lawyer’s contingency percentage.

However, your lawyer may also cover these costs upfront and then deduct them from your share of the settlement or award. Again, this should all be clearly laid out ahead of time so there are no surprises. Ensure you understand all the possible costs before signing a contingency fee agreement.

Maximizing Your Compensation

One concern some injury victims have about contingency fees is that they’ll have a lower overall settlement or award. They may think the lawyer will just take a big chunk of the money they recovered.

But in reality, having a skilled personal injury attorney on your side can often lead to significantly more compensation, even after the contingency fee is deducted. Remember, the contingency fee motivates your lawyer to get you as much money as possible. They have the knowledge and strategies to build a strong case and negotiate effectively with the insurance company.

Never accept a lowball settlement offer without a personal injury lawyer when you don’t know what your case is worth. Or the insurance company may try to deny your claim altogether. An experienced personal injury attorney won’t let them get away with that.

So, while you will have to pay a percentage of your compensation to your lawyer, you’re still likely to recover more money than if you tried to handle things on your own.

The Personal Injury Settlement Process

If you’re pursuing a personal injury lawsuit, your lawyer will understand how the settlement process typically works. While every case is unique, there are some general steps you can expect:

Hiring a Lawyer

As we’ve discussed, most personal injury lawyers work on a contingency fee basis. So, your first step will be to find an attorney you trust and sign a contingency fee agreement with them. This gives them the green light to start working on your case.

Investigating and Building Your Case

Your lawyer will then begin gathering evidence to support your claim. They will build the strongest possible case to prove that the other party was at fault and that you deserve compensation for your injuries.

Making a Demand

Once your lawyer has compiled a solid case, they’ll typically send a demand letter to the insurance company. This letter details your accident and injuries and demands a certain amount of money to settle your claim.


After receiving the demand letter, the insurance company usually makes a counteroffer. This starts a back-and-forth negotiation process as both sides work to reach an agreement. Your lawyer will advise you whether to accept a settlement offer or keep pushing for more.

Reaching a Settlement

If negotiations succeed, you’ll settle with the insurance company. This means they agree to pay you a certain amount of money, and in exchange, you agree not to pursue any further legal action related to the accident.

Receiving Your Settlement

Once a settlement is reached, the insurance company will send a check to your lawyer. Your lawyer will deduct their contingency fee percentage and other agreed-upon costs from the settlement amount. You’ll receive the remaining balance.

It’s important to remember that this process can take time. Settlement negotiations may go back and forth for weeks or even months. And if you can’t reach a fair agreement, your lawyer may advise you to file a lawsuit and take your case to trial.

However, most personal injury cases do settle out of court. And with a lawyer working on contingency, you can pursue a settlement without paying any upfront costs. Your attorney will guide you through each step of the process and fight to get you the best possible outcome.

If you have any questions about the settlement process or what to expect in your specific case, don’t hesitate to ask your personal injury lawyer. They should walk you through the details and inform you every step of the way.

FAQs About Contingency Fees

Q: Are contingency fees only used in personal injury cases?

A: While contingency fees are most common in personal injury cases, lawyers may also use them in other types of cases. This could include things like wrongful death lawsuits. However, for many other legal matters, like criminal cases or divorce proceedings, lawyers typically charge hourly rates or flat fees instead.

Q: How do I know if a contingency fee suits my case?

A: The best way to determine if a contingency fee makes sense for your case is to schedule a free consultation with a personal injury lawyer. They’ll review your situation and advise you on your options.

In general, contingency fees are a good fit when seeking monetary compensation from an insurance company or other organization that has caused you harm.

Q: Can I negotiate the contingency fee percentage with my lawyer?

A: Contingency fee percentages are often fairly standard in personal injury. However, you may negotiate, especially if you have a particularly strong case.

It never hurts to ask your lawyer if they will adjust their fee. Just remember that a lawyer who charges a very low percentage may not have the resources or motivation to fully invest in your case.

Q: What if I fire my lawyer in the middle of my case?

A: If you decide to change lawyers amid your personal injury case, your original lawyer may be entitled to a portion of the contingency fee based on the work they’ve already done. Your fee agreement should spell this out.

Alternatively, your original lawyer may put a lien on your settlement, which means they’ll receive a certain amount from your settlement proceeds before you receive your share.

Before deciding to switch lawyers, discuss your concerns with your current attorney and see if you can resolve them.

Hopefully, these FAQs have helped clear up any additional questions you might have about contingency fees.

Remember, if you suffered an injury due to someone else’s negligence, you need a personal injury lawyer – and with a contingency fee arrangement, you can get that help without any upfront costs. Get your free consultation today to learn more.

An accident is stressful enough without having to worry about how you’ll afford a lawyer. However, contingency fees make professional legal representation accessible to almost anyone.

No matter your financial situation, you can get the legal help you need to pursue the compensation you deserve. You won’t have to pay anything upfront or risk owing legal fees you can’t afford.

If you’ve suffered an injury due to someone else’s negligence, don’t let concerns about cost stop you from exploring your legal options. Get your free consultation with an experienced personal injury attorney and find out if a contingency fee arrangement is right for your case.

With a skilled lawyer fighting for you on contingency, you can focus on what matters – healing and putting your life back together after an accident. Your attorney will take care of the rest and work hard to seek every dollar you’re entitled to.

So, if you’re looking for a personal injury lawyer you can trust, ask if they work on contingency. It could make all the difference in getting the legal help you need during a difficult time. Call a personal injury attorney today for your free consultation.