What is a contingency fee?
A contingency fee is a way of paying a lawyer with a percentage of the money recovered, paid only if there is a recovery. If the case brings in nothing, there is no fee. The American Bar Association says a contingent fee is payable only if your case is successful. Most injury lawyers work this way.
Last checked November 9, 2026 · Official sources (5)
How does a contingency fee work? An example
Example: your case settles for $60,000 with a one-third fee and $3,000 in case costs. The order of subtraction changes your share.
| Method | Fee | Costs | You receive before medical repayments |
|---|---|---|---|
| Fee taken first, from $60,000 | $20,000 | $3,000 | $37,000 |
| Costs taken first, fee on $57,000 | $19,000 | $3,000 | $38,000 |
A $1,000 difference from one sentence in the contract. These amounts are only an example; your agreement controls.
Why does the contingency fee agreement matter to you?
It lets people hire a lawyer without paying up front, and the lawyer earns more only if you do. But the details decide your take-home: the percentage, whether it rises if a lawsuit is filed or the case goes to trial, how costs are handled, and what happens if you change lawyers.
Costs are separate from the fee. The ABA warns that, win or lose, you probably will have to pay court filing charges and deposition costs, unless your agreement says otherwise.
What do Texas and Arizona require in a contingency fee agreement?
| State | Requirement |
|---|---|
| Texas | A contingent fee contract must be in writing and signed by the attorney and client. |
| Arizona | The agreement must be in a writing signed by the client and state how the fee is determined, including the percentages. |
Contingency fee vs. hourly fee vs. retainer
An hourly fee is billed for time spent, win or lose. A retainer is usually money paid in advance toward future work. A contingency fee is a share of what is recovered. In injury cases you may still sign a "retainer agreement" that sets up a contingency fee, with no money paid up front.
Before you sign, ask four questions: what percentage applies at each stage, who pays costs if the case is lost, whether costs come out before or after the fee, and what you would owe if you switched lawyers midway. Get the answers in the written agreement, not just in conversation.
Questions
What is a normal contingency fee for a car accident?
The ABA says contingent fees are often one-third to forty percent of the recovery. Many agreements set a higher percentage if the case goes to trial.
Do I pay anything if I lose?
No fee, but you may still owe case costs depending on the agreement.
Find out if you are owed money.
A free case review. $0 upfront. No fee unless you win.
See if I’m owed moneySources (5)
- American Bar Association, checked 2026-11-09. “A contingent fee is a fee that is payable only if your case is successful.”
- American Bar Association, checked 2026-11-09. “win or lose, you probably will have to pay court filing charges, the costs related to deposing witnesses, and similar expenses”
- American Bar Association, checked 2026-11-09. “In a contingent fee arrangement, the lawyer agrees to accept a fixed percentage (often one-third to forty percent) of the amount recovered.”
- Tex. Gov't Code § 82.065(a), checked 2026-11-09. “A contingent fee contract for legal services must be in writing and signed by the attorney and client.”
- Arizona Rules of Professional Conduct, ER 1.5(c) (State Bar of Arizona), checked 2026-11-09. “A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined”