A "contingency fee" can be summarized as an amount you will be required to pay your lawyer after the lawyer wins your case. Said another way, the lawyer's fee (the amount the lawyer charges you) is contingent (dependent) on recovering something for your claim. Payment on a contingency fee basis is the most common method a lawyer uses to charge for their time for personal injury claims.
Typically, a contingency fee is a percentage of the amount a lawyer recovers for you in your personal injury claim. If the lawyer recovers nothing, typically there is no fee owing to the lawyer (there are exceptions to this). Ordinarily, the contingency fee is only paid after your personal injury attorney has recovered a settlement for your claim.
What are some examples of a contingency fee?
How much does a personal injury lawyer cost when charging a contingency fee?
A contingency fee often ranges between 20% — 45% of the amounts you recover in personal injury actions. The amount of the fee often depends on:
■ the nature of the claim,
■ the timing of settlement (contingency fee may change (increase) the longer it takes your claim to resolve); and
■ the experience of lawyer assisting you.
Most jurisdictions also restrict the amount a lawyer can charge you for a contingency fee. However, the fee may vary from attorney to attorney or depending on the nature of your claim.
How does a contingency fee payment actually work?
A contingency is typically fairly straight forward. For example, assume a lawyer charges you a 25% contingency fee and the lawyer recovers $10,000 for your claim. In this example, you owe the lawyer $2,500 for legal fees and you would recover $7,500 (less any disbursements).