Hiring a lawyer · Fees
Short answer: on a contingency fee, the lawyer is paid a percentage of what you recover, usually one third, and nothing if you recover nothing. The percentage is only half the story. Case costs and medical liens also come out of the settlement, and whether costs are taken out before or after the percentage changes what you take home.
Most people hurt in a car crash cannot pay a lawyer by the hour. The contingency fee exists for that reason. It is the standard way injury cases are paid for, but it has rules. The agreement must be in writing, and some states cap the percentage.
This page explains how the money is split, with real numbers and the actual rule text. There is a calculator below so you can try your own figures.
How a contingency fee works
A contingent fee is a fee that depends on the result. If the case settles or you win at trial, the lawyer takes the agreed share. If you get nothing, the lawyer gets no fee.
The national template is Rule 1.5 of the ABA Model Rules of Professional Conduct. The model rule binds no one by itself: each state adopts its own version, and most follow it closely. California regulates these contracts by statute instead. In the model rule, paragraph (c) allows the fee, requires a writing signed by you, and requires a written statement at the end showing how the money was divided.
Paragraph (d) bans contingency fees in two areas: criminal defense, and family cases where the fee depends on getting a divorce or on the amount of alimony, support or the property settlement. Injury claims are not on that list.
Filing fees, medical records, expert witnesses and depositions cost money before any settlement exists. Under ABA Model Rule 1.8(e), the lawyer may advance them and make repayment depend on the outcome. Many firms do. Some agreements still make you liable for costs if you lose. Rule 1.5(c) says the agreement must tell you clearly if that is the case.
What percentage is normal
One third (33⅓%) is the figure you will see most. Many agreements use a sliding scale: a lower share if the claim settles early and a higher one, often 40%, once a lawsuit is filed or the case goes to trial. An appeal can add more.
No national law sets the number. Outside the capped cases below, the percentage is negotiable. Florida says so outright in the statement of client’s rights its lawyers must hand you before you sign: there is “no legal requirement that a lawyer charge a client a set fee or a percentage of money recovered.”
Florida is also the clearest public example of a sliding scale, because its bar rule sets the point at which a fee is presumed excessive:
| Stage of the case (Florida) | On the first $1 million | On the part from $1M to $2M | On the part over $2M |
|---|---|---|---|
| Before the defendant files an answer | 33⅓% | 30% | 20% |
| After the answer, through judgment | 40% | 30% | 20% |
| All defendants admit liability; trial on damages only | 33⅓% | 20% | 15% |
| Appeal or post-judgment collection | An additional 5% of any recovery | ||
Source: Rules Regulating The Florida Bar, Rule 4-1.5(f)(4)(B)(i). Each rate applies only to the slice of the recovery in its band: on $1.5 million before an answer, the cap is 33⅓% of $1 million plus 30% of $500,000. A fee above the schedule is not banned, but it is presumed clearly excessive unless a court approves it in advance. The rule also gives you 3 business days to cancel the contract in writing; you then owe no fee, although you may have to repay costs the lawyer has already advanced.
Costs: before or after the fee
This is the part that moves real money, and it is the part most fee pages skip. ABA Rule 1.5(c) requires the agreement to say “whether such expenses are to be deducted before or after the contingent fee is calculated.”
Take a $90,000 settlement, a one-third fee, $6,000 in case costs and a $15,000 medical lien:
| Fee on the gross | Fee on the net | |
|---|---|---|
| Settlement | $90,000 | $90,000 |
| Costs taken out first | no | $6,000 → $84,000 |
| Lawyer’s fee (33⅓%) | $30,000 | $28,000 |
| Case costs repaid | $6,000 | already out |
| Medical lien | $15,000 | $15,000 |
| You receive | $39,000 | $41,000 |
Same case, same lawyer, $2,000 apart. The gap grows with the costs. An expert-heavy case with $40,000 in costs moves it to about $13,000.
The lien is the other surprise. Health insurers, Medicare, Medicaid and hospitals can have a legal right to be repaid from the settlement. In most agreements the fee is calculated on the gross settlement, before the lien is paid, as in the example above; check yours. A good lawyer will try to negotiate it down. Ask whether they do, and whether they charge for it.
Settlement calculator
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States and cases with fee caps
A cap means the law, not the market, sets the maximum. A few states cap fees in all injury cases; others only in certain claims. Examples:
- Claims against the federal government. If a federal employee hurt you, for example a postal truck driver on duty, the claim runs under the Federal Tort Claims Act. 28 U.S.C. § 2678 caps the fee at 20% of an administrative settlement and 25% of a judgment or a settlement after a lawsuit is filed. Charging more is a federal crime under the same section.
- Florida. The sliding scale in the table above.
- Michigan. Court rule MCR 8.121 caps the fee in personal injury and wrongful death cases at one third of the amount recovered.
- Medical malpractice. Several states cap fees only in malpractice cases. California is one: Business and Professions Code § 6146. A car crash is not malpractice, so these caps rarely apply to accident claims.
Fee rules are set by each state's supreme court or legislature and they change. Your state bar's website publishes its version of Rule 1.5. If a fee looks out of line, the state bar can tell you whether a cap applies.
What the written agreement must say
Under ABA Rule 1.5(c), as most states have adopted it, the contract you sign must state:
- The percentage or percentages the lawyer gets on settlement, trial and appeal.
- Which litigation and other expenses come out of the recovery.
- Whether those expenses are deducted before or after the fee is calculated.
- Any expenses you must pay even if you lose.
When the case ends, the lawyer must give you a written closing statement showing the outcome, the amount sent to you and how it was worked out.
Some states add more. California's Business and Professions Code § 6147 requires the contract to state that the fee is not set by law and can be negotiated. If the contract fails that section, you can void it, and the lawyer is then limited to a reasonable fee.
Questions to ask before you sign
- What is the percentage, and does it change if a lawsuit is filed or the case goes to trial?
- Are costs deducted before or after your fee?
- Do I owe anything if we lose? Costs included?
- Who negotiates my medical liens, and is there a separate charge for it?
- Will another firm work on my case, and how is the fee split? Under Rule 1.5(e), a split between lawyers in different firms needs your agreement, confirmed in writing.
- Can I see an estimate of costs for a case like mine?
A lawyer who answers these in writing, before you sign, is showing you how the case will be run. Fee disputes usually start with one of these questions that nobody asked.
Related guides
- Personal injury statute of limitations by state: how long you have to file.
- Comparative negligence by state: how your own share of fault cuts the award.
- What to do after a car accident: the first hours and days.
- American Bar Association, Model Rule 1.5, Fees, and Model Rule 1.8(e).
- The Florida Bar, Rules Regulating The Florida Bar, Rule 4-1.5(f)(4) and the Statement of Client's Rights.
- 28 U.S.C. § 2678, Attorney fees; penalty (Federal Tort Claims Act).
- California Bus. & Prof. Code § 6146 and § 6147.