How Contingency Fees Work in the United States
A contingency fee means your attorney is paid a percentage of your settlement or verdict — and nothing if you recover nothing. It is the dominant billing model in American personal injury law. The national norm is 33.3% if the case settles before suit and 40% if it goes into litigation or trial, with case costs (expert witnesses, depositions, filing fees) charged in addition to the percentage.
Some states cap fees in specific claim types, most notably medical malpractice. California's MICRA regime, amended by AB 35 in 2022, limits fees to 25% pre-suit and 33% after a complaint is filed. New York's Judiciary Law §474-a applies a sliding scale in malpractice cases: 30% of the first $250,000, stepping down to 10% of any amount over $1.25 million. New Jersey Court Rule 1:21-7 applies a similar sliding scale to all tort claims. If your claim is against a doctor or hospital, ask specifically about your state's cap.
Worked Example
Suppose your car accident claim settles for $150,000 before a lawsuit is filed, with a 33% fee, $7,500 in case costs, and a $12,000 health-insurance lien. The attorney fee is 33% × $150,000 = $49,500. After costs and the lien, your net recovery is $150,000 − $49,500 − $7,500 − $12,000 = $81,000 — 54% of the gross. If your attorney negotiates the lien down to $6,000, your net rises to $87,000. Lien negotiation is one of the most valuable, least visible things a good PI attorney does.
What Raises or Lowers the Percentage
- Stage of resolution: pre-suit settlements are cheapest (25–33%); trial pushes fees to 40%.
- State fee caps: medical malpractice claims in CA, NY, NJ, MI, and FL are subject to statutory limits.
- Liability strength: clear-liability, well-documented claims give you leverage to negotiate the rate down.
- Costs clause: whether the percentage applies before or after costs can change your net by thousands.
When to Hire a Contingency Attorney
Hire counsel before giving a recorded statement or accepting any insurer offer if your injuries required significant treatment, liability is disputed, or a lien-holder is involved. Insurance industry data consistently shows represented claimants recover substantially more than unrepresented ones, even after the fee. Consultations are free at nearly every PI firm, so compare fee agreements from at least two firms.
Explore more free tools on our Personal Injury Calculators hub, walk through our interactive Personal Injury Wizards to understand your claim step by step, or contact LexScale.ai to build calculators like this for your own law firm website.
How This Calculator Works
Enter your gross settlement, slide the fee percentage between 25% and 40%, and add your disbursements and any deductions such as insurer repayments or liens. The tool applies the percentage to the gross settlement, subtracts costs and deductions, and shows both the dollar fee and the share of the settlement you actually keep. Because some agreements apply the percentage after costs rather than before, always cross-check the arithmetic against the exact wording of your own retainer.
Questions to Ask Before Signing a Contingency Agreement
- Is the percentage applied before or after disbursements are deducted?
- Does the percentage increase if the case goes to trial or appeal, and at what stage?
- Who pays disbursements if the case is lost — the firm or the client?
- Is sales tax included in the quoted percentage or added on top of the fee?
- How are insurer repayments, liens, and outstanding treatment accounts handled at settlement?
- Will you receive a written settlement statement itemizing every deduction before funds are released?
A reputable firm answers every one of these questions in writing without hesitation. If a lawyer resists putting the fee mechanics on paper, treat that as a signal to keep shopping — the difference between a well-drafted and poorly drafted fee agreement on a six-figure settlement is routinely tens of thousands of dollars.