Contingency Fees Explained

A contingency fee agreement states the percentage the firm will receive from any settlement, verdict or trust payment. The percentage can differ between firms, and some agreements use different percentages depending on how far a case goes, such as whether it settles early or goes to trial. The agreement should say whether the percentage is taken before or after case costs are subtracted, which can change the amount you receive. Read these terms closely. If anything is unclear, ask for an example showing how a hypothetical payment would be divided.

Pursuing a claim involves costs such as records requests, expert reviews, court filing fees, travel and deposition transcripts. Many firms advance these costs and are repaid from any recovery. The agreement should explain how costs are handled, whether you owe them if there's no recovery, and how you'll be informed about them. Ask whether you'll receive an itemized list of costs at the end of the case. Understanding costs ahead of time helps you know what to expect when payments arrive. Ask whether costs such as copying or postage are billed, and how large expenses like expert reviews are approved before they are incurred.

A fee agreement is a contract, and you're entitled to understand it fully. Take time to read it, and ask a trusted family member or another attorney to look at it if you'd like. Check what happens if you end the relationship, whether fees are shared with another firm, and how trust payments are treated. A reputable firm will answer these questions patiently and in writing. Be cautious of pressure to sign immediately, especially during an emotional time right after diagnosis. Keep a signed copy of the final agreement with your other case records, and note the date you signed it.

1. 1

   Ask for the complete fee agreement in writing before making any decision.

2. 2

   Confirm whether the percentage is calculated before or after case costs.

3. 3

   Ask how case costs are tracked and whether you'd owe them without a recovery.

4. 4

   Have a trusted person read the agreement with you before you sign it.