What Is a Contingency Fee?
A contingency fee is a fee that depends on winning money for the client. If the lawyer recovers compensation through a settlement or verdict, the lawyer receives an agreed share of it. If not, the client owes no attorney’s fees.
This differs from other fee types:
- Hourly fees: the client pays for every hour the lawyer works, win or lose.
- Flat fees: a set price for a defined task.
- Retainers: an upfront deposit billed against as work is done.
How Does a Contingency Fee Work in Texas?
Texas requires a contingency fee contract to be in writing and signed by the lawyer and the client. The agreement should explain:
- How the fee is calculated and whether it changes if the case goes to trial or appeal
- How case-related items are handled
- How and when settlement money is distributed
Read it carefully and ask questions before signing.
How Payment Works When the Case Resolves
When a case settles or a judgment is paid, the money usually goes into the law firm’s trust account. The firm then provides a written settlement statement showing the total recovery, the fee, any amounts paid to medical providers or lienholders, and your share. The firm pays out the balance once the funds clear.
Advantages and Disadvantages
Advantages:
- No upfront cost. You can hire a lawyer while out of work and facing medical bills.
- Shared incentive. The lawyer is paid only if you are, so they have a reason to maximize your recovery and move the case forward.
- Honest screening. A lawyer who takes your case on contingency believes it has merit.
Disadvantages:
- A share of the recovery goes to the fee, which can feel large in a case that settles quickly.
- Lawyers may decline cases with low value or doubtful liability.
Is a Contingency Fee Right for Your Injury Claim?
For most injured people, yes, because it removes cost as a barrier to getting help. At our firm, you pay nothing upfront, owe no attorney’s fees unless we recover money for you, and our fee will never exceed your recovery. Exact terms are always in writing. A free case review can answer your questions.
About Brad Parker
Frequently Asked Questions
What does "contingency fee basis" mean?
It means the lawyer's fee depends on the outcome. If the case produces a settlement or verdict, the lawyer receives the agreed share. If there is no recovery, the client owes no attorney's fees. The arrangement lets people pursue a claim without paying a lawyer out of pocket.
Do I pay anything if I lose my case?
Under a contingency fee arrangement, you owe no attorney's fees if there is no recovery. Read your written agreement to understand how any other case-related items are handled, and ask the lawyer to explain anything that is unclear before you sign.
Can the lawyer's fee be more than my recovery?
At our firm, no. Our fee will never exceed your recovery. Whatever the outcome, the fee is tied to the money actually recovered for you, and the exact terms are explained in writing before you sign.
Do all personal injury lawyers use contingency fees?
Most do. Personal injury, wrongful death, and similar cases are commonly handled on contingency because injured people often cannot afford hourly fees while out of work. Other kinds of legal matters, such as criminal defense or divorce, are not usually handled on contingency.