You have probably seen ads promising “No win, no fee.” That phrase describes a contingency fee arrangement, a common way lawyers are paid in certain types of cases. It can make legal help accessible to people who could not otherwise afford an attorney, but it also has details worth understanding before you sign. Here is a plain-language explanation.
How a Contingency Fee Works
In a contingency arrangement, the lawyer does not charge you upfront hourly fees. Instead, they take an agreed percentage of the money you recover, whether through a settlement or a court award. If you recover nothing, you generally do not owe the lawyer a fee for their time. This shifts much of the financial risk from you to the attorney, who only gets paid for their work if they win or settle your case.
What Kinds of Cases Use Contingency Fees
Contingency fees are most common in cases where money is being sought, such as personal injury, car accidents, medical malpractice, and certain other claims. They are generally not used and, in some categories such as criminal defense and most family law matters, are not permitted. If money damages are not the goal of your case, a contingency fee usually will not apply.
“No Fee” Does Not Always Mean “No Costs”
This is the part people most often misunderstand. A contingency fee covers the lawyer’s payment for their time, but a case also involves costs, such as court filing fees, charges for obtaining records, expert witnesses, and depositions. Read your agreement carefully to see how these costs are handled. In some arrangements, costs are advanced by the firm and repaid from your recovery, and in some you may owe costs even if the case does not succeed. Ask exactly what you would be responsible for in each scenario.
How the Percentage Is Calculated
The percentage and the way it is calculated should be spelled out in writing. Pay attention to whether the lawyer’s percentage is taken before or after case costs are subtracted, because that affects how much you ultimately receive. In Florida, contingency fee agreements must be in writing and signed, and they typically include a statement of your rights as a client. Take the time to read it and ask questions about anything unclear.
Questions to Ask
- What percentage will you take, and does it change if the case goes to trial?
- Is the percentage calculated before or after costs are deducted?
- What costs are involved, and do I owe them if we lose?
- Who decides whether to accept a settlement offer?
- What happens if I want to switch lawyers partway through?
The Advantages and the Trade-Offs
The biggest advantage is access: you can pursue a strong claim without paying out of pocket as the case goes along, and the lawyer is motivated to maximize your recovery. The trade-off is that the attorney’s percentage comes out of your award, so a portion of what you recover goes to them. For many injury claims this is a fair exchange for taking on the risk and cost of the case.
Read Before You Sign
A contingency fee can be a great option, but only if you understand it. Make sure the written agreement clearly states the percentage, how costs are handled, and what you owe if the case does not succeed. A good lawyer will walk you through these terms patiently. If something is not clear, ask before you sign rather than after.
For more on our Florida practice, see our overview of powers of attorney in Florida. Morgan Legal Group's affiliated New York office also handles New York probate and estate administration.