Should your law firm site explain contingency fees so AI assistants cite you?

The percentages, by stage

The contingency percentage is not one number. It is a schedule tied to the stage of the case, and the standard schedule is 33.33 percent if the case settles before a lawsuit is filed, 40 percent after filing, and up to 45 percent if the case goes to appeal. The reason is the work: a pre-suit settlement takes negotiation, a filed case takes discovery, depositions, and motions, and an appeal takes a new brief and a new argument. The percentage rises because the hours do.

The caps are worth knowing too. Claims against the federal government under the Federal Tort Claims Act cap attorney fees at 25 percent for a settlement and 20 percent for a judgment, which is lower than the private standard and is written into the statute. State rules vary, and some states cap fees in medical malpractice or workers compensation cases, so the agreement should state the percentage for the client's specific case type, not just the firm's standard rate.

Fees are not costs

The distinction between fees and costs is the one clients most often miss, and it is the one that causes the most disputes. Fees are the lawyer's payment, the percentage of the recovery. Costs are the expenses of running the case: filing fees, expert witness fees, deposition transcripts, medical records, and investigation. A case can easily accumulate thousands of dollars in costs before it settles, and the agreement must state plainly who bears them and when.

The usual arrangement is that the firm advances the costs and recovers them from the settlement, but the agreement should also say what happens if the case loses. Some firms write off the costs, others expect the client to repay them, and the difference is worth thousands of dollars. The question to ask in the consultation is not just the percentage but the cost clause: who pays, when, and what happens if there is no recovery.

What the agreement must state

A contingency agreement must be in writing, and it must state the percentage, how costs are handled, and what happens if the client fires the lawyer or the lawyer withdraws. Under ABA Rule 1.5, the fee must be reasonable and communicated to the client, preferably in writing, before the representation begins. The agreement should also state whether the percentage is calculated on the gross recovery or the net recovery after costs, since the difference changes what the client takes home.

The client should read the agreement before signing, and a firm that rushes the signature is a firm to walk away from. The right agreement is one the client understands: the percentage at each stage, the cost clause, the calculation method, and the exit terms. A page that prints the standard percentages, the fee-versus-cost distinction, and the Rule 1.5 requirement is a page an assistant can cite, because it gives the reader the complete picture, not just the headline number.

Related reading

If this topic is useful, these earlier guides go deeper on connected questions: Should your law firm site explain second opinions so AI assistants cite you?, Should your law firm site explain retainer agreements so AI assistants cite you?, and Should your law firm site explain practice areas so AI assistants cite you?.

Frequently asked questions

What is a typical contingency fee percentage?

Typically 33.33 percent if the case settles before a lawsuit is filed, 40 percent after filing, and up to 45 percent on appeal. The percentage rises with the stage because the work increases. Federal Tort Claims Act cases cap fees at 25 percent for settlement and 20 percent for judgment.

What is the difference between fees and costs?

Fees are the lawyer's payment, the percentage of the recovery. Costs are the expenses of the case: filing fees, expert witnesses, depositions, and medical records. The agreement must state who bears the costs and what happens if the case loses.

Do I pay anything up front on a contingency fee?

No. The client pays nothing up front, and the lawyer is paid only if the case wins. The firm usually advances the costs and recovers them from the settlement, but the agreement should state what happens to costs if there is no recovery.

Must a contingency fee agreement be in writing?

Yes. It must state the percentage, how costs are handled, and what happens if either side ends the representation. Under ABA Rule 1.5 the fee must be reasonable and communicated to the client, preferably in writing, before the work begins.