The standard contingency fee for an attorney is one-third of the recovery, which comes to roughly 33.3%. In practice the number runs anywhere from 25% to 40%, and where your case lands in that range depends on how complex it is, how far it has to go before resolving, and how much risk the lawyer is taking on. The percentage, the costs, and the method of calculation all have to be spelled out in a written agreement you sign before any work begins, so you should know the exact numbers before the first phone call to the insurance company.
The Standard Percentage and Typical Range
One-third has been the default in personal injury work for decades. On a $90,000 settlement, that is roughly $30,000 to the attorney. The American Bar Association describes the customary range as one-third to 40 percent of the recovery.1American Bar Association. Fees and Expenses Some attorneys will take straightforward cases for as little as 25%. Unusually complex or risky cases can push toward 40% or slightly above.
For most case types, no statute sets the percentage. It is a negotiated number, bounded by the ethics rule that fees have to be reasonable in light of the time and skill required, the amount at stake, local custom, and the uncertainty of the outcome.2American Bar Association. Model Rules of Professional Conduct – Rule 1.5 Fees
Why the Rate Changes by Case Stage
Many contingency agreements use a graduated structure. A common setup:
- 33.3% if the case settles during negotiations, before a lawsuit is filed
- 35% to 37% once a lawsuit has been filed but before trial
- 40% if the case goes to a verdict or requires an appeal
The logic is simple. A case that settles after a demand letter takes a fraction of the attorney time and expense of one that goes through depositions, expert witnesses, motions, and a multi-day trial. The rate climbs with the workload.
Case risk pushes the number the same way. A clear rear-end collision with strong medical records is a low-risk file, and some attorneys will take it for less. A medical malpractice claim requiring multiple expert reviews against a hospital system carries real risk of recovering nothing after hundreds of hours and tens of thousands of dollars in costs, and the percentage reflects that.
Can You Negotiate a Lower Rate
Yes, often. The percentage is not take-it-or-leave-it, and a few things give you leverage. Strong liability and well-documented damages reduce the attorney’s risk. Showing up with the medical records, the police report, and the insurance correspondence already gathered reduces the firm’s upfront work.
You can also negotiate structure rather than just the headline number. One version: 30% if the case settles within 90 days, 35% if it goes longer. Another: you cover certain costs yourself in exchange for a lower percentage. The worst answer you get is no, and the explanation itself tells you something about how the attorney values the case.
Costs and Expenses Are Separate
The contingency percentage pays for the attorney’s professional work only. Litigation costs are a different bucket, and they can run high: court filing fees, charges for obtaining medical records, deposition transcripts, expert witness fees, postage, copying. The ABA treats these as distinct from attorney fees and notes that win or lose, you will likely owe filing fees and evidence-gathering costs.1American Bar Association. Fees and Expenses
How those costs get handled depends on the agreement. Some firms advance everything and deduct it from the settlement at the end. Some advance costs but expect reimbursement even on a loss. A few absorb all costs if the case is lost, and use that as a marketing point. Ask directly before signing.
Gross vs. Net: The Hidden Variable
The biggest swing in your take-home comes from whether the fee is calculated on the gross recovery or on what is left after costs are taken out. Many clients do not notice the difference until settlement day.
The same $100,000 settlement, with $10,000 in case costs and a 33.3% fee:
- Gross method: the attorney takes 33.3% of $100,000 ($33,300), then costs come out of what remains. You get $56,700.
- Net method: costs come out first ($100,000 minus $10,000 = $90,000), then the attorney takes 33.3% of $90,000 ($29,970). You get $60,030.
Same settlement, same percentage, more than $3,300 difference. The Model Rules require every contingency agreement to state whether expenses are deducted before or after the fee is calculated.2American Bar Association. Model Rules of Professional Conduct – Rule 1.5 Fees If the agreement in front of you is vague on this, ask.
What You Owe If You Lose
Under a contingency arrangement, you owe no attorney fees if there is no recovery. That is the deal. But “no attorney fees” is not the same as “no bill.” Whether you owe case costs on a loss depends entirely on the agreement. Some make you responsible for advanced costs regardless of outcome. Others say the firm absorbs them. Read that clause carefully, because advanced costs in a complex case can reach five figures.
Fee Caps That Override the Standard
Most personal injury cases have no statutory cap. Several categories do, and those caps control.
Social Security Disability
Attorney fees in Social Security disability cases are capped at 25% of past-due benefits or a fixed dollar maximum, whichever is less. The current dollar cap is $9,200, effective for favorable decisions issued on or after November 30, 2024.3Social Security Administration. Fee Agreements A separate fee-petition process allows attorneys to request more, but it is uncommon.
Federal Tort Claims Act
If your claim is against the federal government, fees are capped by statute: no more than 25% of any judgment or settlement reached after suit is filed, and no more than 20% of any award resolved administratively. Charging more is a federal crime punishable by a fine of up to $2,000, imprisonment up to one year, or both.4Office of the Law Revision Counsel. 28 USC 2678 – Attorney Fees
State Medical Malpractice Caps
A number of states cap contingency fees in medical malpractice cases, often with a sliding scale that drops as the recovery grows. The caps vary by state and commonly limit fees to between 25% and 33% on the first tiers of recovery, stepping down from there. If you are pursuing a med-mal claim, ask whether your state imposes a cap and how it applies to the math.
Cases Where Contingency Fees Are Not Allowed
Two categories are off limits under the Model Rules, which nearly every state has adopted. Attorneys cannot charge a contingency fee to defend a criminal case. And they cannot tie a fee in a domestic relations matter to securing a divorce or to the amount of alimony, support, or property settlement.2American Bar Association. Model Rules of Professional Conduct – Rule 1.5 Fees Outside those two, contingency fees show up most often in personal injury, product liability, medical malpractice, employment discrimination, and class action work.
Taxes Can Reshape the Math
Most people with a personal injury settlement never owe tax on it. Federal law excludes damages received on account of personal physical injuries or physical sickness from gross income, and that exclusion covers the full settlement, including the portion paid to the attorney.5Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
The picture changes sharply when the case is not about a physical injury. Employment discrimination, defamation, emotional distress without physical injury, breach of contract: the full settlement is taxable. The Supreme Court held in Commissioner v. Banks that a plaintiff’s taxable income includes the portion of the recovery paid to the attorney as a contingency fee.6Justia US Supreme Court. Commissioner v. Banks – 543 US 426 (2005) On a $200,000 employment discrimination settlement with a 40% fee, you could owe tax on the full $200,000 even though $120,000 reached you.
Congress carved out a fix for certain claims. In unlawful discrimination and whistleblower cases, attorney fees are deductible as an above-the-line adjustment, so you are taxed roughly on what you actually keep.7Office of the Law Revision Counsel. 26 USC 62 – Adjusted Gross Income Defined For other taxable settlement categories, no such deduction exists. The IRS publishes detailed guidance on what is and is not taxable.8Internal Revenue Service. Tax Implications of Settlements and Judgments If your case is not a physical injury case, talk through the tax picture before you sign a fee agreement.
What to Check Before You Sign
The Model Rules require the contingency agreement to be in writing, signed by the client, and to state the percentage at each stage, identify which expenses come out of the recovery, and specify whether those expenses come out before or after the fee is calculated.2American Bar Association. Model Rules of Professional Conduct – Rule 1.5 Fees Beyond those minimums, read closely for:
- How “recovery” is defined. Some agreements include the value of structured settlements, medical bill reductions, or other non-cash benefits in the figure the percentage applies to.
- Cost responsibility if the case is lost. This is the clause most clients overlook.
- What happens if you fire the attorney or the attorney withdraws, including any lien on a later recovery.
- Any arbitration clause for fee disputes, which can waive your right to go to court over the fee itself.
If You Switch Attorneys Mid-Case
You can fire a contingency-fee attorney at any time, but the firing does not wipe out their claim to compensation. A terminated attorney is generally entitled to the reasonable value of the work performed, calculated on hours, complexity, and how far the case progressed. The term is quantum meruit. In many jurisdictions the former attorney can place a lien on the eventual settlement to secure that amount. When a new firm takes over, the two firms usually negotiate how to split a single contingency fee rather than stacking two on top of each other, so the total percentage you pay should not exceed what one attorney would have charged. Sorting out the division can delay your distribution, so ask the new attorney how they will handle the predecessor’s lien before signing anything.