What Is A Contingency Fee Agreement?

In a contingency fee agreement the client is not charged an up front fee but agrees to give the lawyer a certain percentage of the money received if you win or settle your case out of court. If you lose, the lawyer does not receive a fee but you may still have to pay any court costs and other expenses that are involved. Depending on the circumstances, these costs can be quite high. In some cases, the lawyer may use the money you receive from the case to pay some of these additional costs for you when they are due. Be sure your contingency agreement spells out the percentage the lawyer will get, including if there is a difference between if it is settled or if the case goes to trial. Also, get an estimate of the court costs and other expenses, and find out whether the lawyer's share is paid after the other expenses are deducted or before, it can make a big difference in the amount you receive from the settlement. Some states do not allow contingency fee agreements in certain areas, such as divorce or criminal defense.

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