Contingency Fee

The contingency fee model makes legal representation accessible to injury victims who cannot afford hourly rates — aligning the attorney's financial interest with the client's outcome.

Contingency Fees in Personal Injury Cases

Contingency fees are the near-universal billing model in California personal injury practice. They allow injured people to hire experienced attorneys without any upfront cost.

How the percentage is calculated. The fee is expressed as a percentage of the gross recovery — the total settlement or judgment before costs and liens are deducted. California Rule of Professional Conduct 1.5(c) requires the method of calculation to be clearly spelled out in the written fee agreement.

Typical rate structure. Most California personal injury attorneys charge approximately 33⅓% if the case resolves before a lawsuit is filed, and 40% if suit is filed and the case proceeds toward trial. Some agreements have additional tiers for cases that reach trial or appeal.

Costs versus fees. The contingency fee covers the attorney's time. Case costs — filing fees, expert witness fees, medical record requests, deposition costs — are separate and are typically advanced by the attorney and deducted from the recovery. The fee agreement must specify whether costs are deducted before or after the percentage is applied.

MICRA cases. In medical malpractice cases, the Medical Injury Compensation Reform Act (MICRA), as amended by AB 35 (2023), caps contingency fees at 25% of the first $500,000 recovered, 15% of the next $500,000, and 10% of amounts above $1 million.

How Contingency Fees Work in Practice

At the outset of representation, the client and attorney execute a written fee agreement (sometimes called a retainer agreement). The agreement identifies the claim, states the fee percentage, explains how costs will be handled, and sets out the client's right to discharge the attorney.

When the case resolves, the attorney prepares a settlement statement — sometimes called a closing statement or disbursement sheet. The statement shows the gross recovery, the attorney's fee, itemized costs, any medical liens or subrogation claims that must be paid, and the net amount going to the client.

Example (simplified). A car accident case settles for $120,000. Attorney's fee at 33⅓% = $40,000. Case costs advanced: $4,000. Medical lien: $15,000. Net to client: $61,000.

Clients have the right to discharge their attorney at any time — but the discharged attorney retains a lien on any subsequent recovery for the reasonable value of work performed (quantum meruit) up to the contingency percentage.

California-Specific Rules

California's primary regulation of contingency fees is found in Rule of Professional Conduct 1.5 and Business and Professions Code section 6147, which applies to contingency fee contracts in civil cases.

Under Business and Professions Code § 6147, a contingency fee contract that is not in writing is voidable at the client's option. An attorney who fails to comply with the written contract requirement may be unable to collect any fee.

In workers' compensation cases, contingency fees are separately regulated by the Workers' Compensation Appeals Board, with fees requiring board approval and subject to a statutory cap.

California does not cap contingency fees in standard personal injury cases (other than MICRA medical malpractice cases). The fee must be "reasonable" under the circumstances, with the reasonableness standard applied to the agreement as a whole.

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