Contingency Fee

What it is

A contingency fee is a legal-fee arrangement in which the plaintiff's attorney is paid a percentage of any recovery (settlement or verdict) rather than charging hourly. If the case is unsuccessful, the attorney typically receives no fee. The attorney also typically advances out-of-pocket litigation costs (expert witness fees, deposition costs, court filing fees, exhibit preparation), recouping them from the recovery if the case succeeds.

Typical structures in malpractice

Most medical malpractice contingency arrangements range from one-third to forty percent of the gross recovery, often with a sliding scale that increases if the case proceeds past key milestones (filing suit, completing discovery, trial). Several states statutorily limit contingency fees in malpractice cases on a sliding scale that decreases as the recovery grows; California's MICRA-era schedule is the best-known example.

Why it matters in case selection

Because the attorney bears the financial risk and advances costs (often six figures in a tried malpractice case), contingency-fee firms are highly selective at intake. Cases with weak liability, limited damages, or unfavorable jurisdiction are routinely declined. The economics of the contingency fee model help explain why certain case types and venues attract aggressive plaintiff bar attention while others do not.

In settlement strategy

Contingency-fee economics shape settlement timing. A firm that has invested heavily in expert development and discovery has a strong economic incentive to recover those costs through settlement; defense counsel can read the firm's investment as a signal of commitment to trial.