A contingency fee is a fee that is paid if the attorney obtains a recovery on behalf of the client. If no money is obtained by the lawyer in the case, then the client does not owe the lawyer a fee. If a monetary award is obtained, either through settlement or verdict, the lawyer receives a percentage of the total recovery.
The amount a lawyer can charge for a contingency fee is generally not regulated by law. Contingency fees are fairly uniform and most attorneys charge a contingency fee of 33 1/3 of the total recovery. However, a more complex and time consuming case which requires the expenditure of considerable costs by the lawyer will result in a higher contingency fee. If a lawyer must risk substantial sums of money on a particular case, he or she may also charge a higher contingency fee. Also, if the case involves a second trial or appeal, the contingency fee may be increased.
A common question raised by clients is whether the contingency fee is calculated on the total amount recovered or is it calculated on the total amount after the expenses have been deducted. Most attorneys calculate the contingency fee based upon the total amount recovered.