Wayne Cohen, lawyer, attorney: How Does A Contingency Fee Work?

Wayne Cohen, lawyer, attorney:  How Does A Contingency Fee Work?


Many states have different rules and regulations regarding contingency fees. For purposes of this blog entry, I’ll speak to generally what occurs in the District of Columbia since I am a personal injury attorney in Washington, DC.   Contingency fees are often used in personal injury cases, and some other types of litigation disputes.  The overall structure of the fee is that the personal injury lawyer is paid a percentage of the recover.  If the lawyer wins the case on behalf of the client, then the lawyer is able to recover a fee.  On the other hand, if the lawyer does not win the case, then there is no fee.  Expenses are usually handled differently, with the client often being responsible for the personal injury attorney’s expenses regardless of what occurs with the fee. 

Contingency fees have pros and cons.  First, let me start with the pros.  The biggest advantage of a contingency fee is that it puts the lawyer and the client in the same situation.  For example, if the case pertains to an automobile accident, and the personal injury lawyer is working on a contingency basis, then the lawyer will not receive a fee unless the client wins the case.  The lawyer has an additional incentive to win the case because the greater the recovery, the bigger the fee. Another advantage is if the client loses the case, there are no fees that are owed to the lawyer.  This places a great amount of risk on the case upon the lawyer.

Now let me go into the cons.  One con of a contingency fee is that they rarely can be used if the client is a defendant in a case.  A defendant means that the client is being sued.  In this case the contingency arrangement is generally one that will not be accepted by a lawyer.

Contingency fees in injury cases usually range between 33 1/3%  and 40%.  Many top personal injury attorneys charge 33 1/3 % of the recovery if the matter does not proceed to litigation, and 40% of the fee if the matter proceeds to litigation.

Wayne Cohen
1220 19th Street, NW
Suite 510
Washington, DC 20036
202-955-4529
www.cohenandcohen.net