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Contingency Fee Agreement

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ATTORNEY FEE LETTER - CONTINGENCY

In consideration of the legal services to be rendered by The Law Office of (hereinafter referred to as "Law Firm") for any claim that (hereinafter referred to as "Client"), may have against the parties responsible for injuries and/or damages sustained by the client on or about the client does employ said Law Firm to commence and prosecute such claim.

Client agrees to pay, and hereby assign to Law Firm, a lien of 33% of all amounts recovered on behalf of Client by settlement before the filing of a lawsuit or other court action, 40% of all amounts recovered after the filing of a lawsuit or other court action but prior to trial; and 50% of all amounts recovered or awarded upon trial or if settled after preparation for trial by attorney.

A retainer fee of Dollars, ($ ), shall be paid upon execution of this agreement, which sum shall be credited against any recovery, but, in the event of no recovery, shall not be refunded. Law Firm and Client agree that no attorney-client relationship shall exist until Law Firm has been paid the initial retainer fee.

All necessary costs and expenses in the prosecution of the case shall be the responsibility of the Client. If Law Firm advances funds on behalf of the Client for any costs or expenses, Client agrees to reimburse Law Firm for such advancements.

All expenses and charges of any nature made in conjunction with the case are not litigation costs and will be paid by Client. In the event of a recovery, Client agrees that Law Firm may pay any of these unpaid bills from Client's share of the recovery. If Client recovers nothing, it is understood that Law Firm is not bound to pay any of these expenses.

Law Firm, in its absolute discretion may withdraw at any time from the case upon notice to Client if investigation discloses no basis for further action on behalf of Client, or if there is no insurance coverage. Associate counsel may be employed at the discretion and expense of Law Firm.

Client agrees not to compromise the claim without the Law Firm's consent and Law Firm is not authorized to do so without the consent of the Client.

The fee for services rendered by Law Firm does not include the perfecting of an appeal on behalf of the client or the representation of the Client if an appeal has been perfected by the adverse party. Fees for appeal shall be subject to renegotiation between Law Firm and Client.

Client agrees to keep the Law Firm advised of his whereabouts at all times and to cooperate in the preparation and trial of the case, to appear on reasonable notice for depositions and court appearances, and to comply with all reasonable requests made of him in connection with the preparation and presentation of this case.

Client hereby authorizes Law Firm to provide all information, including doctor's reports, hospital records, etc., and any and all pictures to the insurance company or the attorney for the adverse party.

NO REPRESENTATION HAS BEEN MADE REGARDING WHAT AMOUNT, IF ANY, CLIENT MAY BE ENTITLED TO RECOVER IN THIS CASE, NOR HAVE ANY WARRANTIES BEEN MADE REGARDING THE OUTCOME OF THIS MATTER.

Date:

Client Signature

Law Firm Representative Signature

NOTE: THIS IS YOUR AGREEMENT. IT PROTECTS BOTH YOU AND YOUR ATTORNEY. IT IS DESIGNED TO PREVENT MISUNDERSTANDING. IF YOU DO NOT UNDERSTAND IT OR IF IT DOES NOT CONTAIN ALL THE AGREEMENTS WE DISCUSSED, PLEASE DISCUSS IT WITH ME.

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What a Contingency Fee Agreement Is and why it matters

Contingency Fee Agreement is a written contract between a client and an attorney that sets a fee payable only if the lawyer obtains recovery through settlement, judgment, or other favorable resolution. It defines the percentage or formula used to calculate the attorney’s contingency fee, describes costs and expenses, allocates responsibilities for litigation expenses, and sets procedures for settlement approval and fee distribution. The agreement clarifies duration, scope of representation, and conflicts of interest, and it establishes how disputes over fees will be resolved.

Why a clear Contingency Fee Agreement benefits both parties

Use a Contingency Fee Agreement to align client and counsel incentives, set transparent fee calculations, and reduce billing disputes. It protects both parties by documenting costs, approval steps for settlements, and fee allocation, enhancing enforceability under state contract law and electronic signature statutes.

Why a clear Contingency Fee Agreement benefits both parties

Who commonly uses a Contingency Fee Agreement

Professionals and clients who handle contingency-based legal matters use this agreement to define terms and manage expectations.

  • Personal injury plaintiffs and their attorneys in civil tort cases.
  • Employment discrimination and wage-and-hour claimants represented on contingency fee basis.
  • Civil rights, medical malpractice, and class-action counsel and clients seeking damages.

Firms, solo practitioners, and clients use the written agreement to reduce ambiguity and document fee-earned contingencies clearly for enforcement.

Typical signatories and roles

Lead Counsel

The attorney responsible for client representation who signs the Contingency Fee Agreement on behalf of the law firm. Describes fee percentage, litigation duties, settlement authority limits, expense allocation, and obligations to provide periodic case updates and client accounting.

Client

The individual or entity engaging counsel under contingency terms. Confirms understanding of fee calculation, cost advances, duty to cooperate, medical/tort release consents, and consent to electronic communications and signatures where permitted by ESIGN/UETA.

Core elements every professional Contingency Fee Agreement should include

These components define obligations, fee mechanics, and processes for settlement and dispute resolution to reduce future conflicts.

Fee Calculation

Specify the contingency percentage or graduated schedule, define whether it applies to gross recovery or net after expenses, and include examples showing how attorney fees are computed in typical settlement and judgment scenarios.

Costs and Expenses

Describe which litigation costs the client must repay: court fees, expert witness charges, medical record fees, deposition costs, and how these are deducted from recovery or advanced by counsel.

Scope of Representation

Define claims, jurisdictions, trial and appeal rights, and any exclusions. Specify whether counsel handles only specific causes of action or related matters without additional written consent.

Settlement Approval

Set client's consent requirements for settlement offers, counsel’s authority to negotiate, notification timelines, and detailed procedures for handling structured settlements, liens, and partial distributions to multiple claimants.

Client Disclosures

Include conflicts of interest disclosure, explanation of fee calculation, right to an itemized accounting, and any consumer disclosures required under state law or 15 U.S.C. §7001 for electronic consent.

Termination

State conditions for withdrawal, client termination, and fee protections for counsel upon successful recovery from contingency actions, including post-termination fee calculation and dispute resolution clauses.

Step-by-step: completing and executing the agreement

Follow these steps to complete, review, and execute a Contingency Fee Agreement accurately and in compliance with applicable rules.

  • 01
    Prepare Parties: Enter full legal names and contact details.
  • 02
    Define Fee: Specify percentage, tiers, or formula.
  • 03
    Document Costs: List expenses and repayment terms.
  • 04
    Sign and Date: All parties sign and date in required places.

Configuring an online workflow for the agreement

Configure an online Contingency Fee Agreement workflow for secure completion, signature collection, and recordkeeping using platform settings.

Field Configuration
Authentication Email link; optional SMS code or KBA
Signer Order Specify sequential or parallel signing order
Conditional Fields Show payment fields only after settlement checkbox set
Document Retention Auto-archive PDF with audit trail for required period

Typical electronic routing and signing flow

Typical routing and authentication steps for electronically executed Contingency Fee Agreements in a secure signing workflow.

  • Upload Document: Sender uploads finalized agreement file.
  • Place Fields: Add signature, initials, and date tags.
  • Add Signers: Enter signer emails or generate signing links.
  • Complete Audit: System records timestamp, IP, and actions.

Platform and security considerations for electronic execution

Use eSignature platforms compliant with ESIGN, UETA, and applicable state rules, and ensure HIPAA BAA where required for health matters.

  • Integrations: CRM, ERP, cloud storage
  • Formats: PDF, DOCX, HTML supported
  • Security: TLS in transit, AES-256 at rest

Essential data elements to capture in the agreement

Client Name: Full legal name as ID
Case Caption: Court and docket number
Contingency Rate: Percentage or tiered formula
Expenses: Who advances and repayment terms
Settlement Approval: Client approval threshold specified
Effective Date: Enter as MM/DD/YYYY date

Timing and critical deadlines to track

Key timing considerations and common deadlines tied to Contingency Fee Agreements, including when fees are earned and when notices must be provided.

Effective Date:

Date determines when representation and obligations start.

Statute of Limitations:

Ensure filing deadlines are met to preserve claims.

Settlement Notification Window:

Notify client and obtain approval before accepting offers.

Fee Calculation Timing:

Calculate fee at settlement or judgment disbursement.

Record Retention Start:

Retention period begins on effective date or closing.

Common mistakes to avoid when preparing the agreement

  • Failing to define whether contingency applies to gross or net recovery leads to disputes over expense deductions and final attorney compensation.
  • Using vague language about costs and advances can result in unexpected deductions, surprise billing, and client complaints or fee arbitration.
  • Neglecting to obtain informed consent for electronic signatures and disclosures may impair enforceability under ESIGN and state law.
  • Failing to document client approvals for settlements or structured payment terms increases risk of ethical complaints and collection disputes.

Potential penalties and professional risks

Fee Forfeiture: Court may reduce or deny fee
Ethics Complaint: Bar discipline for improper terms
Client Lawsuit: Breach claims or refund demands
Regulatory Fines: State sanctions or financial penalties
Collection Risk: Difficulty recovering unpaid costs
Enforceability Risk: Improper consent invalidates electronic signature

Pricing and basic feature comparison for executing agreements electronically

The table compares starting prices and feature availability among common eSignature vendors relevant to Contingency Fee Agreement workflows.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Practical examples of electronic execution in real firms

Real-world examples show how contingency fee documents are executed and tracked using electronic workflows across firms of different sizes.

Optica Ventures

Optica Ventures implemented electronic agreements to streamline client intake, reducing turnaround time and manual follow-up.

  • adopting e-signature for contingency agreements.
  • The firm reports clearer documentation of fee terms, fewer billing disputes, and faster settlement processing because all contingency clauses, client consents, and audit trails are preserved in a retrievable signed PDF and audit record.

Martin Properties

Martin Properties migrated to online agreement execution to maintain compliance and speed closings across mobile and offline scenarios.

  • processing agreements online with full compliance.
  • The company observed consistent execution, preserved security controls, and the ability to provide signed contingency agreements to counterparties quickly, reducing administrative burden and improving traceability of client authorizations and settlement approvals.

Practical best practices for clarity and enforceability

Practical tips help ensure Contingency Fee Agreements are clear, enforceable, and suitable for electronic execution.

Use precise fee calculation language
Avoid ambiguous phrases like 'reasonable' fees. State exact percentages, specify whether applied to gross or net recovery, include worked examples, and describe calculation timing to reduce disagreements at settlement or during fee disputes.
Detail expense handling and repayment
Explain which expenses counsel will advance, how advances are repaid, whether liens or subrogation claims take priority, and whether interest accrues on advances, including examples of deductions from gross recovery versus net proceeds.
Obtain explicit written client consent for electronic signatures
Provide ESIGN-compliant consumer disclosure where applicable, confirm the client can access electronic records, document consent to e-sign, and record the authentication method used to ensure enforceability under ESIGN and UETA.
Maintain clear audit trails and signed copies
Retain signed PDFs with certificates of completion, preserve audit logs including IP, timestamps, and signer actions, and store records in encrypted systems to support future fee accounting, regulatory review, or dispute resolution.

Frequently asked questions about Contingency Fee Agreements

Answers to common questions about completing, executing, and enforcing Contingency Fee Agreements, including electronic signing and retention.


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