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Legal Conditional Fee Agreement

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LEGAL CONDITIONAL FEE AGREEMENT

This Conditional Fee Agreement ("Agreement") is made as of Effective Date: by and between Client Name: whose address is ("Client"), and Attorney Name: of Firm Name: Bar Number: whose principal office is ("Attorney").

RECITALS

WHEREAS, Client desires to engage Attorney to prosecute or defend certain claims, actions or causes of action described below and to obtain monetary or other recoveries on behalf of Client; and

WHEREAS, Attorney is willing to undertake such representation on a conditional (contingent) fee basis, subject to the terms and conditions set forth in this Agreement; and

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to fees, costs, settlement, and disbursement of any recovery.

NOW, THEREFORE

In consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement the following definitions apply:

"Gross Recovery" means the total value of all compensation, proceeds, damages, settlements, judgments, awards, or other monies or property actually received by or on behalf of Client in connection with the matters for which Attorney is retained, before deduction of Costs and Expenses.

"Net Recovery" means Gross Recovery less Costs and Expenses as defined in this Agreement and other amounts required by law to be paid from recovery.

2. SCOPE OF ENGAGEMENT

Client hereby retains Attorney to represent Client with respect to the following matter(s):

The representation shall not include appeals, separate administrative proceedings, or unrelated matters except as expressly agreed in writing.

3. CONDITIONAL FEE

Client agrees to pay Attorney a contingent fee determined as follows:

- If a recovery is obtained prior to filing suit: % of Gross Recovery.

- If a recovery is obtained after filing but prior to trial: % of Gross Recovery.

- If a recovery is obtained after trial or on appeal: % of Gross Recovery.

The percentages set forth above are calculated as a percentage of Gross Recovery unless expressly modified in writing. The parties may agree to a different fee in writing at any time.

4. COSTS AND EXPENSES

"Costs and Expenses" include filing fees, expert and consultant fees, deposition costs, travel, courier, mediation fees, investigators, process servers, service of process, photocopying, postage, and other out-of-pocket expenses reasonably incurred in connection with the prosecution or defense of the matter.

Attorney will:

Estimated initial costs (if any): $

Unless otherwise agreed in writing, Costs and Expenses shall be reimbursed from Gross Recovery prior to disbursement to Client and Attorney. If there is no recovery, Client shall for unrecovered advanced costs as indicated above.

5. CALCULATION, ACCOUNTING, AND DISBURSEMENT

Upon receipt of any Gross Recovery, Attorney shall provide Client with a written accounting that shows the Gross Recovery, Costs and Expenses deducted, Attorney's contingent fee calculation, and the net amount payable to Client. Disbursement shall occur within a commercially reasonable time after final receipt and clearance of funds.

6. SETTLEMENT AUTHORITY

Attorney shall consult with Client prior to any compromise or settlement. Client grants Attorney authority to settle claims for amounts not less than $ without further written authorization. For settlements below that amount, Attorney shall obtain Client's express written consent.

7. TERMINATION

Client may terminate this Agreement at any time upon written notice. Attorney may withdraw for good cause upon compliance with applicable rules of professional conduct and court orders. If terminated by Client without cause, or if Attorney withdraws for cause, Attorney shall be entitled to be paid reasonable attorney's fees and reimbursement for Costs and Expenses for services performed and costs advanced prior to termination, which may include a reasonable contingent recovery on any subsequent recovery, as permitted by law.

8. ATTORNEY'S LIEN

Attorney shall have a charging lien and/or retaining lien on any claim, cause of action, settlement proceeds, judgment or award to secure payment of fees and Costs and Expenses due under this Agreement to the extent permitted by law.

9. CONFIDENTIALITY AND CONFLICTS

Attorney will maintain the confidentiality of information provided by Client subject to Attorney's ethical duties and applicable law. Client represents that Client has disclosed all material facts and potential conflicts. Attorney shall disclose any conflict of interest that arises and will not proceed if ethical rules prohibit representation unless a valid waiver is obtained.

10. DISPUTE RESOLUTION

Any dispute concerning the interpretation or enforcement of this Agreement shall first be submitted to good faith negotiation. If unresolved, the dispute shall be submitted to binding arbitration according to the rules agreed by the parties. The seat of arbitration, if any, shall be in the jurisdiction specified under Governing Law below unless otherwise agreed in writing.

11. GOVERNING LAW

This Agreement shall be governed by, and construed in accordance with, the laws of the State of without regard to its conflict of laws principles.

12. NOTICES

Client Notice Address:

Attorney Notice Address:

Notices shall be in writing and shall be deemed given when delivered in person, sent by certified mail, or by other means that provide confirmation of delivery, to the addresses set forth above or to such other address as either party may designate by notice.

13. AMENDMENTS, WAIVER, SEVERABILITY, ENTIRE AGREEMENT

This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements. No amendment or waiver shall be effective unless in writing and signed by both parties. A waiver of any breach shall not constitute a waiver of any subsequent breach. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

14. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

SIGNATURES

Client:

Printed Name:

By:

Date:

Attorney / Firm:

Printed Name:

By:

Date:

Enter text✕

What a Legal Conditional Fee Agreement Is

A Legal Conditional Fee Agreement is a fee-arrangement contract commonly used by attorneys and law firms that ties payment for legal services to achieving specified outcomes. The agreement defines the circumstances that trigger payment, the fee calculation method (percentage of recovery, flat fee, or hybrid), and how costs and expenses are handled if the case is unsuccessful. It also sets client and lawyer responsibilities, timeframes for performance, and dispute resolution. Properly drafted conditional fee agreements reduce billing disputes by documenting expectations, but they often require state-specific compliance and clear disclosure of contingent terms.

Why This Agreement Matters for Contingent Legal Work

Used primarily in litigation and contingency engagements, a Legal Conditional Fee Agreement aligns client and counsel incentives by linking payment to successful outcomes. It clarifies fee splits, expense responsibility, and termination rights while requiring transparent disclosure to meet ethical and statutory rules.

Why This Agreement Matters for Contingent Legal Work

Who Typically Completes This Agreement

Used primarily by clients and attorneys in contingency-fee matters, this form documents payment triggers and fee calculations.

  • Private plaintiffs hiring counsel for tort or contract recovery on contingency.
  • Law firms documenting percentage-based or hybrid contingent fee structures with clients.
  • In-house counsel using outside counsel under success-fee or performance clauses.

Ensure the agreement matches professional conduct rules and state statutes, and obtain client informed consent and attorney review.

Primary Parties and Their Roles

Client (Plaintiff)

Typically an individual or entity seeking recovery who lacks the resources for hourly litigation costs and agrees to pay counsel a contingent portion of any recovery. The client should understand fee percentages, expense responsibility, and potential post-settlement deductions.

Attorney (Counsel)

A law firm or attorney who accepts case risk in exchange for contingent compensation. Counsel must disclose fee structure, estimate costs, comply with bar ethics rules, and obtain informed client consent; state law may limit enforceable fee percentages.

Security and Compliance Essentials for Electronic Execution

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Certifications: SOC 2 Type II; ISO 27001; PCI DSS
HIPAA: HIPAA compliant with BAA available
ESIGN & UETA: Complies with ESIGN and UETA
21 CFR Part 11: Supports 21 CFR Part 11 requirements
Audit Trail: Detailed timestamps, IPs, and activity logs

Key Risks and Potential Penalties

Missed Payment Trigger: Dispute and litigation risk
Invalid Fee Amount: Potential fee forfeiture
Bar Rule Violation: Ethics sanctions possible
Incorrect Disclosure: Agreement unenforceable
Tax Withholding: Backup withholding triggered
State Noncompliance: Statutory penalties vary

Common Preparation Mistakes to Avoid

  • Failing to define the success condition precisely, causing disputes over whether the trigger event occurred.
  • Using vague fee language like 'reasonable percentage' without numerical ranges or calculation examples creates enforceability issues.
  • Omitting expense allocation rules leads to unexpected client liabilities and fee disputes at settlement or post-judgment deductions.
  • Not tailoring the agreement to state law or bar rules risks sanctions, fee reductions, or unwinding of the contract.

Step-by-Step: Complete and Execute the Agreement

Follow these steps to complete and execute a Legal Conditional Fee Agreement accurately and in compliance with applicable rules.

  • 01
    Draft Terms: Specify success trigger and fee calculation method.
  • 02
    Allocate Costs: State who pays expenses on loss or recovery.
  • 03
    Compliance Review: Confirm alignment with state bar and statutes.
  • 04
    Sign & Record: Execute signatures and retain originals and copies.

How Execution and Distribution Typically Flow

Typical workflow from drafting to execution and distribution of a Legal Conditional Fee Agreement for litigation matters.

  • Prepare Draft: Include fee percentage, trigger events, expense rules.
  • Negotiate Terms: Discuss percentages, timelines, and termination clauses.
  • Obtain Consent: Provide disclosures and obtain written client consent.
  • Execute: Signings witnessed or notarized where required by state law.

Core Elements a Professional Agreement Should Include

A robust Legal Conditional Fee Agreement clearly allocates risk, defines fee methodology, specifies expenses handling, and includes compliance and termination provisions.

Fee Structure

Describe precisely whether fees are a percentage of gross or net recovery, flat supplemental amounts, or a hybrid. Include example calculations showing how fees and costs are deducted from settlements or judgments to avoid later disputes.

Trigger Conditions

List the exact outcome(s) that activate payment obligations, such as court judgment, settlement, dismissal with payment, or statutory award. Clarify partial payments and scenarios that produce no fee.

Expense Handling

Specify which expenses (filing fees, expert witness costs, court costs, mediation fees) are advanced by counsel, which are reimbursed only upon recovery, and whether expenses reduce client recovery before fee calculation.

Duration & Termination

State the agreement’s effective date, term limits, notice requirements, grounds for termination, and consequences for withdrawal by counsel or client including obligations for costs and outstanding work.

Client Disclosures

Provide written consumer disclosures when required, inform clients of the right to alternative billing, and document informed consent, especially for consumer-facing matters subject to 15 U.S.C. §7001 ESIGN disclosure rules.

Dispute Resolution

Include governing law, jurisdiction, arbitration or mediation clauses, and fee-shifting provisions where permitted. Specify how disputes over fee calculations are resolved and any tribunal limitations.

Configuring an Online Workflow for the Agreement

Configure an online version to capture signatures, apply conditional fields, and enforce authentication and retention controls.

Field Configuration
Signing Mode In-person, email link, or embedded
Authentication Email link, SMS code, or KBA
Conditional Logic Show fee fields only if contingency applies
Retention Policy PDF/A export, audit trail retention settings

Platform Features to Support Electronic Execution

Use an eSignature platform that supports conditional fields, audit trails, and secure signer authentication for electronic execution of conditional fee agreements.

  • Formats Supported: PDF, DOCX, HTML, and Excel
  • Integrations: Salesforce, NetSuite, Microsoft 365
  • Access Controls: SSO, role-based permissions and audit logging

eSignature Pricing and Feature Snapshot

Simple vendor comparison focusing on price, bulk sending, audit trails, HIPAA support, and envelope limits for conditional-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 trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No envelope cap 100 envelopes/user/year Not disclosed Not disclosed Not disclosed

Critical Dates and Timing Considerations

Key dates to track include engagement effective date, fee trigger events, client termination notice periods, and timelines for calculation and payment following recovery.

Engagement Effective Date:

Date agreement takes effect; enter MM/DD/YYYY.

Notice Periods:

State how many days' notice required for termination.

Fee Trigger Timing:

Specify when fee becomes due after settlement or judgment.

Payment Schedule:

Outline payment deadlines and installment options if any.

Tax Reporting:

Document payer responsibilities for 1099 reporting where applicable.

Real-World Examples of Electronic Agreement Use

Real organizations use eSignature platforms to execute fee agreements and related court filings reliably, improving compliance and document turnaround in contingent matters.

Tim Martin — Martin Properties

Tim Martin's team uses an eSignature workflow to finalize agreements and maintain compliance across mobile and office environments.

  • Faster execution on mobile devices.
  • I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently.

John Butler — Fertility Centers of Illinois

John Butler uses eSignature to manage consent and fee documentation across clinical workflows, reducing administrative bottlenecks.

  • Secure, auditable consent capture online.
  • The airSlate SignNow team has been exceptional, responsive, the API has been great, and we're extremely happy that we chose airSlate SignNow as a company. This reduced time to secure signatures for patient consent and billing forms across locations.

Frequently Asked Questions

Common questions about creating, signing, and enforcing Legal Conditional Fee Agreements, including eSignature legality, notarization, and retention expectations.


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