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Legal Contingent Fee Agreement

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LEGAL CONTINGENT FEE AGREEMENT

This Contingent Fee Agreement ("Agreement") is made as of between Counsel Name: with principal place of business at ("Counsel") and Client Name: with address at ("Client").

RECITALS

WHEREAS, Client desires to retain Counsel to pursue legal claims or remedies related to: ; and

WHEREAS, Counsel has represented to Client that Counsel has the experience and expertise to handle the matter described above and is willing to accept representation on a contingent fee basis, as set forth in this Agreement; and

WHEREAS, the parties intend by this Agreement to define their respective rights and obligations with respect to fees, costs, settlement authority, and distribution of any recovery.

NOW THEREFORE

In consideration of the mutual covenants set forth below, the parties agree as follows:

1. ENGAGEMENT AND SCOPE

1.1 Engagement. Client hereby engages Counsel to prosecute, defend, or otherwise pursue the claims and legal remedies described in the matter description above. Counsel accepts the engagement on the terms and conditions set forth in this Agreement and will represent Client in connection with the designated matter, including pre-litigation, litigation, arbitration, mediation, and appellate proceedings as reasonably necessary.

1.2 Excluded Matters. This Agreement does not cover appeals beyond the first appeal unless specifically agreed in writing, nor does it cover unrelated claims or subsequent matters unless the parties execute a written amendment.

2. CONTINGENT FEE

2.1 Fee Percentage. Client agrees to pay Counsel a contingent fee equal to % of the Gross Recovery (as defined below) obtained on behalf of Client by settlement, judgment, award, or otherwise.

2.2 Gross Recovery. "Gross Recovery" means the total value (monetary or equivalent) recovered on Client's behalf before deduction of costs, expenses, liens, or other third-party claims, including but not limited to settlement proceeds, judgment amounts, awards, and sums recovered from third parties.

2.3 Success Condition. Counsel's fee is contingent upon a recovery for the Client. If no recovery is obtained, Counsel shall not be entitled to the contingent fee described above, except as provided in Section 3 regarding costs and expenses advanced.

3. COSTS, EXPENSES, AND ADVANCEMENTS

3.1 Responsibility for Costs. Client shall be responsible for all litigation and administrative costs and expenses incurred in the prosecution of the matter, including filing fees, expert fees, deposition and transcript costs, travel, process service, investigative fees, and courier charges ("Costs and Expenses"). Counsel may, at Counsel's discretion, advance reasonable Costs and Expenses in anticipation of recovery.

3.2 Reimbursement Priority. All Costs and Expenses advanced by Counsel shall be reimbursed from the Gross Recovery prior to the calculation and payment of Counsel's contingent fee, unless otherwise agreed in writing. Client authorizes Counsel to deduct such Costs and Expenses from any recovery prior to distribution to Client.

3.3 Expense Cap (Optional). The parties may agree to a cap on pre-approved expenses: (amount in USD). If left blank, no cap applies.

4. ACCOUNTING AND DISBURSEMENT

4.1 Accounting. Within a reasonable period following any recovery, Counsel shall provide Client with a written accounting that describes the Gross Recovery, itemized Costs and Expenses, any liens or third-party claims, the calculation of Counsel's contingent fee, and the net amount payable to Client.

4.2 Third-Party Liens. Client acknowledges that any statutory or contractual liens (including but not limited to medical, workers' compensation subrogation, insurance subrogation, or government liens) may reduce Client's net recovery. Counsel shall use reasonable efforts to resolve such liens, but Client remains ultimately responsible for their satisfaction.

5. CLIENT COOPERATION

Client agrees to cooperate fully with Counsel, to provide truthful information and documents, to attend proceedings and meetings as reasonably requested, and to refrain from actions that would prejudice the representation. Failure to cooperate may be deemed a material breach of this Agreement.

6. SETTLEMENT AUTHORITY

Counsel shall consult with Client regarding any settlement offer. Client retains ultimate authority to accept or reject any settlement unless Client provides Counsel with a written limited settlement authorization:

Settlement Authorization (optional):

7. TERMINATION

7.1 Termination by Client. Client may terminate Counsel at any time upon written notice. In the event of termination, Counsel shall be entitled to reasonable compensation for work performed and reimbursement of Costs and Expenses advanced, which may include a reasonable contingency-equivalent fee for the value generated by Counsel prior to termination.

7.2 Termination by Counsel. Counsel may withdraw for good cause, subject to applicable ethical rules and court approval where required. Counsel shall provide notice and take reasonable steps to avoid foreseeable prejudice to Client.

8. CONFLICTS OF INTEREST

Counsel warrants that, to Counsel's knowledge as of the date of this Agreement, no conflict of interest exists that would prevent Counsel from representing Client. If a conflict arises, Counsel will advise Client and comply with applicable professional responsibility obligations.

9. CONFIDENTIALITY

Counsel shall maintain confidentiality of Client communications and information to the extent required by law and the rules of professional conduct, except to the extent disclosure is necessary to carry out the representation or required by law.

10. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the state selected by the parties: . Venue for any dispute arising under this Agreement shall lie in the courts located in that jurisdiction unless otherwise agreed.

11. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral.

12. SEVERABILITY

If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and shall be interpreted to effect the parties' intent as closely as possible.

13. NOTICES

Counsel Notice Address

Client Notice Address

Notices shall be deemed given when delivered in writing to the addresses provided above or such other addresses as the parties may designate in writing.

14. AMENDMENTS; WAIVER; COUNTERPARTS

Any amendment to this Agreement must be in writing and signed by both parties. Failure to enforce any provision shall not constitute a waiver of that provision. This Agreement may be executed in counterparts, each of which shall be deemed an original and together shall constitute one and the same instrument.

15. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants that it has the full power and authority to enter into this Agreement and that the execution and delivery of this Agreement has been authorized by all necessary action.

16. ADDITIONAL TERMS

Any additional terms, special arrangements, or modifications should be recorded below:

Counsel Printed Name:

By:

Date:

Client Printed Name:

By:

Date:

Enter text✕

What a Legal Contingent Fee Agreement Is and when it applies

A Legal Contingent Fee Agreement is a written contract between an attorney and a client that conditions the lawyer's fee on a successful outcome, typically a settlement or judgment. The agreement sets the contingency percentage or fee structure, allocation of costs and expenses, responsibilities of each party, and how recovered proceeds will be distributed. Common in personal injury, medical malpractice, employment, and certain civil recovery matters, these agreements shift litigation risk to the lawyer and provide access to representation when clients cannot pay hourly fees.

Why using a clear contingent fee agreement matters

A well-drafted agreement clarifies fee percentages, expense allocation, settlement approval, and dispute resolution to reduce later disagreements and disciplinary risk under state professional rules.

Why using a clear contingent fee agreement matters

Who typically enters a contingent fee agreement and why

The agreement is used by plaintiffs and attorneys in contingency-practice matters to document terms, expectations, and client consent before work begins.

  • Individual clients seeking representation without up-front hourly costs, commonly in tort, medical, or wage cases.
  • Plaintiff-side law firms offering contingent representation for cases with potential monetary recovery.
  • In-house counsel or claims departments using contingency counsel for external litigation or recovery.

Primary signatories and their roles

Client

The individual or entity hiring the lawyer. The client must sign to show informed consent to the contingency terms, expense allocation, and settlement approval process. Mismatched or unsigned agreements create enforceability and tax issues.

Attorney

The licensed lawyer or law firm entering the contingency arrangement. The attorney should include bar identification where required, disclose percentage calculations, and retain a signed copy for the client per state ethical rules.

Essential data and fields to collect

Client name: Full legal name
Attorney info: Firm name and bar ID
Case description: Short matter summary
Contingency rate: Percentage or tier
Expense allocation: Who pays costs
Signature dates: MM/DD/YYYY format

Core clauses every professional contingent fee agreement should include

Include precise provisions governing fees, costs, client approvals, and dispute resolution so parties understand payments, obligations, and risk allocation from the outset.

Contingency percentage

Specify the exact percentage or sliding scale tied to different recovery thresholds and whether it applies to gross or net recovery after expenses.

Expenses and advances

Define which litigation costs the client repays, whether advanced by counsel or deducted from recovery, and how unrecovered advances are handled.

Settlement approval

State that client approval is required for settlement, outline the approval process, and indicate any power of attorney or limited settlement authority if applicable.

Fee splitting

Describe division with co-counsel or referral counsel, including percentages and compliance with state bar rules on fee sharing.

Termination rights

Explain how either party may end representation, effect on fees if case later succeeds, and obligations for file transfer and accounting.

Dispute resolution

Specify governing law, venue, and whether fee disputes go to arbitration or court under applicable state rules.

Quick procedure to complete and execute the agreement

Follow these steps to prepare a compliant, signed contingent fee agreement and retain required documentation.

  • 01
    Collect documents: Assemble IDs, case summary, and fee worksheet.
  • 02
    Draft terms: Populate contingency rate and expense clauses.
  • 03
    Review with client: Explain approval and distribution mechanics.
  • 04
    Sign and store: Obtain signatures and archive executed copy.

Configuring an online workflow for the contingent fee agreement

Use these settings when preparing the agreement for e-signature to ensure attribution, audit trails, and client copies are preserved.

Field Configuration
Required signature fields Client and attorney signers
Date fields Auto-fill MM/DD/YYYY
Conditional fields Show expense terms if 'expenses advanced' checked
Certificate storage Attach audit trail to signed PDF

Preparing for secure distribution and e-signature

Select an eSignature platform that supports audit trails, PDF export, and required authentication methods for legal agreements.

  • File formats: PDF / DOCX supported
  • Authentication: Email, SMS, or advanced methods
  • Integrations: Common: Salesforce, NetSuite

Typical routing from draft to finalized executed agreement

A clear end-to-end flow ensures timely client acceptance and preserves the audit trail required for enforceability.

  • Prepare draft: Populate fields and attach fee worksheet
  • Assign signers: Add client and attorney email addresses
  • Send for signature: Use authenticated signing link
  • Archive executed copy: Save signed PDF and audit log

Timing considerations and recommended internal deadlines

Set internal deadlines to secure client consent, obtain signatures, and complete post-settlement accounting promptly.

Client review period:

Allow at least 3 business days for informed consent

Execution deadline:

Obtain signatures before substantive work begins

Settlement accounting:

Provide accounting within 30 days of distribution

Tax reporting:

Issue 1099s and related forms by IRS deadlines

Record retention:

Archive executed agreement per retention policy

Key milestones from engagement through distribution

Track these sequential milestones to coordinate work, client approvals, and final disbursement of recovered funds.

01

Engagement signed

Client signature and effective date recorded

02

Case milestones

Filing, discovery, or mediation events logged

03

Settlement reached

Client approval and settlement documentation obtained

04

Distribution

Expenses, fees, and net client payment disbursed

Common preparation errors to avoid

  • Leaving contingency percentage ambiguous or failing to specify gross versus net calculation leads to disputes.
  • Failing to state who advances or bears litigation costs creates uncertainty about repayment after recovery.
  • Not obtaining a signed client copy or failing to preserve the audit trail undermines enforceability.
  • Omitting required state-specific disclosures or bar-mandated language risks ethics complaints or fee reductions.

Potential consequences of an incorrect or incomplete agreement

Unenforceability: Court may refuse to enforce fee terms
Ethics violation: Bar discipline for noncompliant disclosures
Fee disputes: Client may seek fee reduction or arbitration
Tax issues: Incorrect 1099 reporting or withholding
Delay in payout: Settlement distribution postponed
Reputational harm: Loss of client trust and referrals

Selected eSignature vendor comparison for executing contingent fee agreements

Compare baseline pricing and a few key capabilities relevant to legal agreements; signNow is listed first for parity in the comparison.

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Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Practical examples of contingent fee agreements in common matters

These scenarios illustrate how typical agreements allocate fees and expenses in real-world cases.

Personal Injury Matter

A plaintiff hires counsel on a one-third contingency to pursue injury damages.

  • The firm advances litigation costs and deducts them from recovery.
  • The agreement requires client approval for settlements, provides an itemized closing statement, and sets payment within 30 days of distribution.

Employment Dispute

An employee retains counsel on a sliding contingency tied to settlement thresholds.

  • The contract specifies net-versus-gross calculations and fee splits with referral counsel.
  • The signed agreement documents expense handling, settlement approval, and reporting necessary for tax and client accounting.

Frequently asked questions about contingent fee agreements and execution

Answers to common legal and practical questions when preparing, signing, and storing contingent fee agreements.


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