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Litigation Contingency Agreement

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LITIGATION CONTINGENCY AGREEMENT

This Litigation Contingency Agreement ("Agreement") is made effective as of between Client Name: with primary address ("Client"), and Counsel Name: of Firm: with business address ("Counsel").

RECITALS

WHEREAS, Client has retained Counsel to provide legal representation in the matter identified as Case Name: , pending in , Case No. ;

WHEREAS, Client desires to engage Counsel on a contingency-fee basis under the terms set forth herein, and Counsel is willing to accept such engagement subject to the terms and conditions of this Agreement.

WHEREAS, the parties intend that Counsel's compensation be contingent upon the successful recovery of monies or other benefits on behalf of Client.

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 retains Counsel to prosecute and/or defend the case identified above and to take such actions as Counsel deems reasonably necessary to pursue Client's claims or defenses through trial, appeal, or settlement, subject to the terms of this Agreement.

1.2 Scope Limitations. Unless otherwise agreed in writing, Counsel's representation under this Agreement is limited to the litigation and pre-litigation activities reasonably related to the identified matter. Counsel is not retained for unrelated matters, collection efforts after judgment, tax advice regarding recovery, or post-judgment enforcement except by separate agreement.

2. CONTINGENCY FEE

2.1 Fee Percentage. Client agrees to pay Counsel a contingency fee equal to of the gross monetary recovery obtained by judgment, settlement, or otherwise (the "Fee"). Gross monetary recovery shall include any amounts paid for damages, settlement proceeds, and any cash equivalent of non-monetary relief.

2.2 Allocation. The Fee shall be calculated before reduction for costs and expenses unless the parties specify otherwise in writing. In the event Counsel secures recovery by settlement in which portions are allocated to non-monetary relief, Counsel and Client shall negotiate a reasonable allocation consistent with counsel's ethical obligations.

3. COSTS AND EXPENSES

3.1 Responsibility. Client shall be responsible for all reasonable litigation costs and expenses incurred in connection with the representation, including but not limited to filing fees, service of process, expert fees, deposition costs, travel, copying, and court reporter charges ("Costs"). Counsel may advance Costs on Client's behalf; advanced Costs are reimbursable from any recovery.

4. SETTLEMENT AUTHORITY

4.1 Client Approval Required. Counsel shall not settle, discontinue, or dismiss the action without Client's informed consent for any settlement that includes monetary relief exceeding . For settlements below that amount Counsel shall notify Client and receive express authorization prior to concluding the settlement.

4.2 Allocation of Recovery. Counsel shall provide Client a written statement of proposed allocation of any settlement proceeds among attorneys' fees, costs, and amounts payable to Client before disbursement.

5. WITHDRAWAL AND TERMINATION

5.1 Withdrawal for Cause. Counsel may withdraw from representation for good cause as permitted by applicable rules of professional conduct, including Client's material breach of this Agreement, failure to cooperate, or if Counsel reasonably concludes continued representation would violate an ethical rule.

5.2 Effect of Termination. If Counsel withdraws or is discharged for reasons other than Counsel's material breach, Counsel shall be entitled to compensation for work performed on a quantum meruit basis and reimbursement of advanced Costs from any subsequent recovery or as otherwise ordered by a court.

6. ACCOUNTING; DISBURSEMENT

6.1 Accounting. Upon conclusion of the matter or upon request, Counsel shall provide Client a written statement describing gross recovery, deduction of Costs, the Fee calculation, and the net amount payable to Client.

6.2 Priority Disbursement. Disbursement of recoveries shall follow this order: payment of liens and statutory obligations, reimbursement of advanced Costs, payment of the Fee, and payment of the remainder to Client, unless otherwise ordered by a court or agreed in writing.

7. CONFLICTS; CONFIDENTIALITY

7.1 Conflicts. Counsel represents that, to the best of Counsel's knowledge, no conflict of interest exists that would preclude Counsel from representing Client in this matter. Counsel will promptly disclose any conflict that arises.

7.2 Confidentiality. Counsel shall maintain the confidentiality of Client communications as required by law and professional standards. Client authorizes Counsel to disclose confidential information to third parties when necessary to prosecute the claim, subject to Client's prior approval where feasible.

8. NOTICES

Any notice or communication required or permitted under this Agreement shall be in writing and delivered to the addresses below. Notices are effective upon personal delivery, three days after deposit in the United States mail, return receipt requested, or upon confirmed electronic transmission when sent to the addresses provided.

9. AMENDMENTS; WAIVER; COUNTERPARTS

9.1 Amendments. This Agreement may be amended only by a written instrument signed by both parties.

9.2 Waiver. No waiver of any breach shall be effective unless in writing signed by the waiving party. A waiver of one breach shall not constitute a waiver of any other breach.

9.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures transmitted by electronic means shall have the same force and effect as original signatures.

10. GOVERNING LAW; SEVERABILITY; ENTIRE AGREEMENT

10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of without regard to conflict of laws principles.

10.2 Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of the Agreement shall continue in full force and effect and the offending provision shall be reformed to the minimum extent necessary to make it enforceable.

10.3 Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter herein and supersedes all prior agreements, understandings, and representations, whether written or oral.

11. MISCELLANEOUS PROVISIONS

11.1 Client Cooperation. Client agrees to cooperate fully with Counsel, to provide all information and documents relevant to the matter, and to attend proceedings as reasonably required.

11.2 Lien Acknowledgment. Client acknowledges that Counsel may assert a charging lien or retain a possessory lien for fees and costs against any judgment or settlement proceeds to the extent permitted by applicable law.

By signing below, the parties acknowledge that they have read and understood this Agreement, that they are authorized to enter into it, and that they accept its terms.

Client:

By:

Date:

Counsel:

By:

Date:

Enter text✕

What a Litigation Contingency Agreement Is and when parties use it

A Litigation Contingency Agreement is a written contract between a client and an attorney or law firm describing fee arrangements, responsibilities, and the conditions under which the attorney will pursue litigation on the client's behalf. It typically addresses contingency fees, allocation of costs, triggers for fee payment, client cooperation obligations, and how recoveries are divided. Parties use this agreement to set expectations before litigation or claims are filed and to document consent to recoverable expenses, fee percentages, and procedures for settlement, appeal, or termination of representation.

Why this agreement matters to clients and counsel

A clear Litigation Contingency Agreement reduces disputes about fees, formalizes who pays costs, aligns incentives, and documents consent to key litigation decisions. It protects both client and attorney by spelling out timelines, settlement approval processes, and post-recovery accounting in an enforceable contract.

Why this agreement matters to clients and counsel

Who prepares and who signs a Litigation Contingency Agreement

Typical preparers include plaintiff-side attorneys or law firms, claims managers, and in-house counsel arranging outside counsel representation.

  • Plaintiffs and claimants who seek representation without paying hourly fees up front, relying on recovery to cover costs and attorney compensation.
  • Outside counsel and law firms who need written authorization for contingency fee calculations, expense advances, and settlement authority limits.
  • Insurance claims departments and third-party funders that require explicit allocation terms and subrogation or lien provisions.

Use the agreement to document mutual expectations before work begins and preserve enforceable evidence of consent to fee and cost terms.

Typical signer profiles

Client / Plaintiff

An individual or corporate claimant who signs to authorize representation on contingency. The client must confirm identity, provide accurate legal name, and explicitly consent to fee percentages and cost advancement terms.

Attorney / Firm

The law firm or attorney executing on the contingency basis who confirms scope, fee calculation method, and authority limits. The signing attorney should include state bar details and a statement of retained powers for settlement or appeal.

Core elements to include in a professional agreement

A robust Litigation Contingency Agreement balances clarity on fees, costs, client duties, and dispute resolution while remaining compliant with ethical and statutory rules.

Fee Percentage

Specify the contingency fee calculation method (sliding scale, single percentage, or tiered based on recovery stage), whether gross or net recovery is used, and how attorney fees are apportioned among co-counsel.

Expense Allocation

Define which litigation costs the client must reimburse (filing fees, expert fees, deposition costs), whether advances are refundable, and how costs are deducted from recovery before or after fees.

Settlement Authority

State whether the attorney may settle and under what dollar threshold, whether client consent is required for specific settlement types, and procedures for presenting settlement offers and obtaining approval.

Duration & Termination

Describe the agreement term, grounds for unilateral termination by either party, consequences of withdrawal, and how fees and costs are calculated if representation ends early.

Conflicts & Ethics

Include attorney conflict disclosures, duty of loyalty, fee reasonableness statement per state bar rules, and a statement on referral fees or fee sharing with other counsel.

Dispute Resolution

Set governing law, venue, and whether arbitration or mediation is required for fee disputes; include procedures for accounting and review of post-recovery statements.

Step-by-step: prepare and finalize the agreement

Follow these sequential steps to create, review, and execute a Litigation Contingency Agreement accurately and defensibly.

  • 01
    Draft core terms: Define fee, costs, and authority.
  • 02
    Client review: Provide plain-language summary and allow questions.
  • 03
    Attorney disclosures: Attach conflict and ethics statements.
  • 04
    Execution: Sign, date, and distribute executed copies.

How to configure the agreement in an e-sign workflow

Configure fields and signer order to match the agreement’s execution requirements when using an e-sign platform or document management system.

Field Configuration
Signature Block Assign to client and attorney, require date field.
Initials Place initial fields on critical clauses to confirm consent.
Supporting Attachments Require upload of ID or entity documents where needed.
Authentication Use email link plus optional SMS code for signer verification.

Where to send or lodge the executed agreement

Decide how and where executed copies should be routed to preserve evidence and ensure internal compliance.

  • Client Records: Store final PDF in client matter folder.
  • Attorney File: Add to the firm conflict and billing system.
  • Third-Party: Provide copy to insurers or funders if required.
  • Court: File only if court requires retained fee agreement.

Digital signing and technical requirements

Use an e-sign platform that supports secure authentication, a tamper-evident audit trail, and PDF export for retention.

  • Authentication Options: Email, SMS, or higher assurance
  • File Formats: PDF, DOCX supported
  • Integrations: Connects to document storage

Ensure the platform meets legal and client privacy needs; consider HIPAA or state-specific data protections when health or sensitive information is involved.

Key timing considerations and deadlines

Track dates that affect fees, statute of limitations, client consent windows, and expense reimbursement to avoid forfeiture or disputes.

Effective Date Entry:

Document when representation begins; affects limitation periods.

Settlement Approval Window:

Specify client response period for settlement offers.

Billing Intervals:

State periodic accounting timing for recoveries and costs.

Termination Notice:

Define notice period for unilateral termination.

Record Retention Start:

Start retention timeline from effective date or closing.

Common preparation errors to avoid

  • Failing to state whether fees apply to gross or net recovery can create significant post-recovery disputes and client challenges.
  • Leaving settlement authority unspecified increases the risk of unauthorized settlements or later fee disputes between client and counsel.
  • Vague cost definitions that omit litigation-specific expenses (experts, ESI collection) can lead to unexpected client reimbursement obligations.
  • Not obtaining clear written consent for contingency terms or failing to attach required state bar disclosures risks fee challenges or disciplinary review.

Consequences of incorrect or incomplete agreements

Fee Forfeiture: May occur if rules violated.
Ethics Sanctions: State bar discipline possible.
Tax Reporting: Incorrect 1099 treatment triggers penalties.
Client Litigation: Client may sue for malpractice or fee refund.
Court Sanctions: Sanctions for misstatements in filings.
Enforceability Risk: Ambiguity can make terms voidable.

Supporting documents and export options to attach

Assemble exhibits and export signed copies to common formats for storage and sharing with stakeholders.

Client ID

Attach government-issued ID or entity formation documents to confirm signer identity and mitigate later signature disputes; store as a PDF copy in the matter file.

Disclosure Addenda

Include state bar fee disclosure forms and plain-English summaries so clients can affirm informed consent; export as PDF for recordkeeping.

Billing Worksheet

Provide a sample cost accounting worksheet or settlement allocation exhibit to document how fees and costs will be applied to recoveries.

Signed PDF Export

Save the fully executed agreement as a vaulted PDF/A file that includes an audit trail, timestamps, and signer attribution for evidentiary use.

Sample eSignature vendor comparison for executing agreements

Basic vendor comparison focused on price, trial options, bulk send, audit trail, HIPAA compliance, and envelope or usage limits to aid platform selection for executing this agreement.

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 (Business Premium) Plan-dependent Plan-dependent Plan-dependent Plan-dependent
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No envelope cap 100 envelopes/user/year Plan-dependent Plan-dependent Plan-dependent

Real-world implementation examples from practitioners

Two concise examples show how organizations used e-sign and documented contingency terms to streamline litigation intake and execution.

Optica Ventures LLC

The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

  • The point: reduced execution friction for clients signing contingency agreements.
  • Outcome: faster intake, clearer fee records, and fewer pre-litigation disputes over terms, improving client satisfaction and billing transparency.

BIS

We felt most comfortable with airSlate SignNow given their SOC 2 certification and strict focus on ESIGN and UETA act compliance.

  • The point: leveraging compliant e-sign reduced archival risk.
  • Outcome: consistent audit trails, secure storage of client-signed contingency agreements, and defensible records for fee disputes or court review.

Practical tips for accurate and efficient completion

Follow these best practices to reduce ambiguity, speed execution, and strengthen enforceability of contingency agreements.

Use precise fee language
State whether fees apply to gross or net recovery, include exact percentage tiers, and provide numeric examples illustrating how fees and costs will be calculated.
Attach standardized exhibits
Include billing worksheets, cost definitions, and settlement authorization templates as exhibits so interpretation is consistent across matters and reviewers.
Confirm signer identity
Use authenticated e-sign methods or notarization when appropriate; record ID evidence to reduce later disputes about who authorized the agreement.
Maintain an auditable trail
Export signed agreements as PDF/A with embedded audit logs, retain metadata, and index documents in the client matter system for quick retrieval.

Frequently asked questions about Litigation Contingency Agreements

Answers to common legal and practical questions about drafting, executing, and enforcing contingency fee agreements.


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