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Litigation Contingency Fee Agreement

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LITIGATION CONTINGENCY FEE AGREEMENT

This Litigation Contingency Fee Agreement (the "Agreement") is entered into on by and between Client Name: with address (hereinafter "Client"), and Attorney/Firm Name: with address (hereinafter "Attorney").

RECITALS

WHEREAS, Client desires to retain Attorney to prosecute or defend the legal claim described as: in under Case Number: .

WHEREAS, Attorney is experienced in litigation and agrees to represent Client on a contingency fee basis subject to the terms and conditions set forth herein; and

WHEREAS, the parties desire to set forth their respective rights and obligations in writing.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. ENGAGEMENT; SCOPE OF REPRESENTATION

1.1 Engagement. Client hereby retains Attorney, and Attorney accepts such engagement, to represent Client in the litigation matter described above and in any appeals or related proceedings only as expressly agreed in writing. Attorney's duties shall be limited to the specific claim(s) identified and any agreed follow-on matters.

1.2 Scope. Attorney will exercise professional judgment in conducting the litigation, including filing pleadings, conducting discovery, engaging in settlement negotiations, and appearing at hearings and trial. Attorney shall keep Client reasonably informed and consult with Client on major litigation decisions including settlement offers.

2. CONTINGENCY FEE

2.1 Fee Calculation. In the event of any monetary recovery by judgment, settlement, arbitration award, or otherwise, Attorney shall be entitled to a contingency fee computed on the gross recovery as follows:
- If case is resolved prior to filing suit:
- If case is resolved after filing but prior to trial:
- If case is resolved after trial or judgment:
- If recovery is obtained by appeal: .

2.2 Gross Recovery. "Gross recovery" means the total amount actually recovered before deduction for Attorney's fees, costs, liens, or any other encumbrances, excluding any portion attributable to interest unless otherwise agreed in writing.

3. COSTS AND EXPENSES

3.1 Advances. Attorney may advance or incur reasonable costs and expenses necessary to prosecute the matter, including filing fees, expert fees, deposition costs, travel, copying, and other customary expenses. Such costs shall be separate from and in addition to Attorney's contingency fee.

3.2 Repayment. All advanced costs and expenses shall be reimbursed to Attorney from the gross recovery prior to distribution to Client, except as otherwise ordered by a tribunal. If there is no recovery, Client shall not be personally obligated to repay Attorney for such advanced costs and expenses unless otherwise agreed in writing or where Client terminates this Agreement without cause and the Tribunal so orders.

4. SETTLEMENT; CLIENT AUTHORITY

4.1 Client Approval. Attorney shall timely advise Client of settlement offers. No settlement that materially affects Client's substantive rights or requires a release of claims shall be made without Client's informed written authorization. Attorney may, however, accept nominal administrative concessions consistent with Attorney's professional judgment when written consent is impracticable.

4.2 Distribution Upon Settlement. Attorney shall deduct the contingency fee and reimburse advanced costs and expenses from the gross recovery, provide Client with a written accounting, and timely distribute remaining net recovery to Client subject to any liens or offsetting obligations of Client as permitted by law.

5. TERMINATION AND WITHDRAWAL

5.1 Termination by Client. Client may terminate Attorney's representation at any time upon written notice. In the event of termination, Attorney shall be entitled to compensation based on the reasonable value of services rendered and to reimbursement of costs and expenses advanced, which may be subject to a quantum meruit claim or a court-approved charging lien if recovery results from Attorney's efforts.

5.2 Withdrawal by Attorney. Attorney may withdraw for good cause, including noncooperation by Client, conflict of interest, or ethical reasons, subject to obtaining tribal, state, or federal court approval where required. Attorney will take reasonable steps to avoid foreseeable prejudice to Client, including giving reasonable notice and assisting in the transfer of the matter.

6. ATTORNEY'S LIEN AND SETOFF

6.1 Charging Lien. Attorney shall have a charging lien upon any judgment, settlement proceeds, or other recovery obtained on behalf of Client to secure payment of fees and costs earned or advanced under this Agreement to the extent permitted by applicable law.

6.2 Setoff. Attorney may retain funds in Attorney's possession representing Client's recovery until Attorney's fee and costs have been satisfied and a final accounting provided to Client.

7. REPRESENTATIONS AND WARRANTIES

Client represents that all material facts provided to Attorney are true and that Client has authority to enter into this Agreement. Client warrants that there are no prior agreements that would impair Attorney's ability to perform under this Agreement or result in conflicts of interest unless disclosed in writing to Attorney.

8. ACCOUNTING; TAXES

Attorney shall provide Client with a written statement accounting for the gross recovery, Attorney's fee, costs and expenses, liens, and the net balance payable to Client. Client acknowledges that any tax consequences of recovery are Client's responsibility and that Attorney is not responsible for Client's tax liabilities.

9. CONFIDENTIALITY

Attorney shall maintain confidentiality of Client information as required by applicable rules of professional conduct, except to the extent disclosure is authorized by Client, required by law, or necessary to the representation.

10. NO GUARANTEE

Client acknowledges that Attorney has made no promises or guarantees regarding the outcome of the litigation and that any expressions regarding likely outcomes are opinions only.

11. NOTICES

All notices or communications required or permitted under this Agreement shall be in writing and delivered to the addresses set forth above or to such other address as either party may designate by written notice. Notices shall be deemed given when delivered personally, sent by nationally recognized overnight courier, or sent by certified mail return receipt requested.

12. AMENDMENTS; WAIVER; COUNTERPARTS

This Agreement may be amended only by a written instrument signed by both parties. No waiver by either party of a breach shall constitute a waiver of any other or subsequent breach. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

13. GOVERNING LAW; SEVERABILITY; ENTIRE AGREEMENT

13.1 Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the state of , without regard to conflicts of law principles.

13.2 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

13.3 Entire Agreement. This Agreement contains the entire agreement between the parties regarding the subject matter hereof and supersedes all prior oral or written agreements and understandings.

14. MISCELLANEOUS PROVISIONS

14.1 No Assignment. Client shall not assign any rights under this Agreement without Attorney's prior written consent. Attorney may assign the fee rights hereunder to a successor firm only to the extent permitted by applicable professional rules.

14.2 Cooperation. Client agrees to cooperate fully with Attorney, to provide truthful information, to appear for proceedings as required, and to preserve documents and evidence relevant to the matter.

15. SPECIAL PROVISIONS

ACKNOWLEDGMENT

Client acknowledges that Client has read and understands this Agreement, has had the opportunity to ask questions, and enters into this Agreement voluntarily. Client further acknowledges receipt of a duplicate executed copy upon request.

Client

Printed Name:

Signature:

Date:

Attorney/Firm

Printed Name:

By:

Date:

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What a Litigation Contingency Fee Agreement Is

A Litigation Contingency Fee Agreement is a written contract between a client and an attorney that sets the attorney's fee as a percentage of any recovery rather than an hourly rate. It describes scope of representation, fee percentage or sliding scale, costs and expenses allocation, client and attorney duties, and termination rights. In the United States these agreements must meet ethical and consumer-protection requirements and are commonly required in personal injury, wrongful death, and certain commercial claims; proper execution helps avoid later fee disputes and disciplinary risk.

Why a Clear Contingency Agreement Matters

A written contingency agreement creates predictable expectations for both client and counsel, documents consent to an electronic signature where permitted (ESIGN Act and state UETA rules), and reduces the risk of fee disputes and bar complaints while preserving the attorney’s right to recover costs and fees.

Why a Clear Contingency Agreement Matters

Who Typically Signs a Contingency Fee Agreement

Standard signers include the retained attorney or law firm and the client (individual or corporate representative).

  • Individual clients who have suffered personal injury or consumer harm, often represented by a named plaintiff or guardian
  • Corporations or small businesses pursuing commercial litigation, signed by an authorized officer
  • Law firms or solo practitioners acting through a named partner or authorized associate

Ensure the signer has authority to bind the represented party and that any required power-of-attorney or corporate resolution is attached before execution.

Core Elements to Include in Every Agreement

A professional Litigation Contingency Fee Agreement should be precise about fee calculation, costs allocation, client approval rights, settlement authority, conflict disclosures, and termination provisions to comply with ethical rules and to make enforcement straightforward.

Fee Percentage

Specify the exact percentage or tiered percentages for recovery stages (settlement, judgment, appeal) and how fees are computed.

Costs & Expenses

State whether costs (filing fees, expert fees, deposition costs) are advanced by the firm and when they are recoverable from proceeds.

Scope of Work

Define the claims and litigation phases covered (trial, appeal) and any excluded matters requiring separate agreement.

Settlement Authority

Clarify who can accept settlement offers and whether client consent is required for defined thresholds.

Termination Rights

Describe withdrawal, client termination, and how fees/costs are calculated on early termination.

Conflict & Disclosures

Include conflict waivers, referrals, and any division of fees with other counsel as required by bar rules.

Step-by-Step: Completing the Agreement

Follow these steps to prepare, review, and execute a litigation contingency fee agreement that meets ethical and practical standards.

  • 01
    Draft Terms: Populate parties, fee percentage, and costs language precisely.
  • 02
    Client Review: Provide the client a copy and explain fee mechanics and withdrawal consequences.
  • 03
    Obtain Consent: Get the client’s written signature and date; confirm identity.
  • 04
    File & Retain: Store the executed agreement in the client file and document delivery to the client.

Typical Workflow from Engagement to Settlement

A consistent signing and retention workflow reduces disputes and proof problems later in collection or ethics inquiries.

  • Engagement: Create the agreement and attach matter-specific exhibits such as fee-splitting or referral terms.
  • Execution: Collect signatures (wet or electronic where permitted) and confirm client identity.
  • Service & Filing: Provide the client an executed copy and file counsel’s copy in the matter record.
  • Post-Resolution: Calculate net recovery, deduct costs per agreement, and distribute proceeds with accounting.

Digital Workflow Settings for Online Completion

When using an eSignature platform, configure fields and authentication to meet the four-part ESIGN test and any state bar guidance.

Field Configuration
Signature Field Required; date-stamped; optional signer name auto-filled
Authentication Email + SMS code or ID verification for higher-assurance signers
Routing Order Sequential if firm signs first, then client; set reminders
Audit Trail Enable IP, timestamp, and download history retention

Technical Considerations for eSigning and Storage

Select a platform that supports secure e-signature capture, audit trails, and the integrations your firm uses.

  • Integrations: Support for Salesforce, NetSuite, Microsoft 365, Google Workspace and cloud storage systems
  • File Formats: Accepts PDF and DOCX; outputs signed PDF with certificate
  • Authentication Options: Email, SMS, KBA, or ID verification as required

Preserve a tamper-evident copy and audit trail to demonstrate consent, attribution, and retention consistent with ESIGN and state rules.

Key Timing Considerations

Track execution dates and procedural deadlines; some consequences flow from when the agreement was signed or when a settlement is accepted.

Execute Before Substantial Work:

Obtain client signature before major litigation milestones when possible.

Deliver Executed Copy:

Give the client a signed copy promptly after signing; document delivery date.

Settlement Calculation:

Compute fees immediately upon settlement approval and issue client accounting.

Statute of Limitations:

Confirm effective date does not adversely affect preservation of claims.

Bar Reporting Timelines:

Allow time for internal review if a fee-splitting disclosure or court approval is required.

Common Preparation Errors to Avoid

  • Using vague fee language that leaves ambiguity about what constitutes 'recovery' or how expenses are repaid
  • Failing to specify whether the fee is calculated before or after deduction of costs, causing accounting disputes
  • Not obtaining a signed, dated agreement before significant work begins or before settlement authority is granted
  • Neglecting to document client consent for fee divisions, referrals, or nonstandard settlement authority

Legal and Ethical Risks of a Deficient Agreement

Disciplinary Action: State bar sanctions for violations of fee disclosure rules
Fee Forfeiture: Court-ordered reduction or disgorgement of attorney fees
Client Litigation: Breach-of-contract or malpractice claims by client
Collection Difficulty: Inability to enforce fee without clear written agreement
Statute Issues: Missed or shortened limitation periods if effective date mishandled
Reputational Harm: Negative findings on ethics exams and reporting

Security and Compliance Checklist

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Audit Trail: IP, timestamp, and action log retained
HIPAA: Breach protection available with BAA
ESIGN/UETA: Meets intent, consent, attribution, retention test
21 CFR Part 11: Capabilities for FDA-regulated records
SOC/ISO: SOC 2 Type II and ISO 27001 controls available

eSignature Pricing Comparison (signNow listed first)

Compare common pricing and capability criteria for eSignature platforms used to execute legal agreements; signNow appears first to reflect available plan tiers and usage models.

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 No trial No trial Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Illustrative Use Cases

Two concise scenarios show how contingency agreements are used in practice across common matter types.

Small Personal Injury Firm

A sole-practitioner drafts a 33.3% contingency for settlement and 40% for appeal to cover additional risk.

  • The agreement names specific costs to be advanced.
  • The clear tiered language reduces later disputes and provides a documented client accounting process at resolution.

Lead Counsel in Class Action

Lead counsel sets a common-fund contingency mechanism and describes allocation for common-benefit tasks.

  • Court approval clause included.
  • Transparent fee-allocation and notice provisions facilitate court review and reduce objections at the fairness hearing.

Frequently Asked Questions and Practical Answers

Answers to common questions about enforceability, electronic signatures, fee calculations, and what to do if a dispute arises.


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