Most liability lawyers work on contingency. They get a percentage of the money you recover instead of charging by the hour. The percentage is the first number you see, but it is not the only number that matters. The fee agreement controls how your settlement or verdict gets divided. If you do not understand it, you can lose thousands even when you win.
Start with the percentage. A common split is one-third if the case settles before a lawsuit is filed and a larger share if it goes to trial. Some agreements jump to 40 percent as soon as the lawyer files a complaint. Others wait until trial starts. Others increase again for an appeal. You need to know the exact event that triggers the higher fee. Filed is not the same as settled, trial, or appeal. Get the trigger in plain words.
Then look at costs. Costs are the expenses of building the case. They include filing fees, records, experts, investigators, and mediation. The fee agreement must say who pays those costs and when. The difference between costs off the top and costs from your share is huge. Suppose you settle for $100,000. The fee is one-third, and costs are $10,000. If costs come off the top, the lawyer takes one-third of $90,000, or $30,000, and you get $60,000. If the lawyer takes one-third of $100,000 and you pay costs, the lawyer gets $33,333, costs take $10,000, and you get $56,667. Same case, different result.
Ask whether costs are deducted before or after the fee. Ask if there is a cap on costs. Ask if you must approve any single expense over a certain amount. Ask what happens if you lose. Many contingency agreements say you owe nothing if there is no recovery. Some say you may still owe costs. Read that section slowly. If the lawyer advances costs, the agreement may give the lawyer the right to repay those costs out of the recovery before splitting the rest. That is common, but it must be clear.
Medical liens are another major piece. After a liability case, health insurers, hospitals, Medicare, Medicaid, and doctors may claim part of your recovery. The fee agreement should explain who handles those liens. It should say whether lien negotiation is included in the fee or charged separately. It should also say whether the lawyer can pay liens without your approval. Do not assume a lien will disappear. Do not assume the lawyer will reduce it. Get the process in writing.
Watch for changes in the fee. The agreement may raise the percentage if the case goes to arbitration, trial, or appeal. It may add a separate fee for collecting a judgment. It may allow the lawyer to bring in another lawyer and split the fee. That can be fine, but you should know it. If two firms work on the case, you may pay two percentages or one combined percentage. The contract should state the total fee you pay, not just each lawyer’s share.
If the lawyer charges by the hour instead of a contingency, the review changes. You need an hourly rate for each lawyer and staff member. You need to know how often you will get bills. You need to know whether the retainer is replenished and when. You need to know who pays costs. You need a written estimate, even if it is only a range. Hourly cases can drain you if the lawyer does not communicate.
Do not sign on the first meeting. Take the agreement home. Read it once for the money. Read it again for the endings. What happens if you fire the lawyer? What happens if the lawyer quits? What happens if you settle early? What happens if you get no money? What happens if you die? These clauses decide real outcomes. If a term is blank, do not sign. If a promise is only verbal, do not trust it. If the lawyer will not explain the deal in plain language, find another lawyer.
A fee agreement is a business contract. The lawyer may be on your side, but the contract still controls the money. Understand the percentage, the costs, the liens, the triggers, and the exit rules. Ask until every number makes sense. That is how you protect your recovery before the case even starts.
