--- title: How to Determine a Lawyer Contingency Fee Average for Your Firm description: What should your law firm charge as a contingency fee percentage? Learn how to determine lawyer contingency fee average for your law firm in this article. image: https://www.altfeeco.com/hubfs/lawyer%20contingency%20fee%20average.jpg --- [AltFee Wins the 2026 Clio Integration Award for **Best Business of Law App**](https://www.altfeeco.com/resources/in-the-news-altfee-wins-the-2026-clio-integration-awards) [![](https://www.altfeeco.com/hubfs/AltFee-Logo.svg)](https://www.altfeeco.com/) [Product](https://www.altfeeco.com/product) ### Understand Your Past [![history-icon-firefly](https://www.altfeeco.com/hubfs/Icons/Pricing_Pg/history-icon-firefly.svg) **Legal Pricing Intelligence** Transform years of historical billing data into actionable insights on profitability, efficiency, realization, collections, and pricing opportunities. 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For some, it might seem odd that a lawyer would be willing to take a case, including all the work involved, without 100% guaranteed payment. It seems risky, but as they say, the greater the risk, the greater the reward. At least in some cases. When a lawyer offers a [contingency fee](https://www.altfeeco.com/resources/contingency-fee) as a payment option, they get the following benefits: - **More clients**. Since contingency fees increase access to justice by not requiring the client to have the funds upfront to pay typical legal fees, the lawyer automatically makes their services more accessible to more clients. - **Potential for a higher payout**. The client may not have the money to pay the lawyer’s typical legal fees, but even a small percentage of a verdict worth millions will probably yield more for the lawyer anyway. - **Ability to offer more pricing options for clients**. Increasing access to justice is one part of it, but offering more options for clients to pay their legal fees showcases good service. In some cases, the client may end up paying a bit more if they go with a contingency fee, but since the lawyer is assuming all of the risk and the client gets the benefit of having their legal issue taken care of, they may not mind. But at the end of the day, the lawyer has to draw from their experience and intuition to determine whether the risk of taking a case on a contingency fee arrangement is worth it. After all, if the case isn’t successful, then the lawyer doesn’t get paid. They also have to carefully consider each case and ensure that the percentage they’re charging is fair for them and the client they represent. In this article, we’ll explore more about contingency fees and how they work and give you tips on how you can set your own lawyer contingency fee average for your [value-based pricing](https://www.altfeeco.com/resources/value-based-pricing) law firm. Let’s get started! ## What are Law Firm Contingency Fees? In a nutshell, **a contingency fee is when a fee is paid to a lawyer if a case is successful**. The definition of success and the exact amount that’s paid to the lawyer is determined in advance via negotiations between a lawyer and their client. The law firm doesn’t set a contingency fee for each lawyer, but it may be part of their [law firm pricing](https://www.altfeeco.com/resources/law-firm-pricing) strategy. A contingency fee is set on a case-by-case basis by each individual lawyer. In other words, the lawyer will look at the information surrounding a case and first determine whether a contingency fee is appropriate, then specify a fair percentage based on the risk involved with the case and who is responsible for paying litigation costs (lawyer or client). Types of cases where contingency fees are standard are outlined in the table below: | **Type of case where contingency fees are common** | **Example(s)** | | --- | --- | | Personal injury | Vehicle accidents, slips and falls due to negligence | | Medical malpractice | Botched surgery or other medical procedure leading to patient harm | | Insurance claims | A client aiming to collect funds from an insurance claim they feel should have been covered | | Breach of contract | When two or more parties enter into a contract, but one or more of those parties don’t uphold their part of the contract, causing the remaining party or parties to seek compensation | | Condemnation | Conflict between government and a private landowner in claiming their property for public use | ### Contingency Fee Benefits and Criticisms A contingency fee seems like a good deal for the client, right? Well, [some agree, but others have concerns](https://www.law.cornell.edu/wex/contingency_fee). Some recognize that contingency fees are good because they increase access to justice for clients who would otherwise not be able to afford legal counsel. Setting a contingency fee for a case also further incentivizes the lawyer to win a case. But on the other hand, critics point out that the amount of risk that the lawyer is assuming is too little compared to the high lawyer contingency fee average that they usually take, which is typically [33% or ⅓](https://www.nolo.com/legal-encyclopedia/what-is-a-contingency-fee.html). Other criticisms include settling cases too soon for too little and encouraging too many frivolous suits because they’re easy to win and lawyers gain a significant percentage of the payout. But really, if the lawyer carefully examines the facts of each case and comes up with a fair percentage that accurately reflects the risk they are taking, and allows the client to receive fair compensation, then using contingency fees *does* increase access to justice. ## How is a Typical Contingency Fee for Lawyers Calculated? Calculating a fair contingency fee for lawyers requires a careful look at [several factors](https://www.nolo.com/legal-encyclopedia/what-is-a-contingency-fee.html), including: 1. **The risk and complexity of a case**. Cases with more risk should also come with more rewards, so a lawyer should take a higher percentage of the recovery earned from a successful case. 2. **Litigation costs and who is responsible for them**. As with any case, there will be additional costs associated with filing, discovery (research), witness costs, evidence costs, and overhead (copying and scanning of documents, postage, etc.). These costs can quickly add up, and for a lawyer who is forking over the funds upfront, it means they are likely to take a higher percentage of the funds earned from a successful case to cover these costs, especially if the case is complex. 3. **State and federal laws surrounding legal fees**. The ABA presents a [blanket set of standards regarding fees](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_5_fees/) of any kind, with best practices encompassing fairness, reasonable compensation, and avoiding things like conflict of interest or other factors that may compromise the integrity of the lawyer-client relationship. That said, the most common lawyer contingency fee average ends up being 33%, or ⅓ of the total earnings of a case, but can go up to [40%](https://www.alllaw.com/articles/nolo/personal-injury/lawyers-fees.html) (in some jurisdictions) as the complexity and risk involved in taking the case increases. Of course, different states will have different rules regarding caps and when and how contingency fees can be paid out to the lawyer. For example, the Florida Supreme Court dictates how these fees will work for personal injury cases (the most common type of case where contingency fees are used). The main way that payout for contingency fees is determined in Florida, at least on a basic level, hinges on [two main factors](https://mykramerlawfirm.com/personal-injury-law/how-contingency-fees-work/#:~:text=After%20Filing%20an%20Answer%3A&text=The%20plaintiff's%20attorney%20may%20accept,by%20the%20Florida%20Supreme%20Court.): 1. The amount of the proposed lawsuit (over or under $1 million) 2. Whether the lawsuit settles before or after the defendant answers the complaint (the defendant has 20 days to answer) If the case settles before the defendant answers, then a fee cap of 33% (or ⅓) is placed on the settlement up to $1 million. If the settlement exceeds $1 million, then the cap is reduced in increments of 10% per million. If the defendant answers within the 20-day period or the case goes to trial and is successful in favor of the injured, then the cap changes even more: - The plaintiff's lawyer can accept up to 40% of the total earnings from the case, up to $1 million - If the settlement is more than $1 million, then the Florida Supreme Court decides the percentage increments that the lawyer is paid, thus affecting the total amount that the lawyer receives in the end In New York, contingency fees always cap at 33% or ⅓. From there, the client and lawyer's amount hinges on what they negotiate [regarding responsibility for disbursements and expenses](https://www.centralnewyorkinjurylawyer.com/how-does-the-personal-injury-contingency-fee-work-in-new-york/#:~:text=The%20contingency%20fee%20allowed%20in,and%20in%20medical%20malpractice%20cases.). There are basically two options here. The first is that the client agrees to reimburse the lawyer for disbursements and expenses in exchange for a lower contingency fee percentage. The risk here falls to the client, as they are responsible for reimbursing the lawyer regardless of the case outcome. But if the case is won, then the client gets a bigger payout. The second is basically the opposite. The lawyer assumes all the risk, including being liable for expenses and disbursements. Of course, as a result, the lawyer will take a higher contingency fee. As you can see, the amount of money that a lawyer and a client receive from a contingency fee case can vary quite a bit depending on the state where the case is conducted. Taking all possible factors into account, then assigning a fair contingency fee percentage is the way to go. ## Tips to Determine Firm Contingency Fees ![Tips to Determine Firm Contingency Fees](https://lh3.googleusercontent.com/DHl0fdlws9OP9dq-mAYIhEAejOSYSXBvDAlSjvRQ1ezhd8tHs6IXUV8a01omNywFrIRlnm69sWax0Jh9sZnt_Kjv_YVtqrp-R9Rmq_W5SlnN58FfO2I_mplxXROAB3kjWHsjwQBkzChnwoYgcOiBaN0) Considering all the different factors of a case and using that information to assign a percentage that you should charge your client can be difficult. The goal, of course, is to negotiate a fair contingency fee that works for both of you. **Pricing contingency fees based on the case's complexity and not just setting a standard contingency fee to use for every case is the key to providing your clients with an ethical, fair fee.** Here are some tips that you can use to determine what your lawyer contingency fee average should be: ### Consider Disbursement And Expense Responsibility Your first plan of action should be determining who will be responsible for any disbursements and expenses for the case. In some cases, like our New York example above, will see the client accepting responsibility for expenses in exchange for the lawyer taking a lower percentage of the winnings for the case. The most common scenario is that the lawyer pays for disbursements in advance and takes those fees out of the winnings of the case, **aside from the contingency fee**. In either scenario, the client must have a clear understanding of exactly what they are responsible for paying. Of course, it’s possible that disbursements may end up being more than what was originally anticipated. In the case of significant changes to the expenses of a particular case, the lawyer should communicate these changes to the client immediately and discuss with them how the changes will affect the settlement or award they may receive. ### Understand The Different Types Of Contingency Fees Thankfully, there are a variety of options for contingency fees that lawyers and clients can use when negotiating agreement terms. These standard contingency fee approaches can be used to balance risk and fairness when setting a percentage (or percentages) for what a lawyer earns for a case. | **Type of Contingency Fee** | **How it Works** | | --- | --- | | Fixed percentage | The percentage of winnings that the attorney receives remains unchanged throughout the duration of the case | | Staged or graduated | The attorney receives a percentage that may change depending on which stage the case reaches a resolution (e.g., settlement before trial might have a lower percentage than if the case resolves after a trial) | | Partial | The client agrees to pay legal costs (e.g., disbursements, expenses) in exchange for the lawyer taking a lower contingency fee percentage, or as a stipulation for the lawyer assuming a high-risk case | ### Understand State Rules And Regulations Different states have different rules regarding when and how typical contingency fees can be charged, depending on a variety of factors. It’s important to research your state’s specific rules surrounding contingency fees so that you can ensure compliance. Typical contingency fee rules indicate that: - Contingency fees [cannot be used](https://www.karplawfirm.com/resource/property-debt-finances/contingency-fees-in-family-law-cases/) in the majority of divorce, domestic relations, or family law cases. This is usually because the goal for these cases must be focused on doing what is best to come to a resolution that is fair and reasonable for both parties and that shouldn’t be influenced by monetary gain. - The use of contingency fees is also prohibited in all provinces in Canada, and the majority of states in the United States, for criminal cases as the lawyer [shouldn’t be seeking financial compensation](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_5_fees/) from their client as their goal for these matters. ### Determine Risk By Weighing As Many Factors As Possible Setting a fair lawyer contingency fee percentage requires paying careful attention to every factor of the case that could affect its outcome and the level of risk in terms of if the lawyer will get paid or not. This means taking the following considerations into account: - Whether accepting the case is in the law firm’s best interest (e.g., based on lawyer experience, skills, and abilities, the potential to limit access to future opportunities, circumstances surrounding the case). - The overall likelihood that the case will be successful, based on the success of similar cases the firm has taken on in the past - What resources (lawyers, time, etc.) that the firm will have to dedicate to ensure a successful outcome for the case - How much other firms in the area may charge for the case, and whether a fair fee can be established that is still competitive ### Research the Lawyer Contingency Fee Average in Your Area Competitive research can be beneficial for seeing if what you’re charging (or thinking about charging) for a contingency fee for a particular case aligns with other law firms in your area. If you find that there’s a big difference in what you charge versus what they charge, you can correct it before it becomes an issue that your clients notice. If nothing else, it will help you set a starting point for how you should be pricing your legal services. And, of course, if you have trusted colleagues that you can reach out to, ask them about their process in setting a typical contingency fee. They might have insight that you never considered. If you have a similar level of experience, reaching out can be extremely helpful for setting your own fees. ## Contingency Fee vs Hourly | **Type of Fee** | **Pros** | **Cons** | | --- | --- | --- | | Contingency | - May result in the lawyer getting paid more than they would if they charged a standard hourly rate - There is less potential for frivolous litigation, as if the case lacks merit, the lawyer won’t be willing to risk taking it on - May make it easier to attract clients with no upfront payment - Increases access to justice, winning the law firm more clients - The lawyer is just as incentivized to win the case as the client, as payment hinges on the case’s success | - The court may step in if the contingency fee charged is found to be unreasonable or unfair to the client - Weighing the factors of a case and setting a fair contingency fee may be difficult - The law firm or lawyer assumes all or most of the risk involved with taking the case - Some see contingency fees [as misleading in terms of access to justice](https://www.wipo.int/wipo_magazine/en/2010/01/article_0002.html), as clients often end up paying more (compared to other pricing options) | | Hourly | - Easy to explain to clients; most clients are familiar with this fee arrangement - Client still pays even if a case is lost - Flexibility to charge more if the workload for a case increases - Can be a very profitable billing strategy for law firms | - Limits access to justice based on affordability, narrowing a law firm’s accessible market - Incentivizes attorney inefficiency, since the longer they take on a case, the more money is earned - Increases price uncertainty for the client, as they can’t be entirely sure what their total legal fees will be (more possibility for non-payment, payment negotiations) - More focused on financial growth rather than value provided to the client - Value of a lawyer hinges on how many hours they can work rather than experience, skills, and abilities | Table sources: [1](https://wisetime.com/pros-and-cons-of-fixed-fee-vs-hourly-billing-in-the-legal-sector/), [2](https://www.charlottestories.com/6-pros-and-3-cons-of-contingency-fees/), [3](https://www.leiferlaw.com/what-are-the-benefits-of-contingency-fee-agreements/) ## Concluding Remarks ![conclusion to lawyer contingency fee average](https://lh6.googleusercontent.com/Il6B3pJu9XYKaSlg5dLiJFVqb-GAUKcURQc5c7Ti4SEmgYvRe_DQnZwEz1sRENbk-uKXeZMk1osE1ycnVczoczXYIj2dz9a5aly2n9mPf0Zsd0GNo8Jc8XwEkPnUuZRNP9ulbHWHEDK09-XIgGrvCz8) Providing a number of options for clients when it comes to legal fee pricing is part of being a forward-thinking law firm. But when it comes to contingency fees, the key takeaways to ensure that you’re pricing ethically include: - Weighing the facts and information available to you about the case and setting a percentage based on that rather than using a set percentage (e.g., 30%) for every contingency fee case that walks through the door - Ensuring that your clients understand their responsibilities with regards paying disbursements and expenses, and ensuring that this information is clearly stated in the contingency fee agreement - Having a clear understanding of the different types of standard contingency fees out there, and being able to choose a pricing model that best reflects the case before you - Knowing what your state and federal laws are surrounding contingency fees to ensure compliance - Researching other law firms that offer contingency fees in your area to ensure that you stay competitive Providing clients with a number of pricing options, while excellent for customer service and access to legal services, can be challenging to manage without an effective software solution. With AltFee, you can manage your [alternative fee arrangement](https://www.altfeeco.com/resources/alternative-fee-arrangements) pricing and collaborate with others within your firm quickly and efficiently to set the best pricing strategies for each client. [Get a demo](https://www.altfeeco.com/) today and see the software in action! #### Start Earning More Revenue with Fixed Fees Break free from hourly pricing and take the fear out of scoping and pricing client projects to start maximizing profitability. [Book A Demo](https://www.altfeeco.com/resources/lawyer-contingency-fee-average#get-a-demo) ![Altfee: Get A Demo](https://www.altfeeco.com/hubfs/product-callout.png) - Share this article - - - Popular Recent ![Post](https://www.altfeeco.com/hubfs/afa.jpg) May 24, 2022 [A Complete Guide to Alternative Fee Arrangements](https://www.altfeeco.com/resources/alternative-fee-arrangements) ![Post](https://www.altfeeco.com/hubfs/realization%20rate.jpg) June 7, 2022 [Realization Rate 101 For Law Firms](https://www.altfeeco.com/resources/realization-rate) ![Post](https://www.altfeeco.com/hubfs/AI-Generated%20Media/Images/The%20image%20features%20a%20sleek%20and%20modern%20office%20space%20designed%20for%20legal%20professionals%20The%20room%20is%20filled%20with%20natural%20light%20filtering%20through%20large%20floo-Dec-05-2025-05-44-35-6234-AM.png) December 4, 2025 [From Hours to Outcomes: The Hybrid Legal Pricing Model That Actually Works](https://www.altfeeco.com/resources/from-hours-to-outcomes-the-hybrid-legal-pricing-model-that-actually-works) ![Post](https://www.altfeeco.com/hubfs/implement-attorney-flat-fee-pricing.jpg) April 20, 2023 [Flat Fee Pricing for Lawyers: Why Use Them & How to Not Lose Money](https://www.altfeeco.com/resources/flat-fee) ![Post](https://www.altfeeco.com/hubfs/value%20based%20pricing.jpg) April 22, 2022 [A Guide to Value Based Pricing for the Legal Industry](https://www.altfeeco.com/resources/value-based-pricing) ![Post](https://www.altfeeco.com/hubfs/AltFee_ClioCon_legaltechca.png) October 15, 2026 [In the News: LegalTech.ca Features AltFee Ahead of ClioCon 2026](https://www.altfeeco.com/resources/in-the-news-legaltech.ca-features-altfee-ahead-of-cliocon-2026) ![Post](https://www.altfeeco.com/hubfs/wide_cinematic_3d_rendered_photoreal_scene_of_an_a.png) October 6, 2026 [In the News: AltFee Wins the 2026 Clio Integration Awards](https://www.altfeeco.com/resources/in-the-news-altfee-wins-the-2026-clio-integration-awards) ![Post](https://www.altfeeco.com/hubfs/Screenshot%202026-01-09%20at%203.02.01%20PM.jpg) January 9, 2026 [In the News: AltFee Included in LegalTech.ca's 10 Canadian Legaltech Startups to Watch in 2026](https://www.altfeeco.com/resources/in-the-news-altfee-included-in-legaltech.cas-10-canadian-legaltech-startups-to-watch-in-2026) ![Post](https://www.altfeeco.com/hubfs/AI-Generated%20Media/Images/The%20image%20features%20a%20sleek%20and%20modern%20office%20space%20designed%20for%20legal%20professionals%20The%20room%20is%20filled%20with%20natural%20light%20filtering%20through%20large%20floo-Dec-05-2025-05-44-35-6234-AM.png) December 4, 2025 [From Hours to Outcomes: The Hybrid Legal Pricing Model That Actually Works](https://www.altfeeco.com/resources/from-hours-to-outcomes-the-hybrid-legal-pricing-model-that-actually-works) ![Post](https://www.altfeeco.com/hubfs/undefined.png) October 15, 2025 [AltFee Launches Matter Analytics: Turning Data Into Pricing Power](https://www.altfeeco.com/resources/altfee-launches-matter-analytics-turning-data-into-pricing-power) ## Newsletter Signup ### Subscribe to our newsletter to receive the latest news. ![](https://www.altfeeco.com/hubfs/Pricing%20Playbook%20-%20iPad%20size.png) #### The Pricing Playbook for Modern Law Firms The way law firms price legal services is evolving. With growing demand for transparency, predictability, and value, firms need smarter pricing strategies. This **free playbook** introduces a **practical hybrid approach** that combines time-based inputs with value-based considerations, helping your firm **scope work effectively**, **price with confidence**, and **improve profitability**. [View Free Playbook](https://www.altfeeco.com/get-your-free-pricing-playbook) [![](https://www.altfeeco.com/hubfs/AltFee-Logo.svg)](https://www.altfeeco.com/) AltFee is award-winning legal pricing software that helps law firms price with confidence, forecast profitability, and make smarter pricing decisions using their own data. [Contact Us](https://www.altfeeco.com/contact) [Book a Call](https://www.altfeeco.com/get-a-demo-scheduler) [Follow us on LinkedIn](https://www.linkedin.com/company/altfee) [Follow us on Facebook](http://www.twitter.com/altfeeco) ### Site Map - [Product](https://www.altfeeco.com/product) - [Modern Pricing Certification](https://www.altfeeco.com/resources/modern-pricing-certified) - [AFA Firm Directory](https://www.altfeeco.com/afa-law-firm-directory) - [ROI Calculator](https://www.altfeeco.com/roi-calculator) - [Resources](https://www.altfeeco.com/resources) - [About Us](https://www.altfeeco.com/about-us) - [Login](https://app.altfeeco.com) ### Become an AltFee Insider Get insights on modern legal pricing, industry trends, and practical strategies to help your firm price smarter, delivered straight to your inbox. ### Want to see AltFee in action? ### Send Us A Message #### Pricing a Single Matter Select a typical matter: Company Incorporation Will Shareholders Agreement Trademark Registration M&A Share Sale Employment Agreement Review Contested Divorce Civil Litigation Commercial Property Sale ##### Without AltFee (Hourly) Number of hours to complete matter Average blended hourly rate $ Average revenue collected 75% is industry average (taking into consideration both billing realization rate & collection rate) % ##### With AltFee Expected revenue increase using AltFee % Expected collection rate using AltFee Percentage of your billed fees which are actually collected % ##### Totals Amount recorded for the matter = total number of hours to complete matter x average blended hourly rate #### $ 1750 Net amount earned by law firm = amount recorded for the matter x average revenue collected #### $ 1313 ##### AltFee Impacted Totals Amount billed to client #### $ 2100(+ $345) Net amount earned by law firm #### $ 2058 (+ $745) #### AltFee Annual Impact ##### Firm-Wide AltFee Impact Number of billing individuals in firm Estimated number of AltFee priced matters (per individual, annually) ##### Annual revenue increase to firm #### + $186,375 Note: This calculator is for illustrative purposes only © 2026 AltFee Solutions Inc., All Rights Reserved - [Privacy Policy & Cookie Policy](https://www.altfeeco.com/privacy-policy-cookie-policy) - [Terms & Conditions](https://www.altfeeco.com/terms-and-conditions) - [Security](https://www.altfeeco.com/security) - [Contact](https://www.altfeeco.com/contact) ```json { "@context" : "http://schema.org", "@type" : "TechArticle", "dateModified" : "2023-07-18", "datePublished" : "2022-09-20", "description" : "What should your law firm charge as a contingency fee percentage? 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