What is a contingency fee arrangement?

A contingency fee arrangement is a type of payment structure used in legal services where the attorney only receives a fee if the case is won or settled successfully. This model aligns the interests of the attorney and the client, as the attorney is motivated to work diligently to achieve a favorable outcome. Typically, the fee is calculated as a percentage of the recovery amount, serving as a risk-sharing mechanism; clients do not pay upfront fees or hourly rates, which can make legal representation more accessible, especially in personal injury or similar cases.

This arrangement is distinct from other fee structures. A fixed fee for legal services entails a predetermined charge regardless of the outcome, while a retainer fee requires clients to pay upfront for services that will be billed against later. Lastly, a government-mandated fee structure would imply a standardized fee level set by a governing body, which does not apply to the flexible, performance-based nature of contingency fees.