6 Pros and 3 Cons of Contingency Fees


When a lawyer takes on a case for a client, the lawyer typically works with the client to set the terms of their agreement. One such term is the fee or percentage of the compensation that will go to the attorney if they successfully recover compensation from their client’s opponent. This type of arrangement is often called a contingency fee because it depends on whether there is sufficient opportunity for recovery. You can learn more about contingency fees here.

Pros of Contingency Fees

No Hourly Fees

The most obvious pro to contingency fees is that you don’t have to pay your lawyer until they win your case and get you the compensation you deserve. In addition, with a contingency fee, you don’t have to pay anything if your lawyer loses. This is especially helpful in personal injury cases, which can last for a long time between filing the lawsuit and trial.


Lawyers are incentivized to do good work under a contingency fee structure. Since there are no hourly fees, the lawyer has no financial reason to drag out your case in hopes of earning more through additional hours worked. As a result, lawyers are committed to the case in such situations and use their best efforts to move your case along as swiftly as possible.

Less Pressure 

If you have been injured due to another party’s negligence, the insurance company may say that you must sign a release of their liability so as to get your medical bills paid. This results in additional pressure on the victim and can make them feel stuck with whatever terms the insurance company offers. Contingency fees allow victims to get help from lawyers who will fight for them and alleviate the pressure that comes from insurance companies and their hefty terms.

Eliminates Bad Lawyer Competition

Contingency fee arrangements will never promote “greedy” lawyers. The client always gets the best lawyer for their case. Additionally, contingency fees eliminate lawyer competition by reducing the number of lawyers willing to take on a case. This provides clients with the legal help they can afford and reduces the number of lawyers who would only be in it for the money.

Fair Compensation

When it comes to contingency fees, the fee your lawyer deducts as payment from your compensation is pretty reasonable and not a lot. The amount of money that is deducted from your compensation to pay for your lawyer’s services depends on how much your case is worth. This protects you from greedy lawyers who might want to take advantage of you. All you have to pay your lawyer is a fixed percentage of your compensation, so they can’t manipulate you into paying other charges. This is important because some lawyers may be tempted to charge you more money if they are paid based on hours.

No Surprise Fees

With contingency fees, there are no hidden fees or costs involved. If you have a signed contingency fee agreement, there will never be any surprise costs from billing to pay off after your case is over. The absolute value of the reward is what you will receive.

Cons of Contingency Fees

Complexity of the Case

If a lawyer can only be paid from compensation that is entirely dependent on winning a case, they might be unwilling to take on specific cases with a lower chance of winning. This could be due to the amount of work or the complexity of a case and can often mean that people who need help the most are left out.

High Percentage Payments

Some high-profile cases have contingency fee structures of up to 40%. This means you must fight for substantially larger compensation in your case so as to be able to pay your lawyer’s contingency fee and still be left with a sufficient amount of money that covers any injury or damages. However, it is possible to negotiate a lower percentage depending on the circumstances.


People who never had a personal injury case before may not fully understand that they should pay their lawyer a percentage of their compensation, not just the value of their case. This can cause frustration and confusion when they hire an attorney who ends up billing them in a way they were not expecting.