What Is a Contingency Fee?

Just about everyone has heard of “billable hours,” which is the way that most attorneys collect their fees. However, most Chicago personal injury attorneys ignore the hourly rate system in favor of the contingency fee system. The contingency fee system explained below, provides both lawyer and client with a host of advantages.



Under a contingency fee arrangement, the attorney fee equals a certain percentage of the total recovery. It doesn’t matter whether you win your compensation at trial or at the negotiating table.

A typical contingency fee is 33% of the total, although 20% is the legal limit for workers’ compensation cases. 

For example, if you win $10,000, you pay your lawyer $3,333. If you win $1,000, you pay your lawyer $333. If you win nothing – well, 33% of nothing is still nothing. As a bonus, most personal injury lawyers charge nothing for an initial case consultation.

Types of Cases That Are Eligible for Contingency Fee Agreements

Almost all personal injury lawyers charge by contingency fee. This type of fee arrangement is less common in other fields of law. To qualify for a contingency fee, your claim must be such that it will generate income from which your lawyer can deduct the fee. A criminal defense attorney, for example, won’t charge by contingency fee because even a successful defense will not generate any income to pay the fee. 

Advantages of Contingency Fee Agreements

The advantages of contingency fee arrangement include:

  • You don’t need any money up front to hire a lawyer. Ultimately, it is the quality of the claim, not the thickness of your wallet, that attracts a personal injury lawyer to your case.
  • The incentive structure puts you and your lawyer on the same side. Since your lawyer’s fee comes out of your winnings, your lawyer has every incentive to win as much money as they can for you. Contrast this with your insurance company—the more money they pay you, the less they get to keep.
  • Your financial risk is almost zero. You don’t need to worry about a personal injury lawyer jacking up your billable hours in pursuit of a claim that is ultimately unsuccessful.
  • The lawyer won’t take your case unless they believe in it since they work for free if they lose. This prevents you from pursuing a worthless claim.

Contingency fee agreements benefit society because they provide access to the legal system to people who otherwise couldn’t afford justice.

Other Deductions: Case Expenses

Most personal injury lawyers will advance any of your case-related costs that third parties demand. These might include:

  • Case investigation fees, perhaps including travel expenses.
  • Expert witness fees. Even if you don’t go to court, you might need an expert witness for consultation purposes.
  • Court fees if you file a lawsuit. This doesn’t necessarily mean you’ll go to trial.
  • Other amounts that depend on the specific facts of your case.

Typically, a personal injury lawyer will only expect you to repay these expenses if they win the case. If they lose, they eat the loss themselves.

Other Deductions: Medical Liens

A medical lien arises when you probably have a personal injury claim and cannot pay your medical expenses as they come due. A lien arises in favor of your healthcare provider, and you can use it to reassure your healthcare provider that you will pay them sooner or later. Your healthcare provider will deduct an amount from your compensation equal to the value of your medical lien. They will receive this money before you receive your compensation. 

Factors That Determine the Percentage of the Contingency Fee

The following factors are all likely to play a role in determining the amount of your contingency fee:

  • The value of your claim. The higher the value of your claim, the lower the contingency fee percentage is likely to be.
  • The strength of your claim. A lawyer will be more willing to lower a contingency fee if ultimate victory is almost certain.
  • The complexity of your claim. Product liability and medical malpractice claims are complex. They tend to take more time to resolve than other types of claims.
  • Whether you go to trial. Trials take time and extra work.
  • Legal limitations on the amount of the contingency fee. For example, Illinois limits the amount of a contingency fee for a medical malpractice claim to 33%.

You can probably negotiate the amount of your contingency fee with your lawyer. 

Schedule a Free Initial Consultation With a Chicago Personal Injury Lawyer

If you believe you might have a claim but aren’t sure, you have little to lose by discussing the matter with a Chicago personal injury attorney at Attorneys of Chicago Personal Injury Lawyers. Don’t hesitate to contact a personal injury lawyer at (312) 929-2884 who can analyze your claim, give you a ballpark estimate of its true value, and evaluate your chances of winning.