How to Present a Contingency Percentage

Contingency is one of four fee models a firm has to explain, and the contingency percentage is the single number clients ask about. It is nearly meaningless on its own, because the same percentage produces very different outcomes depending on when it applies and what it is calculated against. Assistants describing contingency arrangements routinely quote a figure in the low to mid thirties and then note that it rises if a case goes to trial, which is exactly the structure most firm pages omit.

The two things that make it meaningful

The first is the base. A percentage of the gross recovery and a percentage of the recovery after expenses are different arrangements, and the gap between them on a real matter is substantial. Stating the percentage without stating the base leaves the client to assume the more favourable reading.

The second is the schedule. Most arrangements step up at defined points, commonly when suit is filed and again if the matter reaches trial, because the work and the risk both increase. A single figure implies a flat arrangement, and a client who discovers the step later experiences it as a change of terms.

Presenting the step honestly

Show the schedule as a schedule. Three numbers against three stages is clearer than a paragraph and it prevents the most common misunderstanding in this category, which is a client believing they agreed to the lowest figure for the whole matter.

The step is defensible on its merits, so there is no reason to soften it. A firm taking a case to trial is accepting more work and more risk for an uncertain outcome, and clients understand that framing when it is offered before the fact rather than explained afterwards.

Expenses are separate and must be said so

Case expenses are not the fee and conflating them is the most frequent source of dispute in contingency work. Filing fees, expert witnesses, depositions and records all cost money that is advanced by somebody.

Say who advances them, whether they are recovered from the settlement before or after the percentage is applied, and what happens to them if the case is lost. That last point belongs here and is covered in its own right, because it is the question clients are most afraid to ask.

What the rules require

Several jurisdictions cap contingency percentages in particular matter types and require the agreement to be in writing with specified content. Where a cap applies, say so, because it is a protection the client has and most do not know exists.

Do not publish a figure as though it were universal. A percentage that is standard in one state and one matter type may be prohibited in another, and a page that states one number without qualification is wrong somewhere.

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This is one attribute of the firm described in the injury practice this percentage is charged in. That practice area sits inside the channels and intake that bring someone to the fee question.

Frequently asked questions

What makes a contingency percentage meaningful?

The base it is calculated against and the schedule it follows. A percentage of gross recovery and a percentage after expenses are different arrangements with a substantial gap on a real matter. Most arrangements also step up when suit is filed and again at trial.

How should the percentage be presented?

As a schedule rather than a single figure: three numbers against three stages is clearer than a paragraph and prevents the most common misunderstanding, which is a client believing they agreed to the lowest figure for the whole matter.

Why does the percentage step up?

Because the work and the risk both increase. A firm taking a case to trial is accepting more work for an uncertain outcome, and clients accept that framing when it is offered before the fact rather than explained afterwards.

Are case expenses part of the fee?

No, and conflating them is the most frequent source of dispute in contingency work. Filing fees, experts, depositions and records all cost money advanced by somebody. State who advances them, whether they come out before or after the percentage is applied, and what happens if the case is lost.

Can a firm publish one standard percentage?

Not without qualification. Several jurisdictions cap contingency percentages in particular matter types and require a written agreement with specified content. A figure standard in one state and matter type may be prohibited in another, so a single unqualified number is wrong somewhere.

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