A contingency fee is a payment arrangement where your lawyer gets paid only if they win money for you, through a settlement or court verdict. Instead of charging by the hour, your attorney’s payment is a pre-agreed percentage of the compensation recovered in your case. This system allows injured clients to access legal help without paying anything up front.
Here’s how contingency fees work in New York personal injury cases:
- No Upfront Fees: You don’t pay attorney fees while your case is pending.
- Paid Only If You Win: The lawyer’s fee comes directly from your settlement or verdict, not from your pocket.
- Written Agreement: The percentage is clearly stated in a signed contingency agreement before work begins.
- Case Expenses: Costs such as court filings or expert witnesses are usually advanced by the firm and later reimbursed from your recovery.
- Standard Rates: In most personal injury cases, contingency fees are up to 33⅓% of the total recovery across New York State.
- Medical Malpractice Exception: These cases follow a statutory sliding scale, where the fee percentage decreases as the recovery amount increases.
This fee structure ensures your lawyer is motivated to achieve the best possible outcome, and you can pursue justice without financial risk.
If you have questions about contingency fees, our NY personal injury attorneys can help you understand your options. Call us at 1-800-608-3333.
Why Contingency Fees Are Common in New York Personal Injury Cases
Contingency fees are widely used in New York personal injury cases because they make experienced legal representation accessible to everyone, regardless of financial situation. Instead of paying expensive hourly rates, clients can pursue justice immediately without worrying about upfront legal costs.
This fee model also aligns the lawyer’s interests with yours: your attorney only gets paid if you win. It spreads the financial risk between you and your lawyer, encouraging them to fight hard for the maximum recovery possible.
In communities across New York, including Upstate areas where families may not be able to afford hourly billing, contingency arrangements make justice more achievable and fair.
- Access: You can start your case without paying any hourly fees.
- Shared Risk: Your lawyer earns a fee only if you recover compensation.
- Common Practice: Contingency fees are the standard structure for most New York personal injury cases.
This approach gives injured individuals the confidence to stand up against insurance companies and large defendants without financial pressure holding them back.
What Types of Cases Typically Use Contingent Fee Contracts in NY?
Contingency fee arrangements are common across a wide range of New York civil cases where clients seek monetary compensation rather than court orders or injunctions. This model allows individuals to pursue justice and financial recovery without paying legal fees upfront – particularly in complex or high-cost cases where out-of-pocket representation would otherwise be out of reach.
Here are the most common types of cases that typically use contingency fee contracts in New York:
Social Security Disability (SSD) Back-Pay Matters: Representation for retroactive benefit recovery.
Motor Vehicle, Pedestrian, and Bicycle Accidents: Including car, truck, rideshare, and hit-and-run injury claims.
Premises Liability & Negligent Security: Slip and fall, unsafe property, or inadequate security incidents.
Construction & Labor Law Injuries: Worksite accidents under New York Labor Laws.
Product Liability & Defective Medical Devices: Injuries caused by unsafe consumer products or medical implants.
Wrongful Death Actions: Claims filed by surviving family members for fatal negligence.
Medical & Dental Malpractice: Professional negligence causing harm or misdiagnosis.
Nursing Home Neglect & Abuse: Cases involving mistreatment or unsafe care conditions.
Civil Rights & Police Misconduct: Lawsuits seeking compensation for constitutional rights violations.
Employment Discrimination & Retaliation: Claims under federal and state labor protections.
Mass Torts & Class Actions: Collective claims arising from defective products or corporate negligence.
Maritime & Railroad Injury Claims: Including Jones Act and FELA-based injury cases.
What’s the Difference Between Contingency, Hourly, and Flat Fees?
In New York, lawyers use different billing models based on the matter and scope. A contingency fee pays the lawyer a percentage of the money recovered. An hourly fee is charged for time spent at a set rate. A flat fee is a single agreed-upon amount for a defined task.
| Attribute | Contingency | Hourly | Flat |
|---|---|---|---|
| Payment timing | From the client’s recovery at the end | As work is performed, it is invoiced periodically | Set amount paid upfront or in milestones |
| Who bears the fee risk | Lawyer bears the risk if there is no recovery | Client pays regardless of outcome | Client pays regardless of outcome |
| Cost predictability | Percentage known; outcome varies | Low predictability; time can expand | High predictability; price is fixed |
| Billing method | Agreed percentage of recovery | Rate × time entries | One price for a defined scope |
| Common use in NY | Personal injury and other tort claims | Business disputes, defense, advisory work | Simple or well-defined services and filings |
How Contingency Fee Agreements Work in Real Life
In practice, a contingency representation moves through clear stages. You meet for an initial consult, sign a written fee agreement, and your lawyer investigates, negotiates, and, if needed, files suit and prepares for trial. If money is recovered, the agreed percentage and approved case costs are deducted, and you receive your net funds.
Why Clients Don’t Pay Upfront Legal Costs
With contingency arrangements, you do not pay attorney fees at the start. Most firms advance reasonable litigation expenses and recover them only if the case succeeds. This structure lets injured people pursue valid claims without carrying hourly bills during recovery.
How Attorney Contingency Fee Percentages Are Calculated
A contingency fee is a percentage of the total recovery that you and your lawyer agree upon in a written retainer agreement before the case begins. In most New York personal injury cases, this percentage is up to 33⅓% (one-third) of the settlement or verdict. Example:
Let’s say your case settles for $300,000 and your contingency agreement sets the attorney’s fee at 33⅓%.
- Total Recovery: $300,000
- Attorney Fee (33⅓%): $100,000
- Case Expenses (if any): Deducted separately from the recovery
- Net Amount to Client: $200,000 (after the attorney fee and reimbursed expenses)
If there’s no recovery, you owe no attorney’s fee. This structure ensures your lawyer’s compensation depends entirely on achieving a successful result for you.
Net vs Gross Contingency Fee Calculations in NY
When entering a contingency fee agreement, it’s important to understand how your attorney’s fee will be calculated – whether it’s based on the gross recovery (the full settlement amount) or the net recovery (the amount remaining after case-related costs are deducted).
In New York, attorneys must provide a written, itemized closing statement at the conclusion of your case. This document clearly breaks down the total settlement, attorney’s fee, and all reimbursed expenses, so you can see exactly where every dollar goes.
Typical case expenses that may be deducted before calculating your net recovery include:
- Court filing and service fees
- Medical records, reports, and transcript costs
- Expert witness, investigator, or consultant fees
- Deposition, exhibit, and document-copying expenses
- Travel or courier costs related to your case
Understanding whether your fee is based on the gross or net amount helps you anticipate your final payout and ensures full transparency between you and your attorney.
Who Pays Legal Costs and Recoverable Expenses?
Litigation expenses are usually advanced by the firm and reimbursed from the recovery. Your contract will explain which expenses qualify and when they are deducted. Typical recoverable costs include:
- Expert witness and evaluation fees.
- Court costs, deposition transcripts, and mediator fees.
- Medical records, postage, and reasonable travel.
What Happens If a Case Is Lost or Withdrawn?
If there is no recovery, you generally do not owe a legal fee. Depending on your agreement, you may still be responsible for limited out-of-pocket costs that were disclosed in advance. This is the standard no-win, no-fee model used in many New York injury cases.
What Legal Rules Govern Contingency Fees in New York?
New York regulates contingency fee agreements to protect clients and ensure full transparency. The rules cover what must be in your written contract, limits on fee percentages for certain case types, and the itemized disclosures you receive before any money is released to you.
Required Contingency Fee Disclosures Under NY Law
Before any funds are disbursed, your attorney must give you a written breakdown that shows exactly how the settlement or verdict will be distributed. You should see the total recovery, the legal fee, the expenses, and your net amount. Clients also have access to the Part 137 Fee Dispute Resolution Program when eligible.
Your closing statement should list:
- Gross settlement or judgment.
- Attorney’s contingency fee.
- Itemized case expenses and disbursements.
- Client net recovery after fees and costs.
Written Agreement & Itemized Costs: State Law Requirements
New York requires contingency fee agreements to be in writing and signed by both the client and the attorney. Judiciary Law §474-a and court rules also require clear terms about how the fee is calculated and how litigation expenses will be handled. Firms may offer bilingual agreements to aid understanding.
Your agreement must include:
- Written form signed by client and attorney.
- The contingency percentage and when it applies.
- An expense clause that explains advances and reimbursement.
- Notice that you will receive a final itemized statement.
- Compliance with the Letters of Engagement Rules (22 NYCRR Part 1215).
Sliding Scale Contingency Fee Structure in Medical Malpractice
Medical malpractice cases in New York follow a statutory sliding scale that limits the attorney’s percentage as the client’s recovery increases. This scale applies to medical, dental, and podiatric malpractice. Statutory scale:
30 percent of the first $250,000
25 percent of the next $250,000
20 percent of the next $500,000
15 percent of the next $250,000
10 percent of any amount over $1,250,000
Statutory Fee Caps and Limitations in Tort Cases
Outside of medical malpractice, contingency fees in New York personal injury and wrongful death matters are commonly capped at one-third of the recovery, subject to court rules and review. Medical malpractice fees must follow the sliding scale above. These limits are designed to keep costs reasonable and transparent. At a glance:
- Personal injury and wrongful death: up to 33⅓ percent is common.
- Medical malpractice: sliding scale percentages apply.
Why Do Clients Choose “No Win No Fee” Arrangements?
Contingency fee agreements are especially attractive to injured New Yorkers because of how the payment system is designed. This structure eliminates financial barriers, making it possible to hire a skilled attorney without paying anything up front.
Legal Access Without Financial Barriers
Contingency fees let you pursue a valid claim without paying attorney fees at the start of the case. This opens the door for people facing medical bills or time away from work to get representation.
Example: after a car crash, a Syracuse man can hire a Syracuse car accident lawyer, begin an investigation, and file suit without paying hourly invoices during recovery.
Risk-Sharing and Client-Lawyer Alignment on Outcome
Under a contingency model, the lawyer’s compensation is tied to the result. The fee is earned only if there is a recovery for the client. This structure aligns interests, links strategy to results, and keeps both sides focused on building a strong case.
Psychological Relief From Not Paying Legal Fees Upfront
Knowing you will not owe a legal fee if there is no recovery reduces financial pressure during an already difficult time. With a clear “no recovery, no fee” agreement, clients can move forward with a claim without fear of new legal bills after a loss.
When Might a Contingency Agreement Not Be the Right Choice?
Contingency fees are not the best fit for every legal matter. In some situations, another billing model may serve your goals better based on claim value, complexity, and evidence. The sections below outline common scenarios so you can make an informed decision without slowing your case.
Small Recovery Cases With Low Damages
When the likely recovery is small, a percentage fee can reduce your net in a way that does not make practical sense. The fee structure should match your goals and the value of the claim.
Example: $5,000 settlement minus 33⅓% fee leaves $3,333 before any costs.
Disputed Fault or Weak Evidence Cases
If liability is unclear or documentation is thin, the chance of success drops. Some lawyers decline pure contingency in these matters and may suggest an hourly or a hybrid structure that reflects the risk profile.
Ethical Conflicts or Dual Fee Structures
Ethics rules prohibit unreasonable or duplicative fees. Mixing hourly and contingency billing is permitted only with a clear written agreement that explains what work each fee covers. Ambiguity can create conflict, so terms must be specific.
| Situation | Why It Can Be a Problem |
|---|---|
| Hourly plus contingency on the same task | Risk of double-billing |
| Undefined cost terms | Disputes over reimbursements |
| Multiple agreements without clarity | Conflicting obligations |
Flat or Hourly Fee May Cost Less in Simple Matters
For straightforward tasks that resolve quickly, a flat or hourly fee can cost less than a percentage of a modest recovery. Suitability depends on complexity, expected duration, and risk.
Comparison: $2,000 recovery vs $1,000 flat fee may favor a flat arrangement.
What Should You Check Before Signing a Contingency Fee Agreement?
Before you sign, make sure you understand exactly how the fee is calculated, which costs are deducted, and what happens if there is no recovery. Informed consent means knowing your financial responsibilities, when you will receive an itemized statement, and the contract obligations that apply throughout the case.
Ask Questions About Percentages, Costs & Deductions
Start with these essentials so you can compare terms confidently:
- Is the percentage applied to the gross recovery or the net after costs, and when are costs deducted?
- Which case expenses will be advanced, and who pays them if there is no recovery?
- What costs are typical in cases like mine, and what is the expected range?
- Do percentages change if the case goes to trial or appeal, and how is that defined?
- How soon after settlement will I receive the itemized closing statement and my net funds?
- What liens will be paid from the recovery, and how are they negotiated?
- How are fee disputes handled, and what are my options if I have questions later?
Compare Fee Schedules Between New York Law Firms
| Criteria | What to Check | Why It Matters |
|---|---|---|
| Fee rate and scope | Percentage by stage, any step-ups for trial or appeal | Predicts your likely net recovery |
| Cost handling | Which expenses are advanced and when reimbursed | Avoids unexpected out-of-pocket costs |
| Transparency in writing | Clear gross vs net method, sample closing statement | Let’s you track every deduction |
| Communication plan | Who updates you, how often, and in what format | Ensures you stay informed |
| Litigation posture | Readiness to file suit and try the case if needed | Aligns strategy with your goals |
| Timeline for payment | When funds are disbursed after settlement | Sets realistic expectations |
Look for Signs of Transparent and Ethical Fee Practices
A fair contingency agreement is clear, written, and easy to follow. Ethical firms present the terms before you sign and provide detailed accounting at the end. Quick checklist:
- Written agreement signed by client and attorney.
- Fee percentage and calculation method are stated plainly.
- Expense clause explaining advances and reimbursement.
- Disclosure that you will receive an itemized closing statement.
- No hidden terms and a clear process for questions or disputes.
How Are Legal Fees and Case Costs Deducted After Settlement?
After a settlement, the total amount is deposited into a client trust account. Attorney fees and approved case expenses are taken out before you receive your portion. The “gross” settlement is the full amount recovered. The “net” is what remains after fees, expenses, and any required lien payments. New York law requires an itemized written disbursement statement.
| Deducted Item | How and When It Is Applied |
|---|---|
| Attorney contingency fee | Calculated per the signed agreement and taken from the recovery at disbursement |
| Case expenses and disbursements | Reimbursed from the recovery once invoices are confirmed and approved |
| Medical liens and statutory liens | Paid from settlement funds before the client’s net is issued, as required by law |
| Court costs and filing fees | Deducted when documented by receipts and included in the closing statement |
| Expert and investigation costs | Reimbursed after settlement if advanced during the case and authorized in writing |
| Client net recovery | Remainder paid to the client with a written itemized statement showing all deductions |
Is a Contingency Fee Agreement the Right Fit for Your Situation?
Use this quick checklist to decide if this model matches your goals.
- I cannot or prefer not to pay hourly fees during the case.
- My claim seeks money damages rather than only non-monetary relief.
- The likely recovery justifies a percentage fee after costs.
- Evidence of fault and damages is reasonably strong.
- I understand how gross and net recovery are calculated in writing.
If most points are yes, a contingency agreement may be appropriate for you.
Common Myths and Misconceptions About Contingency Fees
| Myth | Fact |
|---|---|
| All lawyers work on contingency. | Many do not. Contingency is common in personal injury; other matters use hourly or flat fees. |
| No win means you never pay anything. | You owe no attorney’s fee if there is no recovery. Pre-agreed case expenses may still apply. |
| Contingency gives the client full legal control. | Clients decide whether to settle. Lawyers handle strategy and filings under ethics rules. |
| Percentages are unlimited in New York. | Personal injury fees are commonly up to 33⅓ percent. Medical malpractice uses a statutory sliding scale. |
| Contingency guarantees a big payout. | It does not. Results depend on liability, proof, insurance limits, and damages. |
Reading the written agreement carefully is the best way to understand how your fee and expenses will work in New York.
FAQs About Contingency Fees in New York
Can I get a free consultation before signing a contingency agreement?
Yes. You can get a free consultation before signing a contingency agreement, and you should use the consultation to review percentages, costs, and how deductions work.
Does a contingency fee include court filing fees and expert costs?
It depends. A contingency fee covers legal services, while court filing fees and expert costs are usually separate disbursements deducted from the recovery if advanced.
Is the contingency percentage higher if a case goes to appeal?
It varies. The contingency percentage may be higher if a case goes to appeal when your written agreement sets different percentages for trial or appeal work.
How do I verify if a contingency fee agreement complies with NY law?
To verify if a contingency fee agreement complies with NY law, check for a signed writing, a clear fee method, expense terms, and a promised itemized closing statement.
Can multiple lawyers share a contingency fee in New York?
Yes. Multiple lawyers can share a contingency fee in New York if you consent in writing and the total cost is reasonable and fully disclosed.
What happens if I fire my lawyer during the case?
It depends. If you fire your lawyer during the case, prior counsel may claim a reasonable fee for work performed, usually paid from the contingency at resolution.
Can contingency agreements change during a case?
Yes. Contingency agreements can change during a case only by a new written agreement that clearly explains revised percentages and cost terms and follows ethics rules.
Can a lawyer charge a mixed hourly and contingency fee?
It depends. A lawyer can charge a mixed hourly and contingency fee if the arrangement is reasonable, clearly written, and avoids duplicating fees for the same work.
When is the client paid after a successful lawsuit recovery?
The client is paid after a successful lawsuit recovery when funds clear the trust account and liens, fees, and expenses are resolved, with an itemized closing statement.
What if the attorney is replaced mid-case? Who gets paid?
It depends. If an attorney is replaced mid-case, the court can apportion contingency fees between prior and current counsel based on work performed, paid from the final recovery.
Before You Move On: A Last Word on Contingency Fees
Understanding contingency fees in New York helps you read any agreement with confidence. Focus on what is written, how the percentage is applied, and how costs are itemized before funds are released. The fee structure is only one part of your case alongside evidence, timelines, and liens.
If you have questions, Stanley Law Offices can walk you through the terms so you can choose what fits your situation. Contact us now.
