What Are Contingency Fees and How Do Injury Attorneys Get Paid?

By Yosi Yahoudai Founder and Managing Partner

March 30, 2026

Personal Injury

Key Takeaways

• A contingency fee means your attorney only gets paid if you recover money — no win, no fee.
• Standard contingency fees in California run 33% for pre-lawsuit settlements and up to 40% if the case proceeds to litigation.
• Attorney fees and case costs are two separate things. Costs like filing fees and expert witnesses come out of your settlement on top of the fee percentage.
• If you lose, you owe no attorney fee — but your agreement may still require you to cover case costs.
• Medical malpractice cases follow different rules under California’s MICRA law, which caps attorney fees by statute.
• California law requires every contingency fee agreement to be in writing, and your attorney must inform you that fees are negotiable.

Hiring a personal injury lawyer in California costs nothing upfront. That’s the point of a contingency fee — the attorney absorbs the financial risk, and you pay only if the case produces a recovery. Understanding exactly how that arrangement works, and what it obligates you to, is worth knowing before you sign anything.

Know What a Contingency Fee Is

A contingency fee is a form of legal compensation in which an attorney’s payment depends entirely on the outcome of your case. If you recover money — through a settlement or a court judgment — your attorney receives a pre-agreed percentage of that amount. If you recover nothing, you owe no attorney fee.

This model exists to make legal representation accessible. Most people injured in car accidents, slip and falls, or other incidents cannot afford to pay an attorney $300 to $500 per hour out of pocket while simultaneously missing work and paying medical bills. Contingency fees remove that barrier.

In California, this arrangement is governed by Business and Professions Code § 6147, which dictates what every contingency fee contract must include, and Rule 1.5 of the California Rules of Professional Conduct, which prohibits attorneys from charging unconscionable fees.

Understand the Standard Fee Percentages in California

California sets no maximum contingency fee for most personal injury cases. Attorneys and clients negotiate the percentage, and it typically falls in one of two ranges:

• 33% (one-third): Standard for cases that settle before a lawsuit is filed. This is the most common structure.
• 40%: Applied when a lawsuit is filed and the case moves into active litigation or trial.

The jump from 33% to 40% reflects the additional time and risk an attorney carries when a case goes beyond early negotiation. Filing a lawsuit triggers depositions, potential motions, expert witness preparation, and the real possibility of trial — none of which come cheap for the firm absorbing those costs.

Some firms use a tiered structure, where the percentage increases incrementally at each stage of the case. Your written agreement will specify which model applies. Read it before signing.

Distinguish Attorney Fees From Case Costs

This is the distinction most clients miss, and it has a direct impact on how much money you take home from a settlement.

Attorney fees are the percentage your lawyer earns from the recovery. Case costs are separate out-of-pocket expenses advanced by your attorney while building your case. Common costs include:

• Court filing fees ($435 in California Superior Court as of 2024 for unlimited civil cases)
• Medical records and bills
• Expert witness fees
• Deposition transcripts and court reporter fees
• Investigation and accident reconstruction costs

These costs are typically advanced by the attorney and reimbursed from your settlement — but they reduce your net recovery on top of the attorney fee, not instead of it.

Your agreement must also specify whether the fee percentage is calculated on the gross recovery (the full settlement before costs are deducted) or the net recovery (after costs come out first). The difference adds up.

Example — $100,000 settlement with $5,000 in costs at a 33% fee:

• Gross method: $33,000 fee + $5,000 costs = $38,000 deducted; you receive $62,000
• Net method: $5,000 deducted first; 33% of $95,000 = $31,350 fee; you receive $63,650

The net method is more favorable to the client. Confirm which method your agreement uses before you sign.

Know What Happens If You Lose

If your case is lost — at trial, on appeal, or because the claim is abandoned — you owe no attorney fee. That protection is the foundation of the contingency model.

Case costs are a separate question. Some contingency agreements require you to reimburse costs even if you lose. Others absorb costs entirely in that scenario. California Business and Professions Code § 6147(a)(3) requires the written agreement to spell out whether costs remain your responsibility on an unsuccessful outcome.

Read that clause carefully. In a case that runs through trial, costs can exceed $20,000 to $50,000 or more — expert witnesses alone can cost $5,000 to $15,000 per person. Knowing your exposure upfront prevents unpleasant surprises.

A firm that absorbs costs on a loss is signaling genuine confidence in your case. That posture is worth factoring into your choice of attorney.

Recognize the Medical Malpractice Exception Under MICRA

Most personal injury claims in California — car accidents, slip and falls, dog bites, wrongful death — carry no statutory cap on attorney contingency fees. Medical malpractice is different.

California’s Medical Injury Compensation Reform Act (MICRA), as amended by Assembly Bill 35 effective January 1, 2023, imposes the following limits on attorney fees in medical malpractice cases:

• 25% of the recovery if the case settles before a lawsuit or arbitration demand is filed
• 33% of the recovery if resolved after a lawsuit or arbitration is initiated

These caps override any agreement between attorney and client. If your claim is against a doctor, hospital, or other licensed healthcare provider for professional negligence, MICRA governs what your attorney can charge — not the standard personal injury market rate.

AB 35 also raised the non-economic damages cap (pain and suffering) in medical malpractice cases from $250,000 to $350,000 for non-death cases, with annual increases of $40,000 scheduled through 2033, when it will reach $750,000.

Review What California Law Requires in Your Fee Agreement

California Business and Professions Code § 6147 requires every contingency fee agreement to be in writing and signed by both the attorney and the client before legal work begins. The agreement must include:

1. The percentage the attorney will receive
2. How costs and expenses will be handled — advanced by the attorney, billed as incurred, or waived on a loss
3. Whether costs remain the client’s obligation if the case is unsuccessful
4. An explicit statement that attorney fees are negotiable — this disclosure is required by law

That last item matters in practice. The percentage is not fixed. In clear-liability cases with high recovery potential and a fast resolution, attorneys sometimes accept lower percentages. Complex, contested cases that may run for years warrant higher rates. If an attorney presents a contingency agreement without these disclosures, or refuses to put it in writing at all, that is a statutory violation and a meaningful red flag.

California courts can reduce or void an attorney fee if it is found unconscionable under Rule 1.5 of the California Rules of Professional Conduct — another protection built into state law for injured clients.

Work With a Firm That Charges Nothing Until You Win

At J&Y Law, every personal injury case we handle is on a full contingency basis. No retainer. No hourly billing. We advance case costs throughout the process, and if we don’t recover for you, you owe us nothing.

We handle car accidents,slip and fall claims, wrongful death, catastrophic injury, and more — across Los Angeles, San Diego, San Francisco, Sacramento, and the rest of California. If you have questions about how our fee structure applies to your specific case, or want to understand what a personal injury lawyer actually does before committing to anything, contact us for a free consultation.

Call us or reach out online. There’s no cost to talk.