What Is a Contingency Fee?
A contingency fee is a payment structure where the attorney’s fee is contingent on the outcome of your case. If you win or settle, the attorney takes an agreed percentage of the recovery. If you lose, you owe no attorney’s fee. This is the standard arrangement in personal injury law because most clients cannot afford hourly rates that run $300–$500/hour while injured and out of work.
How Contingency Fees Work in Arizona
Arizona allows contingency fees in personal injury cases and regulates them under Rule 1.5 of the Arizona Rules of Professional Conduct. The fee must be in writing, signed by the client, and clearly state the percentage the attorney will receive. Standard contingency percentages in Arizona PI cases:
- Pre-lawsuit settlement: 33.3% (one-third) is most common.
- After lawsuit is filed: 40% is common, reflecting the added work of litigation.
- Post-trial or appeal: Some agreements go to 45%.
Costs (filing fees, expert witness fees, medical record costs, court reporter fees) are typically handled separately and reimbursed from the settlement before or after the fee is calculated—your agreement should specify which.
How It Affects Your Personal Injury Case
The contingency structure aligns the attorney’s interest with yours—they earn more when you earn more. It also creates access to justice for people who could never afford litigation. The trade-off is that the percentage can be significant on large settlements. On a $500,000 settlement, a 33% fee is $165,000. Understanding the agreement before signing is critical.
Example Scenario
After a Glendale car accident, Mark hires an attorney on a 33% contingency. His case settles for $120,000. The attorney’s fee is $39,600. Medical liens and case costs ($8,200) are deducted from the remaining $80,400. Mark takes home approximately $72,200. If Mark had tried to negotiate alone without representation, studies consistently show unrepresented claimants receive significantly less even after accounting for attorney fees.
Frequently Asked Questions
Do I still owe the attorney if I lose my case?
Under a true contingency arrangement, you owe no attorney’s fee if you lose. You may still owe out-of-pocket costs (filing fees, expert fees) depending on how your agreement handles them—read the cost section of your retainer carefully before signing.
Are contingency fee percentages negotiable in Arizona?
Yes, they are negotiable, though most firms have standard rates. On high-value, straightforward cases (clear liability, serious injury, well-documented damages), attorneys may agree to a lower percentage. On complex or uncertain cases, the standard or higher rate is typical.
Have questions about contingency fees? Call Wood Injury Law at (623) 207-0000 for a free case review.