In this guide
The short version: injury lawyers usually charge a contingency fee — commonly one-third of the settlement if the case settles before a lawsuit and around 40% after one is filed — paid out of the recovery, not upfront. Case costs and medical liens come out too. See what you’d keep.
How a contingency fee works
Under a contingency fee, the lawyer is paid only if you recover money, and the fee is a percentage of that recovery. The American Bar Association’s Model Rule 1.5(c), which most states follow in some form, requires the agreement to be in writing and signed by you, and to state:
- the percentage the lawyer receives if the case settles, goes to trial or is appealed;
- which litigation and other expenses come out of the recovery;
- whether those expenses are deducted before or after the fee is calculated; and
- any expenses you’ll owe whether or not you win.
When the case ends, the lawyer must give you a written statement showing the outcome and how your share was calculated.
What the percentages look like in dollars
| Settlement | Fee at one-third | Fee at 40% |
|---|---|---|
| $10,000 | $3,333 | $4,000 |
| $25,000 | $8,333 | $10,000 |
| $50,000 | $16,667 | $20,000 |
| $100,000 | $33,333 | $40,000 |
| $250,000 | $83,333 | $100,000 |
These are fees only. Case costs and medical liens are deducted as well — the take-home calculator shows all of them together.
Fee on the gross or after costs? It matters
On a $50,000 settlement with $3,000 in case costs and a one-third fee:
| Fee on the full settlement | Costs repaid first, fee on the rest | |
|---|---|---|
| Attorney fee | $16,667 | $15,667 |
| Case costs | $3,000 | $3,000 |
| You receive (before liens) | $30,333 | $31,333 |
Same percentage, $1,000 difference. Some states require the fee to be calculated after costs — New Jersey and Michigan, for example, apply their limits to the net amount recovered.
When the percentage changes
Many agreements use a lower percentage if the case settles early and a higher one once the lawyer has to file suit, prepare for trial or handle an appeal. Florida’s fee rule shows a common structure: up to 33⅓% of the first $1 million if a case resolves before the defendant files an answer, up to 40% after that, lower percentages on larger amounts, and an additional 5% if an appeal is needed.
States and claims with fee limits
Some jurisdictions cap contingency fees in injury cases. A few verified examples:
| Where | Limit |
|---|---|
| Florida | Before an answer is filed: 33⅓% of the first $1M. After: 40% of the first $1M. Both: 30% of $1M–$2M, 20% above $2M. Higher fees are presumed excessive without court approval. |
| New Jersey | 33⅓% of the first $750,000, 30% of the next $750,000, 25% of the next $750,000, 20% of the next $750,000; above that by court application. Applied to the net amount after costs. |
| Michigan | One-third of the amount recovered, computed after deducting case costs. |
| Claims against the U.S. government (FTCA) | 20% of an administrative settlement; 25% of a judgment or settlement after a lawsuit is filed. |
Worked examples using those rules:
- Florida, $1.5 million recovered after the defendant answered: 40% of $1M plus 30% of $500,000 = $550,000 (36.7%).
- New Jersey, $1 million net recovery: 33⅓% of $750,000 plus 30% of $250,000 = $325,000 (32.5%).
- Michigan, $90,000 recovered with $6,000 in costs: one-third of $84,000 = $28,000.
Many states also cap fees in medical malpractice cases. Rules change; your lawyer must tell you if a limit applies.
Costs are separate from the fee
Case costs — medical records, filing fees, depositions, expert reports — are usually advanced by the lawyer and repaid from the settlement. They are small in many cases that settle early and can be substantial if a case goes to trial. Ask for an itemized list before the money is distributed.
How fees affect your medical liens
If Medicare paid for your treatment, federal rules require it to reduce its claim by its share of your attorney fees and costs (42 CFR § 411.37). For example, if fees and costs equal 35% of the settlement, Medicare’s claim is reduced by 35%. Other lienholders may agree to similar reductions. The take-home calculator applies the Medicare rule automatically.
Frequently asked questions
What percentage does a lawyer take from a settlement?
Most personal injury lawyers work on contingency and take a percentage of the recovery set in a written agreement. One-third is a common rate when a case settles before a lawsuit is filed, and many agreements step up to around 40% once a lawsuit is filed or a case goes to trial. Some states cap these percentages.
Do you have to pay a personal injury lawyer upfront?
Usually not. Under a contingency agreement the fee is paid out of the settlement or judgment. Case expenses are often advanced by the lawyer — ABA Model Rule 1.8(e) allows lawyers to advance court costs and litigation expenses, with repayment that may depend on the outcome — but your agreement must say how expenses are handled.
What happens if I lose?
With a contingency fee, there is no attorney fee if there is no recovery. Whether you owe case expenses depends on the agreement: ABA Model Rule 1.5(c) requires a contingent fee agreement to tell you about any expenses you will owe whether or not you win.
Can I negotiate a lawyer’s contingency fee?
Yes. A fee agreement is a contract. You can ask whether the percentage applies to the gross settlement or the amount left after costs, whether it steps down for an early settlement, and whether there is a cap on costs. Get any change in writing.
Do big personal injury firms take a bigger share?
Large and small firms generally use the same contingency structure; what matters is the agreement you sign. Compare the percentage at each stage, how costs are handled, and whether the fee is calculated before or after costs.
Where does my settlement check go?
Settlement funds are normally deposited in your attorney’s client trust account. The attorney pays the fee, case costs and any liens, then sends your share. In a contingent fee matter, ABA Model Rule 1.5(c) requires a written statement showing the outcome and how your share was calculated.
Sources
- ABA Model Rule 1.5 — Fees (contingent fee agreements: writing, method, expenses) (American Bar Association)
- ABA Model Rule 1.8(e) — Financial assistance to clients (American Bar Association)
- Rules Regulating The Florida Bar, Rule 4-1.5(f)(4)(B) — contingent fee schedule (The Florida Bar)
- New Jersey Court Rule 1:21-7 — Contingent fees (New Jersey Courts)
- Michigan Court Rule 8.121 — Contingent fees in personal injury and wrongful death claims (Michigan Courts)
- 28 U.S.C. § 2678 — Attorney fees under the Federal Tort Claims Act (Cornell Legal Information Institute)
- 42 CFR § 411.37 — Amount of Medicare recovery when a settlement is made (procurement costs) (eCFR)
Not legal or financial advice. InjuryMath is not a law firm and does not sell or broker funding. This page gives general information based on the sources listed; your contracts and your state’s law control. For advice about your situation, talk to a licensed attorney in your state.