Do Legal Malpractice Lawyers Work on Contingency?

In a contingency arrangement, you do not pay an hourly rate. The lawyer's fee is a share of what the case produces. If the case settles or wins at trial, the fee comes out of the recovery. If it loses, the lawyer receives no fee.

The percentage is set by agreement. Contingency percentages vary by lawyer, case, and state, and some agreements raise the percentage if the case goes to trial or appeal. Cornell's Legal Information Institute notes that in personal injury cases, where contingency fees are most common, lawyers typically receive between 20% and 50% of the recovery. Legal malpractice fees are negotiated the same way, and there is no single standard rate.

A contingency fee is not a free case: the lawyer's percentage comes out of your recovery, and case costs such as expert fees may be owed separately depending on what your written agreement says.

Why do malpractice lawyers use contingency? Because most people who were hurt by a lawyer's mistake have already lost money. A client whose injury case was dismissed for a missed deadline, or whose divorce settlement gave away a pension, often cannot pay hourly fees to prove it. Contingency shifts that risk to the new lawyer, who is paid only if the claim produces money.

Contingency agreements are regulated more tightly than hourly ones. Most states base their rules on the American Bar Association's Model Rules of Professional Conduct.

Under ABA Model Rule 1.5(c), a contingency fee agreement must be in writing, signed by the client, and must state how the fee is determined and clearly tell the client which expenses the client will be liable for. At the end of the matter, the lawyer must give the client a written statement showing the outcome.

Some states add specific requirements. California's Business and Professions Code § 6147 requires a contingency contract to be in writing and signed by both lawyer and client, with a duplicate copy to the client, and to include:

• The contingency fee rate.
• How costs and disbursements will affect the fee and the client's recovery.
• To what extent the client could owe the lawyer for related matters not covered by the contract.
• For most claims, a statement that the fee is not set by law and is negotiable.

In California, if a contingency fee contract leaves out any term required by Business and Professions Code § 6147, the client can void it, and the lawyer is then limited to a reasonable fee.

Before you sign, read the agreement with these questions in mind: Is the percentage calculated before or after costs are subtracted? Does the percentage change at trial or on appeal? What happens to costs if you lose? What happens if you fire the lawyer? Our guide to the retainer agreement questions in how to find a lawyer who sues lawyers has a fuller checklist.

Fees and costs are separate. The fee is the lawyer's pay. Costs are the out-of-pocket expenses of the case: filing fees, deposition transcripts, records, and above all the expert witness.

Most legal malpractice cases need at least one expert, usually an experienced lawyer who testifies about the standard of care, and sometimes a second expert on damages. Courts take this seriously. In 2024 a Texas appeals court wiped out a $1,141,671.67 malpractice judgment because the client had no expert testimony on damages. See our guide on whether you need an expert witness.

Contingency lawyers handle costs in two main ways:

• The firm advances costs and is repaid from any recovery. Ask whether you still owe the costs if the case loses.
• You pay costs as they come up, while the lawyer's time is on contingency. This lowers the lawyer's risk and may make a lawyer willing to take a smaller case.

Ask for periodic cost updates during the case. Knowing how much has been spent on experts and depositions helps you evaluate a settlement offer, since costs usually come out of the recovery before you receive your share.

Because the rules require the agreement to explain which expenses you will be liable for, you should never be surprised by a cost bill. If the agreement is vague, ask for it in writing before you sign.

Contingency only works when the case is likely to produce money. Some legal malpractice matters do not fit that model:

• Fee disputes. If the main claim is that you were overbilled, the recovery is a refund. Many lawyers will suggest fee arbitration first. See attorney fee dispute arbitration and our page on overbilling and fee disputes.
• Fee forfeiture claims. Where a lawyer breached a fiduciary duty, some states let the client seek fee forfeiture. Texas allows it even without proof of actual damages, under Burrow v. Arce (1999). Some lawyers take these on contingency and some prefer a hybrid.
• Cases with little collectible money. If the lawyer you want to sue has no insurance or assets, a contingency lawyer may decline or ask for hourly fees. See whether your lawyer has malpractice insurance.

People often ask whether the ban on contingency fees in divorce and criminal cases applies here. ABA Model Rule 1.5(d) bars contingency fees in domestic relations matters, such as divorce, and for defending a person in a criminal case. A malpractice lawsuit about how a divorce or criminal case was handled is a separate civil claim for money, which is why lawyers commonly take them on contingency. Criminal defense malpractice has its own hurdles, though, including rules in many states that require proof of innocence or exoneration. Our page on criminal defense malpractice explains them.

A contingency agreement for a malpractice case may run for years, so read it as carefully as you would a loan. Ask the lawyer to walk you through each of these points, and get the answers in the written agreement rather than a conversation:

1. What is the percentage, and does it change? Some agreements use one rate for a settlement before a lawsuit is filed, a higher rate after filing, and another for trial or appeal.
2. Is the fee figured before or after costs? As the example above shows, this can change your share by thousands of dollars.
3. Which costs will I owe, and when? Ask for an estimate of expert fees and whether you owe them if the case loses.
4. What happens if we part ways? Ask what the lawyer would claim from any later recovery if you fire them, or if they withdraw.
5. Who decides whether to settle? Ask how settlement offers will be communicated to you and confirm that you make the final call.
6. Will you handle the whole case? Ask whether the lawyer will bring in another firm for trial and how the fee would be shared.

A contingency fee agreement should state the percentage at each stage of the case, whether the fee is calculated before or after costs, and which expenses the client owes if the case is lost.

Bring the fee agreement you signed with the lawyer who harmed you, too. The new lawyer will want to see what that lawyer promised to do and how they were paid, and if your old lawyer settled your case without asking you, our page on settlements made without your consent covers that problem.

A contingency lawyer is deciding whether your case is worth their time and cost money. They are not deciding whether your former lawyer behaved well. The most common reasons for a no are:

1. The loss is too small to cover an expert, depositions, and possibly a trial.
2. The original case would not have come out much better, so the case within a case is weak.
3. The money would not have been collectible. A Florida appeals court cut a $5 million malpractice verdict to $250,000 in 2020 because the clients proved only $250,000 of insurance behind the original defendant.
4. The lawyer being sued cannot pay. Most states do not require malpractice insurance.
5. The deadline is too close or has passed. Check the statute of limitations in your state.

The broader numbers explain the caution. Summarizing the ABA's 2020 to 2023 claims study, Minnesota Lawyer reported that 82% of legal malpractice claims closed with no payment. See how much a legal malpractice case is worth for how lawyers estimate value.

If you think your lawyer's mistake cost you, a free case review takes about two minutes and can connect you with an independent attorney in your state who handles legal malpractice claims.