How Personal Injury Lawyers Get Paid: Contingency Fees, Case Costs and What You Take Home

If you were hurt and you’re worried about what a lawyer would cost, here’s the plain answer. On a contingency fee, a personal injury lawyer is paid a percentage of the money recovered for you, under a written agreement. If nothing is recovered, you owe no fee. Case costs, such as court filing fees, medical records and expert witnesses, are separate. The lawyer may pay them as the case goes and be repaid from the recovery, and depending on your agreement and your state’s rules, you may owe them even if you lose. In Michigan, the fee in an injury case can’t be more than one-third of what’s left after those costs are repaid (Michigan Court Rule, or MCR, 8.121).

It’s reasonable to worry about being taken advantage of. The rules below exist so you can check the math yourself. This guide covers how the percentage is figured, who pays case costs, what your agreement and closing statement must show, and how to estimate what you’ll take home, with a worked example.

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What is a contingency fee?

A contingency fee is a fee that depends on how your case turns out. Instead of billing you by the hour, the lawyer takes an agreed share of what’s recovered through a settlement or a court judgment. Lawyers’ ethics rules allow a fee to be “contingent on the outcome of the matter,” and the agreement must be in writing (ABA Model Rule 1.5(c); Michigan Rule of Professional Conduct, or MRPC, 1.5(c)).

For you, that means:

• You don’t pay the fee up front. It comes out of the recovery.
• No recovery, no fee. If the case recovers nothing, the lawyer isn’t paid for the time spent. That risk is one reason lawyers look closely at a case before taking it. If you’ve been turned down, here’s why a lawyer may reject an injury case.
• Costs are a separate question. Read the agreement for anything you’d owe no matter how the case ends. The ABA’s model rule says the agreement “must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party” (ABA Model Rule 1.5(c)).

The American Bar Association’s Model Rules, quoted throughout this guide, aren’t binding on their own. They apply only where a state adopts them, and a state can change the wording when it does. Michigan’s rules, in the boxes below, differ in ways that matter.

A contingency fee isn’t the only way to pay a lawyer. Lawyers can also be hired by the hour or for a set fee. When it’s unclear whether a contingency fee is in your best interest, the lawyer should offer other options and explain what they mean for you (MRPC 1.5, comment).

How much do personal injury lawyers charge?

There’s no single national rate. The percentage is whatever you and the lawyer agree to in writing, within your state’s rules. Those rules say a few things about it:

• It has to be reasonable. The ABA’s model rule bars an “unreasonable fee,” and Michigan’s bars a “clearly excessive” one. Both weigh the same factors, including the time, skill and difficulty involved, the fee customarily charged locally for similar work, the amount at stake and the result, the lawyer’s experience, and whether the fee is fixed or contingent (ABA Model Rule 1.5(a); MRPC 1.5(a)).
• The percentage can change as the case moves along. The model rule requires the agreement to state “the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal” (ABA Model Rule 1.5(c)). So an agreement can set one rate if the case settles and a higher one if it goes to trial or is appealed.
• Some fees have a legal limit. Michigan caps the fee in injury, wrongful death and no-fault benefit cases (see the box below). If a federal employee hurt you while doing their job, your claim is against the United States, and the lawyer’s fee can’t be more than 20% of a settlement with the federal agency, or 25% of a court judgment or of a settlement reached after a lawsuit is filed (28 U.S.C. §§ 2672, 2677, 2678). Other states set their own rules, so ask whether any limit applies to your case.
• You can ask for less. A cap is a ceiling, not a set price, and a lawyer can agree to a lower percentage.

Is the fee figured before or after case costs?

This detail can change what you take home by thousands of dollars, and it’s easy to miss. There are two ways to do the math:

• On the gross: the percentage is taken from the whole recovery. Case costs are then repaid out of what’s left.
• On the net: case costs are repaid first, and the percentage is taken from what’s left.

Take a hypothetical $120,000 settlement with $12,000 in case costs and a one-third fee. Figured on the gross, the fee is $40,000. Figured on the net, it’s one-third of $108,000, or $36,000. Same case, same percentage, and $4,000 more for you with the net method. The difference always equals the percentage times the costs.

That’s why the ABA’s model rule requires the agreement to say “whether such expenses are to be deducted before or after the contingent fee is calculated” (ABA Model Rule 1.5(c)). If yours doesn’t say, ask, and get the answer in writing.

A lower percentage isn’t automatically a better deal. In the same example, 30% of the gross is $36,000, exactly what one-third of the net comes to. If costs had been $30,000 instead, 30% of the gross would still be $36,000, while one-third of the net would drop to $30,000. In a Michigan injury case, the cap would hold that fee to $30,000 (MCR 8.121). Compare agreements by the dollars you’d keep, not by the percentage alone.

What are case costs, and who pays them?

Case costs, also called expenses or disbursements, are the out-of-pocket costs of pursuing your claim. They’re separate from the lawyer’s fee for their time.

What counts as a case cost?

Common examples include:

• court filing fees and the cost of serving court papers
• fees for copies of medical records and bills
• court reporters and transcripts for depositions (sworn questioning of witnesses before trial)
• fees for expert witnesses, such as doctors or accident reconstruction engineers
• investigators, photographs and trial exhibits
• mediation fees, travel, postage and copying

Costs depend on the case. One that settles early may have few. One that goes to trial with several experts can have many. The ABA’s model rule also bars charging “an unreasonable amount for expenses” (ABA Model Rule 1.5(a)). Ask for a rough estimate for a case like yours, and whether the lawyer will check with you before large expenses, such as hiring an expert.

Who pays costs while the case is going on?

The lawyer can. Ethics rules let a lawyer advance, or pay up front, “court costs and expenses of litigation” (ABA Model Rule 1.8(e); MRPC 1.8(e)). The lawyer is then repaid from the recovery, as your agreement spells out.

Do you owe costs if you lose?

It depends on your agreement and your state’s rules.

• The ABA’s model rule lets a lawyer make repayment of advanced costs “contingent on the outcome of the matter” (ABA Model Rule 1.8(e)(1)). That means a lawyer may agree that you owe nothing for costs if the case is lost. The rule allows it but doesn’t require it.
• The ABA’s model fee rule also requires the agreement to tell you clearly about any expenses you’ll owe whether or not you win (ABA Model Rule 1.5(c)).
• State rules differ. Michigan’s, for one, is stricter (see the box below).

Find the costs clause in your agreement and ask directly: “If we lose, will I owe you anything?” Get the answer in writing.

Can a lawyer lend you money while you wait?

Generally, no. A lawyer can advance the costs of the case, but ethics rules generally bar other financial help to a client in a pending or planned lawsuit, such as rent, a car payment or medical bills. Michigan’s rule, for example, allows only narrow exceptions for lawyers who represent low-income clients for free (MRPC 1.8(e)). If money is tight while your case is pending, ask your lawyer about benefits you may be able to claim now, such as Michigan no-fault (PIP) benefits after a car crash.

What else comes out of your settlement?

The fee and costs aren’t the only deductions. If someone else paid for your injury-related care, they may have a legal right to be repaid from your settlement. This is often called a lien, or a right to reimbursement.

• Medicare. If Medicare paid for treatment that another payer, such as a liability insurer, is responsible for, those were “conditional” payments. Medicare can recover them from anyone who receives the settlement money, including you and your lawyer (42 CFR 411.21, 411.24). Medicare’s recovery is generally reduced by a proportional share of the costs of getting the settlement (42 CFR 411.37).
• Other health plans and providers may also claim repayment, depending on the plan’s terms and your state’s law.

Liens are paid from your share, after the fee and costs, so they come straight out of what you take home. If a claim to part of the money is disputed, your lawyer may have to hold that part in the trust account until it’s resolved (see below). Ask early which liens exist and whether they can be reduced. Before you accept any settlement, ask for a written estimate of what you’ll receive.

How much would you take home? A worked example

The numbers below are made up to show the math. They aren’t typical of any case, and they don’t predict what your case is worth or what it will cost. (For the factors that do drive value, see how to evaluate a personal injury case.)

Say your case settles for $120,000. The lawyer advanced $12,000 in case costs, the fee is one-third, and your health plan has a $10,000 claim for repayment of injury-related bills.

A few things to notice:

• The lien is the same in both columns. It comes out of your share, not the lawyer’s fee.
• The only difference is the order of the math, and it’s worth $4,000 to you.
• In Michigan, the gross column isn’t allowed in an injury case. A $40,000 fee is more than one-third of the $108,000 net.
• If the case had been lost, there would be no fee. Whether you’d owe the $12,000 in costs would depend on your agreement and your state’s rules.

Want to talk it through with a lawyer before you commit to anything? Get a free case review. Four quick questions, no cost, no obligation.

What should your fee agreement say?

Get the agreement in writing before the lawyer starts, and read it before you sign. Under the ABA’s model rule, a contingency fee agreement must be “in a writing signed by the client” and must state:

• how the fee is figured, including the percentage or percentages if the case settles, goes to trial or is appealed
• the litigation and other expenses that will be deducted from the recovery
• whether those expenses come off before or after the fee is calculated
• any expenses you’ll owe whether or not you win

That list comes from ABA Model Rule 1.5(c). Your state’s version may be worded differently, but these are the right things to look for anywhere. Also check:

What happens to the settlement money?

Settlement money is often paid to your lawyer rather than straight to you (MRPC 1.15, comment). That doesn’t make it the lawyer’s money. The lawyer holds it in a client trust account, separate from the firm’s own funds, and pays everyone from there: the case costs back to the lawyer, the fee, any liens, and your share. Your state’s ethics rules set the details. Michigan’s are in the box below.

What should the closing statement show?

When a contingency fee case ends, the lawyer must give you a written statement of the outcome. If there’s a recovery, it must show what you receive and how that amount was figured (ABA Model Rule 1.5(c); MRPC 1.5(c)). A clear closing statement lists:

• the total recovery
• each case cost repaid, and what it was for
• how the fee was figured: the percentage and the amount it was applied to
• each lien or bill paid from the settlement, and to whom
• the amount paid to you

Compare it line by line with your agreement. Ask about anything you don’t understand before the money is paid out.

What if you disagree about the fee?

Ask the lawyer to explain the numbers in writing. If that doesn’t settle it:

• The money in dispute should stay in the trust account while the rest is paid out. A lawyer may not hold funds to pressure a client into accepting the lawyer’s position (MRPC 1.15, comment).
• Some bars run fee arbitration or mediation programs, and lawyers are expected to seriously consider using them where they exist (MRPC 1.5, comment).
• Your state’s lawyer-discipline agency handles complaints that a lawyer broke the ethics rules.
• If you believe the lawyer mishandled the case itself, that’s a different problem. See our guide to legal malpractice claims.

What should you ask before you sign?

Bring these questions to your first meeting, and get the key answers in writing:

1. What percentage do you charge, and does it change if we file a lawsuit, go to trial or appeal?
2. Is your fee figured before or after case costs are repaid?
3. What costs do you expect in a case like mine, and will you check with me before large ones?
4. If we lose, will I owe you anything for costs?
5. Do you add interest or in-house charges to the costs you advance?
6. Will any other lawyer or firm share the fee?
7. Who will handle my case day to day, and how will you keep me updated?
8. What happens to the fee if I change lawyers, or if you withdraw?
9. Does the agreement require arbitration if we disagree?
10. How will medical bills and liens be handled, and will you try to reduce them?
11. Before I accept a settlement, will you give me a written estimate of what I’ll receive?
12. May I take the agreement home and read it before I sign?

For more on preparing, see what to expect at your first meeting with an injury lawyer, more questions to ask an injury attorney and how to find the right lawyer for your case.

What to do next

1. Get medical care and keep records. Save every bill, receipt and record, and note any costs you pay yourself.
2. Get a free case review. Tell us what happened in four quick questions, and a lawyer who handles cases like yours will contact you. In Michigan, you can also compare injury lawyers near you.
3. Compare fee agreements side by side. Ask each lawyer for a copy to read at home, and check the percentage, whether it’s figured before or after costs, and what you’d owe if you lose.
4. Get the answers in writing before you sign, and keep your signed copy.
5. Before you accept any settlement, ask for a written estimate of your net, with the fee, each cost and each lien listed.

What waiting can cost

• Filing deadlines keep running while you compare lawyers. Every state sets one, and some claims have much shorter notice deadlines.
• A rushed signature can cost you thousands. In the example above, the order of the math alone was worth $4,000.
• Settling before you know your net. A settlement generally ends your claim for good once you sign the release, so know what you’ll receive first.
• Liens left unanswered. A disputed claim to part of the money can keep that part in the trust account until it’s resolved.

What a good outcome looks like

You know the fee before you sign: the percentage, whether it’s figured before or after costs, and what you’d owe if you lose. You have a copy of the agreement, and big costs are explained as they come up. When the case resolves, the money goes into your lawyer’s trust account, the liens are sorted out, and you get a closing statement that matches your agreement to the dollar. Then your share is paid promptly. You never have to guess what you’ll take home.

Updated September 24, 2026

This guide is general information, not legal advice, and laws change. For advice about your situation, talk to a lawyer licensed in your state. Reading this page or contacting us does not create an attorney-client relationship.