The contingent fee is the customary method of compensating plaintiffs’ lawyers in personal injury and death cases. The practice of paying an attorney a share of the damage recovery is an American-born invention dating back to the early 1800s. All U.S. jurisdictions permit contingent fees subject to the general ethical requirement that such fees be reasonable and not excessive. In addition, federal and state laws impose a patchwork of limits on the fee percentage ranging from 10 percent to 50 percent.

Contingent fees generate heated debate. They provide access to courts to victims who cannot afford to litigate against well-funded adversaries. Unlike defense counsel working for an hourly fee, the contingent fee lawyer is financially motivated to resolve the case as quickly as possible for the highest sum. “Tort reform” advocates have argued, however, that contingent fees encourage needless litigation by incentivizing lawyers to take on a large number of doubtful cases knowing that only a few need to be successful. Also, comparing the amount of a contingent fee to the risk and effort actually undertaken by the attorney is a difficult task. Many attorneys automatically charge the same standard percentage no matter whether a case requires a tough fight to establish liability or is a “slam dunk” with a clearly culpable defendant.

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