What is a "contingency fee" arrangement?

A "contingency fee" arrangement is a payment structure where the attorney's fee is contingent upon the outcome of the case—specifically, the attorney only receives a fee if the client wins or settles the case successfully. This arrangement aligns the attorney's interests with those of the client, as the attorney is incentivized to maximize the client's recovery to earn their fee.

In contingency fee agreements, the attorney typically takes a percentage of the recovery amount, which can motivate them to work diligently on the client's behalf while also making legal representation accessible to clients who may not afford to pay attorney fees upfront. This system is commonly used in personal injury cases, where clients may not have the financial resources to pay an attorney hourly as the case unfolds.

The other payment structures mentioned, such as fixed fees or nominal charges, do not involve the attorney's compensation being directly tied to the case's outcome, thus distinguishing them from the contingency fee model.