What is a contingency fee arrangement?

A contingency fee arrangement is a specific type of payment structure commonly used in legal cases, particularly in personal injury, workers' compensation, and other civil litigation matters. Under this arrangement, the lawyer only gets paid if the client receives a financial recovery, such as a settlement or a court award. This means that if the case is unsuccessful and no money is recovered, the client does not owe the lawyer any fees for their services.

This type of fee structure can significantly benefit clients who may not have the resources to pay legal fees upfront. It incentivizes attorneys to work diligently on the case, as their payment is directly linked to the outcome. It also creates a sort of partnership between the attorney and the client; both parties have a vested interest in securing a favorable result.

The other options represent different fee arrangements not aligned with the definition of a contingency fee. For example, a fee based on hourly billing requires clients to pay for every hour worked, regardless of the case outcome. A set fee for each consultation requires payment regardless of the case's success, and a flat fee regardless of the outcome means that the client pays a predetermined amount no matter the result, which does not reflect the risk-sharing aspect of a contingency fee arrangement.