Written and reviewed by Josh Kohanim, Esq., California Bar No. 328609 · Reviewed
In this guide
There is no upfront charge for representation in an injury case, and no hourly bill arriving each month. The fee comes out of the recovery at the end. The statute that governs the agreement itself is Business and Professions Code section 6147, which requires the contract to be in writing, to state the rate, to explain how costs affect both the fee and your recovery, and to say in writing that the fee is not set by law but is negotiable.
Contingency fees
A contingency fee is a fee paid as a share of what the case recovers, and only out of that recovery. If there is no recovery there is no attorney fee. The risk moves from the client, who usually cannot pay an hourly lawyer to argue with an insurance company for a year, to the firm, which can carry it.
The other fee structures exist and almost never appear in an injury case. An hourly fee bills for time and is paid whether the case wins or loses. A flat fee prices one defined task. A retainer is money paid up front and held against future bills. All three require the client to fund the case, which a person with a broken wrist and no income cannot do.
| Structure | How it is paid | Where it shows up |
|---|---|---|
| Contingency | A share of the recovery, nothing if there is no recovery | Personal injury, including car accident claims |
| Hourly | Billed by the hour, win or lose | Business disputes, defense work, some family law |
| Flat fee | One price for one defined task | A will, an incorporation, a single hearing |
| Retainer | Money paid up front and drawn down against bills | Ongoing hourly matters |
Required fee agreement terms
Section 6147 is short, and few clients are shown it. It applies whenever an attorney contracts to represent a plaintiff on a contingency basis. The contract has to be in writing, and the attorney must, at the time the contract is entered into, provide a duplicate copy signed by both the attorney and the client.
| Requirement | What it means for you |
|---|---|
| The contingency fee rate the attorney and client agreed on | The percentage is stated on the page, not described in a meeting |
| How disbursements and costs will affect the fee and the recovery | The order of operations is disclosed before you sign, not after the check clears |
| To what extent the client may be required to pay for related matters not covered by the agreement | Anything outside this case is priced separately and in writing |
| A statement that the fee is not set by law but is negotiable between attorney and client | Required wording |
| A signed duplicate copy given to the client when the contract is made | You leave with the document, the same day |
The consequence gives those requirements force. Failure to comply with any provision of section 6147 renders the agreement voidable at the option of the plaintiff, meaning the client can undo it, and the attorney is then entitled to collect a reasonable fee rather than the one the paper promised. Read your agreement against the table above before you sign it. Every line is checkable in about ninety seconds.
The difference between fees and costs
Costs, which section 6147 calls disbursements, are the money spent to build the case rather than the money paid for the lawyer's work: filing fees, service of process (formal delivery of court papers), medical records charges, deposition transcripts and court reporters, mediation fees, exhibits, and expert witness fees. They are advanced by the firm during the case and repaid out of the recovery. They are not the fee, and they are not usually included in it. If there is no recovery, you owe no fee and no case costs.
That leaves one question the statute makes the agreement answer: is the percentage taken from the gross recovery, or from what is left after costs come out? One illustrative settlement, run both ways, shows the difference. These numbers are an illustration of the calculation, not a prediction about any case.
| Line | Fee taken on the gross | Fee taken after costs |
|---|---|---|
| Recovery | $120,000 | $120,000 |
| Case costs repaid to the firm | $8,000 | $8,000 |
| Fee at one third, for illustration | $40,000 | $37,333 |
| Left before medical bills and liens | $72,000 | $74,667 |
Same recovery, same percentage, $2,667 of difference from one clause. That is why the disclosure is in the statute, and it is the question clients most often forget to ask. Ask it before you sign, because afterward the answer is whatever the document already said.
The percentage and what moves it
California law does not set a number, which is what section 6147 requires the agreement to tell you. What is common is a tiered rate: one percentage if the claim resolves before a lawsuit is filed, a higher one after, because a filed case adds depositions, experts, motions, and trial preparation. The trigger is defined in your contract rather than by statute, so ask which event moves the rate. Filing the complaint that starts the lawsuit, a set number of days before trial, and an appeal are all used as triggers by different firms.
The percentage is also not the biggest variable in what you take home. Medical liens usually are. A hospital or health plan claim reduced by tens of thousands of dollars matters more to your net than a few points of fee, which is why it is worth asking a firm how it handles the lien negotiation at the end of a case, not only what it charges at the start.
Other deductions before payment
A settlement check does not arrive at your house. It is deposited into the firm's client trust account and disbursed in order: the attorney fee, the case costs, then anyone with a claim on the recovery for your treatment, then you. A lien is a legal claim on the recovery held by a provider or a hospital. Subrogation is a health plan's right to be repaid from the same money. Our post on how contingency fees work for car accident lawyers carries the full deduction table, including who can claim a share and which statute lets it be reduced.
Fees and costs with no recovery
If there is no recovery, you owe no fee and no case costs. That is the promise on every page of this site. Other firms handle costs on a loss differently, so ask for that clause specifically and read it before you sign anywhere.
Cases not needing a lawyer
Not every claim is worth a fee. If nobody was hurt, the other driver's insurer has accepted fault, and the argument is about the cost of a bumper, a contingency fee can cost you more than the dispute is worth. The same is true of a very small injury claim where you were treated once and released, and the adjuster is already paying the bill.
The math changes as soon as there is real treatment, disputed fault, an uninsured driver, or a policy too small to cover the injuries. Once liens and coverage limits are in play, the file gets decided by people who do this daily, and the fee comes out of a recovery that is usually larger for having had one. The same arrangement covers a Los Angeles truck accident claim, where the costs of building the case run higher. Our guide on how to maximize a car accident settlement covers what moves the number.
Car accident lawyer fees
A percentage of money you would otherwise not have, disclosed in writing before anything starts, with the costs of building the case shown on their own line. Nothing up front, and if there is no recovery you owe no fee and no case costs. The number itself is not fixed by California law, and the agreement is required to tell you so.
We put the agreement in your hands before you decide, walk through what comes out of a settlement and in what order, and hand you the signed copy the day you sign. To see how the rest of a claim is built first, start with our Los Angeles car accident lawyer page or the guide to filing a car accident claim in Los Angeles, and the case results page shows what several of our files recovered.
Tell us what happened. We will explain the agreement line by line before you sign anything.