You need attorney. Medical bills mounting. Lost wages creating cash flow crisis. Motorcycle destroyed. Can’t afford $5,000 retainer plus $350/hour.
Contingency fee solves this: attorney gets paid percentage of recovery, nothing if you lose. No upfront payment. No hourly billing. Attorney’s financial interest aligns with yours – bigger recovery means bigger fee for both.
But “no win no fee” has nuance. Percentage varies by case stage. Costs are separate from fees. Fee calculated on gross or net affects what you actually take home. Understanding these details prevents surprise when settlement check arrives and you expected more.
This guide explains how contingency fees work in Georgia, standard percentage ranges, how costs are handled, what you actually net from settlement, and questions to ask before signing fee agreement.
How Contingency Fees Work
Basic structure:
Attorney receives percentage of settlement or verdict. You pay nothing unless you win.
Georgia standard percentages:
- Pre-litigation (settlement before lawsuit filed): 33⅓% (one-third)
- Post-litigation (lawsuit filed, case in discovery/trial): 40%
- Appeal: 45% (rarely relevant in personal injury)
These are customs, not mandates. Percentages are negotiable, but most Georgia personal injury attorneys use this structure.
Why percentage increases post-litigation:
Filing lawsuit triggers significantly more attorney work:
- Drafting complaint ($2,000-5,000 in attorney time)
- Discovery (interrogatories, depositions, document production – 40-100 hours)
- Motion practice (responding to dismissal motions, filing motions to compel)
- Trial preparation (witness prep, exhibit preparation, jury selection strategy)
- Trial (3-5 days minimum, sometimes weeks)
Pre-litigation settlement might require 20-40 hours attorney time. Post-litigation case requires 100-300 hours. Higher percentage compensates for increased workload and risk.
When fee shifts from 33% to 40%:
Moment lawsuit is filed. Even if case settles week after filing (before significant litigation work), fee typically jumps to 40% unless fee agreement specifies otherwise.
Some agreements use hybrid: “33% if settled within 60 days of filing, 40% thereafter.” Negotiate this upfront.
Costs vs Fees (Critical Distinction)
Fee = attorney’s compensation
Percentage of recovery. Example: $100,000 settlement × 33% = $33,000 fee.
Costs = case expenses
Separate from fee. Include:
- Filing fees ($400-600 to file lawsuit)
- Service of process ($50-150 per defendant)
- Court reporter fees ($300-500 per deposition)
- Expert witness fees ($3,000-15,000 per expert)
- Medical record retrieval ($50-200 per provider)
- Accident reconstruction ($5,000-15,000 if needed)
- Photocopying, postage, travel
Total costs for moderate case: $5,000-15,000
Total costs for complex trial: $20,000-50,000+
Who pays costs?
Two models:
Model 1 – Attorney advances costs, recoups from settlement:
Attorney pays all costs as incurred. At settlement, costs are deducted from gross recovery before calculating fee (if fee on net) or after calculating fee (if fee on gross).
Example (fee on net):
- Settlement: $100,000
- Costs: $8,000
- Net: $92,000
- Attorney fee (33%): $30,360
- Client receives: $61,640
Example (fee on gross):
- Settlement: $100,000
- Attorney fee (33%): $33,000
- Remaining: $67,000
- Costs deducted: $8,000
- Client receives: $59,000
Client receives $2,640 more when fee calculated on net.
Model 2 – Client pays costs as incurred:
Client reimburses attorney for costs throughout case. Attorney still works on contingency (no fee unless win), but costs are client’s responsibility win or lose.
Rare in personal injury. Most attorneys advance costs to avoid requiring clients to pay thousands during case.
What happens if you lose?
Most Georgia contingency agreements: if case loses, client owes nothing (no fee, no reimbursement of costs attorney advanced).
Some agreements: client reimburses costs even if lose. Read fee agreement carefully. This provision should be prominently disclosed.
Fee Calculation: Gross vs Net
Critical question when negotiating fee agreement: “Is fee calculated on gross recovery or net recovery after costs?”
Gross calculation (worse for client):
Fee calculated on total settlement before deducting costs.
Example:
- Settlement: $100,000
- Attorney fee (33% of gross): $33,000
- Costs: $8,000
- Client nets: $59,000
Net calculation (better for client):
Costs deducted first, then fee calculated on remaining amount.
Example:
- Settlement: $100,000
- Costs: $8,000
- Net: $92,000
- Attorney fee (33% of net): $30,360
- Client nets: $61,640
Difference: $2,640 in client’s pocket.
On $100,000 settlement, this might seem minor. On $500,000 settlement with $40,000 costs, difference is $13,200.
Georgia practice:
Many attorneys use gross calculation (fee on total recovery). Some use net calculation (fee on amount after costs). This is negotiable.
Negotiation strategy:
Ask explicitly: “Is fee calculated before or after costs are deducted?”
If attorney says “on gross,” counter: “I prefer fee on net. Will you agree to that?”
Some attorneys flex on this, especially for strong cases.
What You Actually Net: Real Examples
Scenario 1 – Pre-litigation settlement, low costs:
- Settlement: $80,000
- Costs: $2,500 (medical records, investigation)
- Fee: 33% on net
- Calculation: ($80,000 – $2,500) × 33% = $25,575 fee
- Client nets: $51,925
Scenario 2 – Post-litigation settlement, moderate costs:
- Settlement: $200,000
- Costs: $15,000 (filing, depositions, expert)
- Fee: 40% on net
- Calculation: ($200,000 – $15,000) × 40% = $74,000 fee
- Client nets: $111,000
Scenario 3 – Trial verdict, high costs:
- Jury verdict: $450,000
- Costs: $45,000 (multiple experts, trial exhibits, 6-day trial)
- Fee: 40% on gross
- Calculation: $450,000 × 40% = $180,000 fee
- Remaining: $270,000
- Costs deducted: $45,000
- Client nets: $225,000
Scenario 4 – Complex case, appeal:
- Appellate verdict: $600,000
- Costs: $65,000 (trial costs + appellate briefs, oral argument)
- Fee: 45% on gross
- Calculation: $600,000 × 45% = $270,000 fee
- Remaining: $330,000
- Costs deducted: $65,000
- Client nets: $265,000
Fee Agreement Must-Haves
Georgia State Bar requires written contingency fee agreements. Before signing, verify agreement includes:
Percentage clearly stated:
“Attorney shall receive 33⅓% of all sums recovered if case settles before litigation, 40% if litigation commenced.”
Not: “Attorney shall receive customary fee.” Too vague.
Gross vs net clarification:
“Fee calculated on gross recovery before deduction of costs” OR “Fee calculated on net recovery after deduction of costs.”
If silent, ask for clarification in writing.
Cost responsibility:
“Attorney advances all costs. Costs reimbursed from settlement. If case unsuccessful, client owes no costs.”
OR
“Client reimburses attorney for costs as incurred. Client responsible for costs even if case unsuccessful.”
Know which model applies.
Cost categories listed:
Agreement should specify what counts as reimbursable costs:
- Filing fees, service fees
- Court reporter fees
- Expert witness fees
- Medical record fees
- Investigation costs
- Photocopying, postage
Should NOT include: attorney’s overhead (rent, staff salaries, utilities). These are covered by fee, not costs.
Settlement authority:
“Attorney cannot settle case without client’s consent.”
You have final say on whether to accept settlement offer. Attorney advises, you decide.
Termination clause:
What happens if you fire attorney mid-case?
Typical language: “If client terminates agreement before case concludes, attorney entitled to quantum meruit compensation for work performed.”
Quantum meruit = reasonable value of services, not full contingency percentage. Example: Attorney worked 50 hours at $350/hour = $17,500 owed even though contingency fee would have been $40,000.
Lien resolution:
How medical liens (Medicare, Medicaid, health insurance subrogation) get resolved.
Agreement should clarify: “Attorney negotiates lien reductions. Liens paid from client’s portion of recovery, not attorney’s fee.”
Red Flags in Fee Agreements
Red flag #1 – Percentage higher than 40% for standard case:
45% reserved for appeals. 40% for litigation. 33% for pre-litigation.
Attorney proposing 50% for motorcycle crash? Excessive. Walk away.
Red flag #2 – Client pays costs even if lose:
“Client responsible for all costs regardless of outcome.”
This shifts all risk to you. Attorney risks only their time (which they value at $350/hour). You risk $20,000+ in costs.
Standard practice: attorney advances costs, absorbs loss if case unsuccessful.
Red flag #3 – No settlement authority:
“Attorney authorized to settle case in attorney’s sole discretion.”
You lose control. Attorney might settle cheap to close file quickly.
You must approve settlement. Non-negotiable.
Red flag #4 – Hidden cost markups:
“Attorney entitled to reimbursement for costs plus 15% administrative fee.”
Costs should be actual costs, not profit center. Photocopying costs $0.10/page, not $0.50/page.
Red flag #5 – Referral fee splits not disclosed:
Attorney A refers your case to Attorney B (who actually handles it). Attorney B pays Attorney A 25% referral fee. This comes from the 33-40% contingency fee – your recovery doesn’t increase to cover it.
Georgia rules require disclosure: “Your case was referred by Attorney A. Attorney B will pay Attorney A 25% of fee received. This does not increase percentage you pay.”
No disclosure = ethical violation.
Negotiating Fee Percentage
Strong liability + severe injury + high value = negotiating leverage:
Attorney knows case will settle or win. Lower risk for attorney. You can negotiate:
“Standard fee is 33%. Will you take 25% given case strength?”
Some attorneys flex to 28-30% for cases worth $500,000+ with clear liability.
Weak liability or low value = less leverage:
Attorney taking risk case might lose. Higher percentage justified by risk.
Hybrid structures:
“25% if settled within 6 months, 33% thereafter, 40% if litigation required.”
Incentivizes early settlement while compensating attorney for extended work if needed.
Competing attorneys:
Consult multiple attorneys. If Attorney A offers 33% on gross and Attorney B offers 33% on net, choose B (you net more).
Alternative: Hourly Fee (Rarely Used for PI)
Some high-net-worth clients prefer hourly billing to avoid percentage fee on large recovery.
Example:
- Verdict: $2,000,000
- Contingency fee (40%): $800,000
- vs
- Hourly billing (200 hours × $350): $70,000 + $40,000 costs = $110,000 total
Client saves $690,000.
Why most PI attorneys refuse hourly:
Risk. Case might lose. Attorney worked 200 hours, client can’t pay $70,000 bill, attorney gets nothing.
Contingency transfers risk to attorney. Most clients prefer this because they can’t afford hourly risk.
Contingency fee framework: Attorney receives 33% if settled pre-litigation, 40% post-litigation. Costs (filing fees, experts, depositions) separate from fee – typically attorney advances, recoups from settlement. Fee on net (after costs deducted) better for client than fee on gross (before costs). Example: $100k settlement, $8k costs, 33% fee on net = client nets $61,640 vs $59,000 on gross ($2,640 difference). Fee agreement must specify: percentage, gross vs net calculation, cost responsibility, settlement authority, termination terms. No upfront payment required. Client pays nothing unless case wins. Negotiate percentage if case strong (clear liability, high value). Standard Georgia practice: attorney advances costs, absorbs loss if case unsuccessful. Read fee agreement before signing – understand exactly what you’ll net from settlement.
Disclaimer: This article provides general information about Georgia motorcycle accident law and is not legal advice. Every case is different. Consult a qualified Georgia motorcycle accident attorney to discuss your specific situation. Nothing in this article creates an attorney-client relationship.