Texas Legal Glossary · Personal Injury

Contingency Fee

Written and reviewed by Shane M. Boasberg, founder of SMB Law, PC · Licensed in Texas since 2003 · Updated October 2026

Definition: A contingency fee is a lawyer’s fee paid as a percentage of the money recovered, with no fee owed if there is no recovery. Texas requires a signed written agreement that states the percentage and how case expenses are handled.

Also called: contingent fee, no fee unless we win, percentage fee

What a contingency fee means in Texas

A contingency fee is a fee arrangement in which the lawyer is paid a percentage of whatever the client recovers, and nothing if the case produces no recovery. It is the standard arrangement in Texas personal injury cases because most injured people cannot pay hourly rates while they are out of work and facing medical bills.

Texas regulates these agreements closely. Government Code § 82.065 requires a contingent fee contract for legal services to be in writing and signed by both the attorney and the client. Rule 1.04(d) of the Texas Disciplinary Rules of Professional Conduct requires the writing to state the method by which the fee is determined, including the percentages that apply at settlement, trial, or appeal, and whether case expenses are deducted before or after the percentage is calculated.

How it works in practice

Percentages vary, but a common structure is one-third of the recovery if the case settles before a lawsuit is filed, with a higher percentage, often 40 percent, if suit is filed or the case goes to trial.

Case expenses are separate from the fee. Filing fees, deposition transcripts, medical records charges, and expert witness fees are typically advanced by the firm and reimbursed from the recovery. Whether those costs come off the top before the percentage is applied, or are taken from the client’s share afterward, is a term the contract must spell out.

Why it matters in your case

A contingency fee aligns the lawyer’s interest with the client’s: both are paid only from the result. Our injury clients receive a written closing statement at the end of every case showing the gross recovery, the fee, each expense, every lien paid, and the net amount to the client.

Example

Sam signs a contingency fee agreement providing for one-third pre-suit and 40 percent after filing, with expenses deducted after the fee. His case settles for $90,000 before suit, and the firm advanced $2,400 in records and investigation costs. The fee is $30,000. Expenses of $2,400 come out of the remaining $60,000. After a $7,000 hospital lien is negotiated down to $4,500, Sam receives $53,100.

This entry explains Texas law in general terms and is not legal advice for any specific situation. Statutes and case law change; the date above reflects the last review.