The percentage is the part everyone reads. Whether case costs come off before or after the fee, and when the tier moves, usually matters more.
A contingency agreement is a risk transfer dressed up as a price. The attorney funds the work, advances the out-of-pocket costs, and collects nothing if the claim fails, which means the percentage is not payment for hours but payment for carrying the downside. That is a real service and it has a real price. The question a careful reader asks is not whether the number is a third or something near it, but what the agreement says about the two clauses that quietly move more money than the headline rate: when the percentage steps up, and whether costs come off the top or off the remainder.
What the percentage is actually buying
Strip away the framing and a contingency fee buys three things at once. It buys labor: the demand package, the records chase, the calls with an adjuster who has no reason to return them promptly. It buys credit, because someone has to pay the court reporter and the records vendor months before any check arrives. And it buys insurance against the claim being worth nothing, since a liability denial, a preexisting condition, or a witness who changes the story can turn a promising file into a zero. A client paying hourly bears that third risk alone. That is the trade, and the percentage is its price.
Rates cluster in a familiar band, commonly around a third of the gross recovery on a claim settled before a lawsuit is filed. Some states cap the rate outright, some cap it on a sliding scale that falls as the recovery rises, and a few require the fee agreement to be filed or approved in certain case types. The rate is negotiable more often than clients assume, particularly on a clean liability case with a policy limit that is obviously going to be paid.
The tier that moves once suit is filed
Most agreements contain a second number. The fee sits at one level while the case is handled as a pre-suit demand, then rises once a complaint is filed, again if the case is set for trial, and sometimes again on appeal. The increase reflects a genuine change in workload and exposure, because filing suit commits the attorney to depositions, motion practice, and expert retainers that a demand letter never triggers. What a careful reader checks is the trigger itself. A fee that steps up on the date suit is filed is different from one that steps up when the defendant answers, or when the case survives a dispositive motion, and the earliest trigger gives the firm the most discretion over when the higher rate begins.
Costs off the top, or costs off the remainder
Case costs are separate from the fee and always have been: medical records fees, court filing fees, service of process, deposition transcripts, accident reconstruction, a treating physician's time for a narrative report or testimony. On a pre-suit claim these run modestly. On a filed case with two experts they can reach five figures. The clause that matters is the order of operations. If the fee is calculated on the gross recovery and costs are then subtracted from the client's share, the client pays more than if costs are deducted first and the percentage applied to what remains. On a meaningful recovery with meaningful costs the difference between those two sentences is not trivial, and both versions are common.
Read the costs clause for two more things. Whether costs are owed if the case loses, since some firms absorb them and some bill them, and whether the file carries interest or an administrative charge on advanced costs. The Federal Trade Commission oversees how consumer services are advertised, and a fee described in a television spot as costing nothing unless you win is describing the fee, not the costs.
When an hour of advice beats a third of the check
Not every claim needs a contingency arrangement. If the adjuster has already made an offer, if liability is admitted, and if treatment has concluded, an hourly consultation to review the offer and the medical specials may cost a few hundred dollars and answer the only question in play. Some attorneys will write a flat-fee demand letter, priced up front, that puts a file in front of a supervisor instead of a first-level adjuster. Both options leave the negotiation with the client, which suits a small soft-tissue claim and suits nothing with a disputed injury or a lien behind it.
The useful comparison is not fee against no fee. It is the percentage against the realistic difference in outcome, net of costs, on the specific facts of the file. Ask for both numbers in writing before signing anything, because a firm confident in its value will put them there.