Contingency Fee vs. Hourly Fee Comparison Calculator
Compare the total cost of hiring an attorney on a contingency fee basis versus an hourly fee basis to determine which arrangement is more financially advantageous for your case.
Formulas Used
Contingency Fee (expenses deducted after):
Attorney Fee = Settlement × (Contingency Rate ÷ 100)
Total Client Cost = Attorney Fee + Case Expenses
Client Net Recovery = Settlement − Attorney Fee − Case Expenses
Contingency Fee (expenses deducted before):
Net Award = Settlement − Case Expenses
Attorney Fee = Net Award × (Contingency Rate ÷ 100)
Total Client Cost = Attorney Fee + Case Expenses
Client Net Recovery = Settlement − Attorney Fee − Case Expenses
Hourly Fee:
Total Attorney Fees = Hourly Rate × Estimated Hours
Total Client Cost = Total Attorney Fees + Case Expenses
Client Net Recovery = Settlement − Total Client Cost
Break-Even Settlement:
Break-Even = (Hourly Rate × Estimated Hours) ÷ (Contingency Rate ÷ 100)
The settlement amount at which both arrangements produce equal attorney fees.
Effective Cost Rate:
Effective Rate (%) = (Total Client Cost ÷ Settlement) × 100
Assumptions & References
- Contingency fees typically range from 25%–40% of the recovery; 33.33% (one-third) is the most common standard rate in the United States (Model Rules of Professional Conduct, Rule 1.5).
- Contingency fees must be reasonable and are regulated by state bar rules; some states cap fees in specific case types (e.g., medical malpractice, workers' compensation).
- Case expenses (court filing fees, expert witness fees, deposition costs, etc.) may be deducted from the gross award before or after the contingency fee is calculated — the retainer agreement specifies which method applies.
- Hourly fee estimates are illustrative; actual hours may vary significantly based on case complexity, discovery, and litigation duration.
- This calculator does not account for taxes on settlement proceeds, structured settlements, or fee-shifting statutes (e.g., 42 U.S.C. § 1988 for civil rights cases).
- Under a contingency arrangement, the client owes no attorney fee if the case is lost; under an hourly arrangement, fees are owed regardless of outcome.
- Reference: ABA Model Rules of Professional Conduct, Rule 1.5 — Fees; Restatement (Third) of the Law Governing Lawyers § 35.