Contingency Fee vs. Hourly Fee Cost Comparator
Compare the total out-of-pocket cost of a contingency fee arrangement versus an hourly billing arrangement to determine which is more financially advantageous for your legal matter.
Formulas Used
Contingency Fee — Expenses Deducted After Fee:
- Attorney Fee = Settlement × Contingency Rate
- Client Net Recovery = Settlement − Attorney Fee − Case Expenses
- Total Cost = Attorney Fee + Case Expenses
Contingency Fee — Expenses Deducted Before Fee:
- Net Award = Settlement − Case Expenses
- Attorney Fee = Net Award × Contingency Rate
- Client Net Recovery = Net Award − Attorney Fee
- Total Cost = Attorney Fee + Case Expenses
Hourly Fee:
- Attorney Fee = Hourly Rate × Estimated Hours
- Total Cost = Attorney Fee + Retainer + Case Expenses
- Client Net Recovery = Settlement − Total Cost
Effective Cost Rate = Total Cost ÷ Settlement × 100
Break-Even Hours = Contingency Total Cost ÷ Hourly Rate
Assumptions & References
- Contingency fees in the U.S. typically range from 25%–40%; 33.33% (one-third) is the most common standard rate (ABA Model Rules of Professional Conduct, Rule 1.5).
- Some states cap contingency fees — e.g., California caps personal injury contingency fees on a sliding scale (Cal. Bus. & Prof. Code § 6146); medical malpractice cases often have statutory caps.
- The "expenses before vs. after" distinction significantly affects client recovery. The fee agreement should specify which method applies.
- Retainer fees are treated here as an upfront cost separate from billed hours. In practice, retainers are often applied as a credit toward hourly fees billed.
- This calculator assumes the case is won and a recovery is obtained. Under a contingency arrangement, if the case is lost, the attorney typically receives no fee (though expenses may still be owed).
- Hourly fee estimates are illustrative; actual hours may vary significantly based on case complexity, discovery, and trial length.
- This tool is for educational comparison only and does not constitute legal or financial advice. Consult a licensed attorney for guidance on fee arrangements.
- Reference: ABA Standing Committee on Ethics and Professional Responsibility, Formal Opinion 94-389 (contingency fee reasonableness).