# Lawyer fee agreements: what a contingency fee contract must say

> What a car accident lawyer's contingency fee agreement must include under ABA Model Rule 1.5(c), who pays costs if you lose, and state rules.

Canonical page: https://accidentclaimfacts.com/choosing-a-lawyer/fee-agreements/  
Last reviewed: October 29, 2026 by the Accident Claim Facts editorial team  
General information, not legal advice. Talk to a licensed attorney in your state.

## Quick answer

A contingency fee agreement is the contract that hires a car accident lawyer for a share of what you recover. Under ABA Model Rule 1.5(c), which most states follow in some form, it must be in writing and signed by you, and it must state the percentage at each stage, which expenses will be deducted and whether they come out before or after the fee, and which expenses you owe even if you lose. At the end, the lawyer must give you a written statement showing the outcome and how your share was worked out. Several states add more, such as Florida's Statement of Client's Rights.

## Key facts

| Fact | Detail | Note |
|---|---|---|
| Form of the agreement | Must be in writing signed by the client | ABA Model Rule 1.5(c) |
| What it must flag | It must list any expenses you must pay whether or not you win | ABA Model Rule 1.5(c) |
| At the end of the case | The lawyer gives you a written statement of the outcome and, if there is a recovery, what you receive and how it was worked out | ABA Model Rule 1.5(c) |
| Texas contingent fee contracts | must be in writing and signed by the attorney and client | Tex. Gov't Code § 82.065(a) |
| Florida right to cancel | 3 business days | Rule 4-1.5(f)(4)(A) |
| Florida fee level presumed excessive after an answer is filed | Above 40% of the first $1 million | Without court approval |
| Fee cap on claims against the US government | 20% before suit, 25% after | 28 U.S.C. § 2678 |

## What a fee agreement is

A fee agreement is a contract. It sets out what the lawyer will do, how the lawyer is paid and who pays the costs of the case. For most car accident claims, the fee is a contingency fee: the lawyer takes an agreed share of any recovery and charges no fee if there is none.

The ABA model rules say the scope of the work and the basis of the fee must be explained to you, preferably in writing, before or soon after the work starts. For contingency fees the rule is stricter: the agreement must be in writing and signed by the client. Some states have written that into statute. In Texas, a contingent fee contract must be in writing and signed by the attorney and client, and in California the lawyer must give you a duplicate copy signed by both you and the lawyer when the contract is made.

> **Tip:** Ask for the agreement before the meeting ends and read it at home. A lawyer who will not let you take it away to read is showing you something about how the relationship will go.

## What the agreement must say

ABA Model Rule 1.5(c) lists what a contingency fee agreement must state: the percentage the lawyer takes if the case settles, goes to trial or is appealed, the expenses to be deducted, and whether they come out before or after the fee. It must also tell you about any expenses you must pay whether or not you win.

| Clause | What to look for |
|---|---|
| The percentage | One number, or a different number for settlement, lawsuit, trial and appeal |
| Expenses deducted | A list or description of the case costs that come out of the recovery |
| Before or after the fee | Whether costs come off the top before the percentage is calculated, or after |
| Costs if you lose | Whether you must repay advanced costs when there is no recovery |
| Scope | Which claims are covered: injury, property damage, an appeal, a claim on your own policy |
| Other lawyers | Whether another firm will work on the case or share the fee |
| Ending the agreement | What the lawyer is owed if you change lawyers or the lawyer withdraws |

California's statute is a useful checklist even outside California. It requires the contract to state the fee rate, how costs affect the fee and your recovery, and what you could owe for related matters the contract does not cover, plus a statement that the fee is not set by law but is negotiable. A California contract that leaves out a required term is voidable at your option, and the lawyer is then limited to a reasonable fee.

If another firm will share the fee, ABA Model Rule 1.5(e) allows it only if you agree in writing, including the share each lawyer will receive, and the total fee must be reasonable.

## Case costs and who pays if you lose

The fee pays for the lawyer's work. Costs are the out-of-pocket expenses of the claim: filing and service fees, medical records, police reports, expert witnesses, court reporters and deposition transcripts. In a case that goes to trial, experts alone can be expensive.

Many injury lawyers advance these costs as the case goes along. The professional rules allow it: in Florida, for example, a lawyer may advance court costs and litigation expenses, and repayment may depend on the outcome. That last part is the key question. Some agreements say you owe nothing if the case is lost; others say you must repay the costs either way. The ABA model rule requires the agreement to tell you which.

Florida's Statement of Client's Rights adds a right to be told what you could owe if you lose, including costs owed to your lawyer and any liability for the other side's fees and costs. In some cases, a losing party can be ordered to pay some of the other side's court costs, so the question is worth asking anywhere.

### Before or after the fee: why the order matters

> **Example:** Suppose, hypothetically, an agreement sets a fee of one-third and the costs come to one-tenth of the recovery. If the fee is taken from the full recovery, the lawyer takes 33.3% and costs take 10%, leaving you about 56.7%. If the costs are deducted first, the fee is one-third of the remaining 90%, about 30%, leaving you about 60%. Same case, same percentage, a different result.

Florida's statement also says your lawyer should tell you whether the fee will be based on the gross amount recovered or on the amount recovered minus the costs. Our guide to [contingency fees](https://accidentclaimfacts.com/money/contingency-fees/) works through more examples.

## The closing statement

When a contingency case ends, the ABA model rule requires the lawyer to give you a written statement of the outcome and, if there is a recovery, what you receive and how it was worked out. In practice, a closing statement lists:

1. **The gross recovery,** the total paid by the insurer or the court judgment.
2. **The lawyer's fee,** with the percentage applied.
3. **Each cost,** item by item.
4. **Liens and medical bills paid,** such as a hospital, a health plan or Medicare.
5. **The net amount to you.**

Florida goes further: until you approve the closing statement, your lawyer cannot pay any money to anyone, including you, without a court order, and every lawyer who shares the fee must sign it. Florida lawyers must keep the contract and closing statement for 6 years.

Settlement money is first deposited in a client trust account: the model rule says client money is held in a separate account, apart from the lawyer's own money. The lawyer must then promptly pay you the funds you are entitled to and, if you ask, give a full accounting. If a lien or bill is disputed, the model rule says the money in dispute is kept separate by the lawyer until the dispute is resolved, while undisputed amounts are paid out promptly. Our guide to [medical liens and subrogation](https://accidentclaimfacts.com/money/medical-liens-and-subrogation/) explains who can claim part of a settlement.

## State rules that add protection

Each state adopts its own professional rules, and some add contract terms of their own.

| State | Extra rule | Source |
|---|---|---|
| Florida | Before signing, the client must receive a signed Statement of Client's Rights for Contingency Fees | Rule 4-1.5(f)(4)(C) |
| Florida | The client can cancel within 3 business days without owing a fee | Rule 4-1.5(f)(4)(A)(ii) |
| Florida | Fees above set levels are presumed excessive without court approval: 33 1/3% of any recovery up to $1 million before an answer is filed, 40% of the first $1 million after | Rule 4-1.5(f)(4)(B) |
| Florida | A lawyer with secondary responsibility may take at most 25% of the total fee | Rule 4-1.5(f)(4)(D) |
| California | The contract must say the fee is not set by law but is negotiable | Bus. & Prof. Code § 6147 |
| Texas | A contingent fee contract must be in writing and signed by the attorney and client | Gov't Code § 82.065(a) |

Federal law caps fees on claims against the US government, such as a crash with a mail truck: 20% of an administrative settlement and 25% once a lawsuit is filed.

## Reading the agreement before you sign

A short, careful read now can prevent a fee dispute later. It helps to check:

- **Every blank is filled in.** No empty percentages, dates or names.
- **The percentages match what you were told,** at every stage.
- **The cost clause answers two questions:** whether costs come out before or after the fee, and whether you owe them if you lose.
- **The scope is clear,** including whether your property damage claim and any claim on your own policy are covered.
- **You get a signed copy** to keep.
- **You understand what happens if you change lawyers.** The guide to [changing lawyers](https://accidentclaimfacts.com/choosing-a-lawyer/changing-lawyers/) explains what happens to the fee.

If a clause is unclear, ask the lawyer to explain it or to rewrite it. Our list of [questions to ask a lawyer](https://accidentclaimfacts.com/choosing-a-lawyer/questions-to-ask-a-lawyer/) covers fees, and the [red flags](https://accidentclaimfacts.com/choosing-a-lawyer/red-flags/) guide covers agreements that should give you pause.

## FAQ

### Does a contingency fee agreement have to be in writing?

Under ABA Model Rule 1.5(c), yes: it must be in writing and signed by the client. States adopt their own versions, and some, such as Texas and California, also require it by statute.

### Do I pay case costs if I lose my car accident case?

It depends on the agreement. Lawyers may advance costs and make repayment depend on the outcome, but some agreements require you to repay costs either way. The ABA model rule requires the agreement to tell you which expenses you owe whether or not you win.

### Is the lawyer's percentage taken before or after costs?

Either is possible, and the agreement must say which. Taking costs out first usually leaves you more, because the percentage is applied to a smaller amount.

### Can I negotiate a lawyer's contingency fee?

Often, yes. California requires every non-medical-malpractice contingency contract to say that the fee is not set by law but is negotiable, and Florida's Statement of Client's Rights says there is no legal requirement to charge a set fee or percentage, and you have the right to bargain about the rate.

### What is a closing statement?

It is the written breakdown a lawyer gives you at the end of a contingency case. It shows the recovery, the fee, each cost, the liens paid and your share. Florida requires the client to approve it before any money is paid out.

### Can I cancel a contingency fee agreement after signing?

In Florida, a personal injury client can cancel within 3 business days without owing a fee, though advanced costs may be owed. Elsewhere, you can usually end the relationship, but the lawyer may be owed a fee for work already done.

## Sources

- [American Bar Association, Model Rules of Professional Conduct, Rule 1.5: Fees](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_5_fees/) — paragraphs (b), (c) and (e)
- [The Florida Bar, Rules Regulating The Florida Bar, Chapter 4](https://www-media.floridabar.org/uploads/2026/10/2027_04-OCT-Chapter-4-RRTFB.pdf) — Rule 4-1.5(f) and the Statement of Client's Rights for Contingency Fees
- [Texas Legislature, Government Code chapter 82](https://statutes.capitol.texas.gov/Docs/GV/htm/GV.82.htm) — contracts for legal services
- [State Bar of California, California Rules of Professional Conduct and the State Bar Act](https://www.calbar.ca.gov/sites/default/files/2025-09/Publication-250-Volume-1.pdf) — Business and Professions Code § 6147
- [Cornell LII, 28 U.S.C. § 2678](https://www.law.cornell.edu/uscode/text/28/2678), checked October 29, 2026
- [American Bar Association, Model Rules of Professional Conduct, Rule 1.15(a)](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_15_safekeeping_property/), checked October 29, 2026