A contingency fee is a method of paying for legal representation in which the attorney’s fee depends on the outcome of the case. It is the most common fee arrangement in Georgia personal injury matters. This guide explains how contingency fees work under Georgia law, the ethical rules that govern them, and the terms that typically appear in a contingency fee agreement.
What a Contingency Fee Is
Under a contingency fee arrangement, the attorney is paid a percentage of the money recovered through a settlement or judgment, rather than an hourly rate billed regardless of result. If there is no recovery, no attorney fee is owed under a typical contingency agreement. The fee is contingent, meaning it depends, on obtaining a recovery for the client.
This structure is most common in cases where the client seeks money damages, such as personal injury, wrongful death, and certain other civil claims. It is generally not permitted in some categories of cases, such as criminal defense and most domestic relations matters, under longstanding ethical rules.
The Governing Ethical Rule
Attorney fees in Georgia are governed by the Georgia Rules of Professional Conduct, adopted by the Supreme Court of Georgia. Rule 1.5 addresses fees. It prohibits a lawyer from making an agreement for, charging, or collecting an unreasonable fee or an unreasonable amount for expenses.
Rule 1.5 lists factors used to evaluate whether a fee is reasonable. These include the time and labor required, the novelty and difficulty of the questions involved, the skill needed, the fee customarily charged in the locality for similar services, the amount involved and the results obtained, time limitations imposed, the nature and length of the professional relationship, the experience and ability of the lawyer, and whether the fee is fixed or contingent.
Rule 1.5 also sets specific requirements for contingency fee agreements, discussed below.
Written Agreement Requirement
Under Rule 1.5, a contingency fee agreement is required to be in writing. The written agreement must state the method by which the fee is to be determined. This includes the percentage or percentages that accrue to the lawyer in the event of settlement, trial, or appeal. It is common for an agreement to provide a lower percentage if the matter resolves before a lawsuit is filed and a higher percentage if the matter requires litigation or an appeal, reflecting the additional work and risk.
The agreement must also address litigation and other expenses to be deducted from the recovery and whether those expenses are deducted before or after the contingent fee is calculated. The order of these calculations affects the net amount, so the rule requires it to be specified.
Rule 1.5 further provides that, at the conclusion of a contingent fee matter, the lawyer is to provide the client with a written statement showing the outcome and, if there is a recovery, showing the remittance to the client and the method of its determination.
Typical Percentage Ranges
Georgia does not set a fixed contingency fee percentage by statute. The percentage is a matter of agreement between the attorney and client, subject to the reasonableness limit in Rule 1.5. In Georgia personal injury practice, contingency fees commonly fall within a range often described as roughly one third to forty percent of the recovery, with the figure frequently tied to the stage at which the case resolves. Because the percentage is negotiated and disclosed in the written agreement, the specific figure varies from one matter and one firm to another.
Costs and Expenses Distinguished From the Fee
A contingency fee agreement distinguishes the attorney fee from case expenses. Expenses are out-of-pocket costs incurred to pursue the case, such as court filing fees, charges for medical records, deposition costs, and expert witness fees. The fee is the compensation for the lawyer’s services.
In many contingency arrangements, the attorney advances case expenses during the litigation. How those advanced expenses are repaid, and whether their repayment depends on a recovery, is addressed in the written agreement. Because expenses and the fee are calculated separately, the agreement’s statement of whether the fee is computed before or after expense deduction is significant to the client’s net result.
The Reasonableness Limit in Practice
Even where a percentage is agreed in writing, Rule 1.5 continues to require that the overall fee be reasonable. A fee that would consume most or all of a recovery, leaving the client with little, can raise a reasonableness concern under the rule. The reasonableness standard operates as an outer limit on what may be charged or collected, separate from the agreed percentage.
Key Points
A contingency fee ties the attorney’s compensation to the recovery in the case, with no attorney fee typically owed if there is no recovery. In Georgia, attorney fees are governed by Rule 1.5 of the Georgia Rules of Professional Conduct, which prohibits unreasonable fees and lists factors for assessing reasonableness. Rule 1.5 requires a contingency fee agreement to be in writing, to state how the fee is determined including percentages for settlement, trial, and appeal, and to address how expenses are handled. Georgia does not fix a percentage by statute, though personal injury contingency fees commonly fall in a range of roughly one third to forty percent. Case expenses are distinct from the attorney fee, and the reasonableness limit applies as an overarching constraint.
Disclaimer
This article is provided strictly for general educational and informational purposes. It is intended to explain how Georgia law works as a matter of public legal education, and it does not constitute legal advice, a legal opinion, or a recommendation about any particular course of action. Reading this article, or contacting the website on which it appears, does not create an attorney-client relationship between the reader and any law firm, attorney, or author.
The law changes over time. Statutes, regulations, court rules, and judicial decisions discussed here may have been amended, repealed, superseded, or reinterpreted after the date of publication, and citations to specific code sections or cases reflect the law only as it was understood when this article was written. The application of any legal principle also depends heavily on the specific facts and circumstances of an individual matter, and outcomes vary from case to case.
For these reasons, no one should rely on this article as a substitute for advice from a licensed Georgia attorney who can review the particular facts involved. The author and publisher make no warranty, express or implied, regarding the accuracy, completeness, timeliness, or applicability of the information provided, and disclaim any liability for any action taken or not taken based on this content.