CONTINGENT FEE

contingent fee.A fee charged for a lawyer’s services only if the lawsuit is successful or is favorably settled out of court. • Contingent fees are usu. calculated as a percentage of the client’s net recovery (such as 25% of the recovery if the case is settled, and 33% if the case is won at trial).— Also termed contingency fee; contingency; conditional fee. [Cases: Attorney and Client  146.C.J.S. Attorney and Client §§ 313, 319.]

reverse contingent fee.A fee in which a defense lawyer’s compensation depends in whole or in part on how much money the lawyer saves the client, given the client’s potential liability — so that the lower the settlement or judgment, the higher the lawyer’s fee. • For example, if a client might be liable for up to $2 million, and agrees to pay the lawyer 40% of the difference between $1 million and the amount of the settlement or judgment, then a settlement of $800,000 would

result in a fee of $80,000 (40% of the $200,000 under the threshold amount of $1 million). — Also termed negative contingent fee; defense contingent fee; reverse bonus. [Cases: Attorney and Client  146. C.J.S. Attorney and Client §§ 313, 319.] [Blacks Law 8th