How do contingency fees actually work in California?

The basic arrangement

The firm is paid a percentage of what it recovers, and nothing if it recovers nothing. Some agreements step the rate up if a lawsuit is filed and again if the matter goes to trial, so a single quoted percentage may not tell you the whole range.

In ordinary injury cases the rate is not set by law and is negotiable — California requires the written agreement to say so (Business and Professions Code § 6147). The main exceptions: in medical malpractice cases, fees are capped at 25% of a recovery settled before a lawsuit or arbitration demand is filed and 33% after, with a higher fee possible only by court or arbitrator approval for good cause if the case is tried or arbitrated (B&P Code § 6146, as amended by AB 35, effective January 1, 2023); workers' compensation fees must be reasonable as determined by the Workers' Compensation Appeals Board (Labor Code § 4906); and fees paid from a minor's recovery need court approval (California Rules of Court, rule 7.955).

Costs are separate from the fee

Filing fees, record retrieval, expert reports, deposition transcripts, service and investigators are case costs. They are usually advanced by the firm and reimbursed from the settlement, and they are additional to the percentage.

Ask explicitly whether you owe costs if the case is lost. Practice varies, and it should be in writing.

The clause that decides your net

Whether the percentage applies to the gross settlement or to the settlement after costs are deducted. The difference is the fee percentage applied to the costs, which on a case that went to experts can be a substantial sum. California requires the contingency agreement to state how costs will affect the fee and your recovery (B&P Code § 6147(a)).

Both arrangements are lawful and common. The point is to know which you agreed before you sign — it is far easier to discuss then. The agreement must be in writing and signed by both of you, with a copy for you; if it does not meet the statute's requirements you can void it, and the lawyer is then limited to a reasonable fee (B&P Code § 6147).

Model it before you sign

The fee calculator shows both orderings side by side with your own figures, along with costs and liens. Five minutes there makes the retainer conversation concrete.

Common questions

Can I negotiate the percentage?

Yes, and it is a normal conversation before signing. Leverage tends to be greatest where liability is clear and the case is likely to settle without suit.

What if I want to change firms mid-case?

You generally can — a client may discharge a lawyer at any time. The first firm is then generally limited to the reasonable value of its work, payable only if the case recovers (Fracasse v. Brent (1972) 6 Cal.3d 784). That claim is often resolved between the firms out of the eventual recovery; ask the new firm how any split will work before you switch.

What if I think the final fee is wrong?

California has a fee arbitration program that is voluntary for the client but mandatory for the attorney if the client requests it (B&P Code § 6200(c)); it is usually run by the local bar association. If your lawyer sends you a Notice of Client's Right to Fee Arbitration, you generally have 30 days to request it (B&P Code § 6201(a)). See the State Bar's fee dispute page and our fee dispute overview.

Official sources

About this guide
Last reviewed September 2026 by the LA Law Hub editorial team against the official sources listed above. Laws, court rules, fees and local ordinances change, and how they apply depends on facts this guide cannot know. LA Law Hub is not a law firm. This guide is general information, not legal advice, and reading it does not create an attorney-client relationship. For advice about your own situation, speak with a lawyer licensed in California.

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