Attorney fees and case costs: what to ask before signing

Start with three different amounts

When discussing a potential injury recovery, distinguish these figures:

• The total recovery: the amount obtained through settlement or judgment.
• The attorney fee: compensation for the legal work under the agreement.
• The client's distribution: the amount remaining after applicable fees, costs, and other obligations are addressed.

Medical bills and health-plan reimbursement claims may also affect the distribution. They are not automatically included in the lawyer's fee or ordinary litigation expenses. Ask for separate explanations so one percentage does not obscure several different deductions.

An advertised fee phrase or a consultation conversation cannot answer every term of the representation. Read the proposed agreement and ask that any important clarification be reflected in writing.

What a California contingency agreement should explain

Business and Professions Code section 6147 generally requires a written contingency agreement signed by the lawyer and client, with a duplicate provided to the client. It addresses the agreed rate, the effect of costs on the fee and recovery, and responsibility for related matters outside the agreement. The statute also addresses fee negotiability, with special provisions for certain claims.

Ask whether the rate changes if a lawsuit is filed, a trial begins, or an appeal is needed, and which exact event triggers any change. Some matters have additional legal limits or court-approval requirements. A general injury guide cannot tell you which rule applies to your agreement.

This article does not state ALG's rate or promise particular cost terms. The agreement offered for your case should supply those details.

Which expenses could be charged?

The State Bar's fees and billing guide describes expenses such as court filing charges, service of papers, expert work, and deposition-related charges. The mix depends on what the case requires.

Ask for an explanation that connects the potential expense to its purpose. Obtaining an existing record, hiring an expert to analyze a disputed issue, and paying to present testimony involve different decisions. A useful budget identifies what is likely soon, what is conditional, and what could materially increase if the matter goes further.

• Who pays an expense initially?
• When is the client expected to reimburse it?
• Are interest, administrative charges, or financing charges possible?
• Will the client be consulted before a major expense?
• Can the client receive an itemized cost ledger?

Ask how any estimate will be updated. An early estimate should not be mistaken for a guaranteed cap unless the agreement actually provides one.

Ask how the percentage is calculated

The order of deductions can change the result. Use a small hypothetical example during the consultation to make the agreement understandable.

Illustration only: Assume a $100,000 recovery, a purely hypothetical negotiated fee of 30%, and $10,000 in case costs. If the fee is calculated on the full recovery, the fee is $30,000 and $60,000 remains after those costs. If the same percentage is calculated after deducting costs, the fee is $27,000 and $63,000 remains.

These figures are not ALG's terms, a standard rate, or a prediction of any case value. They omit medical balances, reimbursement claims, and other possible obligations. Their only purpose is to show why the calculation method belongs in the written agreement.

What happens if there is no recovery or representation ends?

Ask separately about fees and expenses if the case is unsuccessful. An agreement may treat them differently. The phrase no attorney fee unless there is a recovery does not, by itself, explain every possible cost obligation.

Also ask what happens if you choose to change counsel, end the representation, or disagree about continuing the case. The legal analysis can depend on the circumstances and contract. Avoid assuming that ending the relationship either erases every obligation or automatically makes a particular sum due.

Clarify whether the proposed work includes property damage, an appeal, a related benefits dispute, or enforcing a judgment. If another matter is outside the scope, ask how it will be handled and whether a separate agreement would be needed.

Review the accounting before funds are distributed

Request an itemized explanation showing the recovery, fee calculation, expenses, third-party payments, and any amount held while an issue is resolved. Ask which figures are final and which are estimates.

If a deduction is unclear, identify the line and ask for its basis. For a medical reimbursement claim, ask who is asserting it and whether its amount has been verified. For a case expense, ask for the ledger entry and supporting explanation.

Keep the signed agreement, amendments, major cost approvals, settlement documents, and final accounting together. Those records make it easier to understand the result and address a question later.

Bring a short consultation checklist

Before signing, make sure you can explain the agreement in your own words: what work is covered, how the fee is calculated, which expenses you may owe, what happens without a recovery, and how you receive updates. Ask for enough time to read unfamiliar terms.

A clear fee conversation should help you make an informed decision about representation. It should also leave a written record both sides can use as the case progresses.