Most personal injury lawyers in both Canada and the United States work on contingency: no money up front, and the fee is a percentage of whatever the case recovers — commonly somewhere in the range of one-quarter to forty percent depending on jurisdiction, stage, and risk. If the case recovers nothing, no fee is owed. The arrangement exists for a good reason — it lets injured people with no savings hire the same calibre of counsel an insurer faces from corporate defendants — but the details vary meaningfully between retainer agreements, and the details are where clients get surprised. Ten minutes of understanding before signing prevents all of the common surprises.
How the percentage works, and what moves it
The fee is a slice of the recovery — settlement or judgment — calculated per the retainer agreement. Percentages vary by market and case, and many agreements use tiers that rise with the stage at which the case resolves: a lower rate if it settles before a lawsuit, higher after filing, higher still at trial, reflecting the work and risk each stage adds. Jurisdiction matters too: several Canadian provinces and US states regulate contingency arrangements — capping percentages for some case types, requiring specific written disclosures, or (as in Ontario) mandating standardized retainer language and requiring that the percentage be applied in a prescribed, transparent way. A reputable firm will explain exactly how the number was set and show you the calculation method in the agreement itself, not in conversation.
Disbursements: the part "no fee" doesn't cover
Building an injury case costs real money before any recovery exists: medical records fees, expert reports (often the largest item — thousands of dollars for medical or engineering opinions), court filing fees, process servers, transcripts. These disbursements are separate from the lawyer's fee, and agreements differ on them in two ways that matter. Who advances them: most contingency firms front disbursements and recoup them from the recovery, but confirm it. And what happens on a loss: some agreements waive disbursements if the case fails; others leave the client responsible for them even though no fee is charged — a materially different risk that belongs in your decision, in writing, before signing. Ask the question directly: "If we recover nothing, what exactly do I owe?" The answer should be specific and in the agreement.
The arithmetic, worked honestly
- Recovery: say $100,000 settled pre-litigation under a one-third fee
- Fee: $33,333 (plus applicable taxes on fees in Canada — GST/HST applies to legal fees)
- Disbursements recouped: say $4,000 for records and one expert report
- Client nets: roughly $62,000–$63,000 depending on tax treatment and the agreement's ordering
- The ordering matters: fee calculated before or after disbursements changes the net — the agreement must say which
Run this arithmetic with the firm for your own numbers before signing, including a low-recovery scenario. Any firm unwilling to walk through a worked example is telling you something. Most are very willing — transparent fee conversations are, increasingly, how good firms distinguish themselves from the billboards.
Why represented claimants usually net more anyway
The natural question: if the lawyer takes a third, would I do better alone? The consistent answer from settlement studies and insurer data on both sides of the border is no, for most injury claims of any seriousness — represented claimants recover substantially more on average, enough that the net after fees exceeds typical unrepresented settlements. The mechanism is not mysterious: insurers price offers against the credible threat of trial, valuation of pain-and-suffering and future losses is specialized knowledge, and unrepresented claimants systematically miss heads of damage — future care, income-loss calculations, subrogated claims — that professionals capture. Contingency also aligns incentives in the client's favour: the firm's fee grows only if the recovery does. For genuinely minor claims — a small, resolved injury with minimal losses — a lawyer may honestly tell you representation isn't economic; that honesty is itself a good sign of the firm.
The questions to ask before signing anything
Treat the retainer conversation as your due diligence: What is the percentage, and does it tier by stage? Is it calculated before or after disbursements? Who advances disbursements, and what do I owe if we lose? Are there caps or regulatory requirements in this jurisdiction, and does this agreement follow them? Who at the firm will actually handle my file, and how will I get updates as the claim progresses? What happens to the fee if I change lawyers mid-case? Every one of these has a clean answer at a well-run firm, and the meeting where you ask them is free — nearly all personal injury consultations are. The contingency system, understood clearly, is one of the fairest fee structures in law: the firm bets its time on your case, and pays for its own optimism when it's wrong. Just make sure the version you sign is the version you understood. One last practical note: retainer agreements can be taken home. If a firm pressures you to sign in the room, at a first meeting, while you are injured and overwhelmed, that pressure is information about the relationship ahead. Good firms encourage the overnight read — they know their agreement survives scrutiny, and they would rather have a client who understood the deal than one who merely signed it.
Frequently Asked Questions
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