Contingent fee agreements must be in writing to protect both clients and attorneys.

Contingent Fees: What Really Matters and Why the Writing Bit Is Non-Negotiable

If you’ve spent any time around lawyers, you’ve probably heard about contingent fees—the kind of arrangement where payment depends on winning the case or hitting a specific result. It’s a concept that can feel a bit slippery at first glance: “What if we win big? How much do I owe?” Yet when you peel back the layers, the rule that stands out is simple and clear: contingent fees must be agreed upon in writing. Let’s unpack what that means in a way that sticks, especially for anyone studying for the MPRE and trying to understand how ethics shape real-world fee arrangements.

What exactly is a contingent fee?

Think of a contingent fee as a payment that rides on the outcome. Instead of paying a lawyer by the hour up front, the client and the attorney agree that the lawyer’s fee will be a percentage of the recovery if there’s a successful result. For many civil matters, that is a practical and attractive framework. It aligns the attorney’s incentives with the client’s goals and, in theory, helps people who might not have the funds to pay a lawyer upfront.

But here’s the important contrast: not every case or area of law can use a contingent fee, and not every percentage is fair game. The ethical landscape around these agreements is there to prevent surprise charges, unfair bargaining, or conflicts of interest that could undermine a client’s best interests.

The bottom line (the one the MPRE wants you to remember)

The true statement about contingent fees is straightforward: they must be agreed upon in writing. That single rule is the anchor for transparency, accountability, and trust between lawyer and client. It’s the counterweight to the power imbalance that can appear when money is on the table.

Why the writing requirement matters so much

• Clarity and consent: A written agreement spells out exactly how the fee will be calculated, when it’s earned, and what happens if the matter settles early or if costs are involved. Verbal promises can drift, especially in the heat of a tense case.

• Protection for both sides: Clients want to know their potential financial exposure; lawyers want to ensure there’s a clear path to payment that won’t breed disputes after the case closes. Written terms reduce the risk of miscommunication or later quarrels over what was promised.

• Compliance with ethical rules: Various rules and guidelines emphasize clear communication about fees. A written agreement serves as documentation that the attorney has disclosed the arrangement and that the client has had a real chance to review and understand it.

• Focus on fairness: The writing requirement isn’t just about form; it’s about substance too. The percentage needs to be reasonable, not arbitrary or capricious, and it should reflect the complexities of the case, the risks taken by the lawyer, and the client’s circumstances.

Why the other options on the MPRE-style question don’t hold up

• A. “They are always set in advance without exceptions.” That’s tempting as a neat line, but it isn’t correct. Contingent fees can be adjusted or renegotiated in certain circumstances, and the truth is more nuanced. The key point is that even when a contingency is established, it must be documented in writing.

• B. “They can be based on arbitrary percentages.” The word “arbitrary” is the red flag here. A percentage that’s truly arbitrary undermines fairness and transparency. Fees must be reasonable and clearly stated, not left to whim or caprice.

• D. “They can include additional undisclosed fees.” Right away, this clashes with the ethics of open communication about fees. Undisclosed charges are exactly what the written agreement is meant to prevent. Anything beyond the base contingent fee should be disclosed, described, and agreed to in writing.

What should a proper contingent-fee writing look like?

Here are the essentials you’d expect to see in a compliant agreement:

• The amount or method for calculating the fee: A clear percentage of the recovery and how it’s determined (gross vs. net recovery, reduction for costs, etc.).

• What constitutes the “recovery”: Is it monetary compensation, settlement, or judgment? Does it include awarded costs, interest, or expenses?

• Responsibility for costs and expenses: Will the client be asked to pay out-of-pocket expenses regardless of the outcome? If the lawyer advances costs, how and when those are repaid?

• Handling of settlements that don’t involve a full victory: If the case settles for less than the maximum, how does that affect the fee? What about cases where the client pays out of pocket in addition to the contingency?

• Time limits and expiration: When does the agreement terminate, and what events might trigger changes to the fee arrangement?

• Termination and continuation: If the relationship ends early, what happens to the fee? Are there early-termination fees, or a pro rata calculation?

• Signatures and acknowledgment: Both sides should sign, acknowledging they understand and accept the terms. Acknowledgment isn’t just a formality—it’s a shield against later disagreements.

A practical tip for readers

If you’re ever in a position to review such an agreement, read it like you’d read a contract for a big-ticket purchase. Look for terms you don’t understand and ask for plain-language explanations. If something sounds vague, push for specificity. And yes, your gut is a useful guide—if a clause feels off, it deserves a closer look.

A brief digression that actually helps with exam-type thinking

On the MPRE, you’ll encounter scenarios where you need to identify whether a fee arrangement complies with the rules. The writing requirement isn’t a trivia question; it’s a lens. If a fact pattern has a contingent-fee element, your instinct should be to check for (1) a written agreement, (2) a reasonable fee, and (3) a clear explanation of who pays what. If any of those elements are missing or murky, the arrangement isn’t compliant. It’s that simple in principle, even if the real-world cases get messy.

Common-sense boundaries that keep the picture honest

• Contingent fees are generally associated with civil cases. They’re not a free-for-all in every type of matter. If a case falls into categories where fixed, hourly, or other fee structures are more appropriate, the ethical calculus shifts.

• Reasonableness isn’t optional. The fee has to be fair given the work, the risk, and the results obtained. If a percentage seems outsized for the effort or the likelihood of success, it’s a red flag—even if it’s written down.

• Transparency about ancillary charges matters. If there are expenses that the client will cover regardless of outcome (court costs, expert fees, filing fees), those should be spelled out. Hidden costs undermine trust and violate the spirit of a clear agreement.

How this plays out in real life (a quick, relatable scenario)

Imagine a client with a civil dispute seeking recovery. The attorney proposes a 30% contingent fee of the recovery. They put it in a written agreement, specify that costs are deducted from the recovery, and outline what happens if the case settles early or if the client wins a judgment after trial. The client signs after reading the terms, perhaps adds a line about the attorney’s obligation to keep the client informed about major developments, and—crucially—the client knows exactly what to expect if the case goes to trial and yields a substantial recovery, a modest one, or no recovery at all.

That kind of clarity—handshake or not—builds trust and reduces the chance of disputes later on. It’s not just bureaucratic box-ticking. It’s a practical safeguard that helps both sides sleep a little easier when the stakes are high.

Putting it all together: the takeaway you can carry

• The true statement about contingent fees is that they must be agreed upon in writing. That’s the anchor principle.

• The writing requirement protects both client and attorney by ensuring transparency, reasonableness, and a clear path for what happens when outcomes arrive.

• The other options in exam-type questions are traps: they tempt you with absolutism (always, never), fuzziness (arbitrary percentages), or opacity (undisclosed fees). Don’t fall for them—look for the essential written agreement and the related terms.

• When you’re assessing a contingent-fee arrangement, check for clarity on what’s being charged, how it’s calculated, who pays which costs, and what happens if the case settles or goes to trial.

• In your notes and study guides, keep a simple mental checklist: is it in writing? is the fee reasonable? are all costs disclosed? If yes to all three, you’re aligned with the ethical framework that governs these agreements.

A final thought, with a touch of warmth

Fee conversations can feel a bit dry, almost clinical. But they’re really about fairness and trust at the core. A well-drafted contingent-fee agreement isn’t a trapdoor; it’s a map. It helps everyone navigate the journey from the first consultation to the moment a client sees the recovery—the moment when all those efforts finally translate into tangible relief or relief of a different kind. And that’s the kind of clarity that makes the legal process feel a little less overwhelming and a lot more human.

If you’re dissecting this topic for the MPRE, remember the central question you should be able to answer: is there a written contingent-fee agreement, and does it spell out the fee, the scope, and the expenses clearly? If you can answer that, you’re already well on your way to understanding how professional responsibility guides fee arrangements in the real world.