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The Contingency Fee - What It Means and how Employment Disputes May Allow You to Keep More (or all) of Your Award

Posted by Caleb A. Miller | Jun 08, 2022 | 0 Comments

Like our firm, most Plaintiff's lawyers will charge a "contingency fee" for their services. A Contingency Fee is an agreement that the attorney will collect a percentage of the award they win for you, assuming they do win. When you pass that billboard that says, "If we don't win, you don't pay!", that is because they offer contingency fee services. It is entirely common for law firms to charge anywhere from 25% all the way to 50% of the award they win for you in court or through settlement of your claims with the employer. 

Let's say your attorney settles the case for $100,000. Before you start counting the money, keep in mind your agreement to pay 40% of the award to your attorney. This will result in you personally receiving only $60,000. Now, these agreements will require you to pay the out of pocket costs the firm assumed in taking your case to court. After filing with the Court and paying filing fees, maybe a court reporter, transcript services, experts and countless other costs, you may end up with less than half of the award that was won. 

Contingency fees may also elevate or decrease based on meeting certain conditions within a case after it begins. Some attorneys will move the contingency fee as the case moves from one phase to another (i.e. from pre-litigation to trial). 

Some lawyers will even decrease their contingency fee after receipt of the award if after the costs of suit are returned to the attorney, they end up with more of your award than you do. It is important to discuss with your attorney the added costs of suit that can be reasonably expected in a case as these costs will likely be reimbursed from your portion of the award.

What Happens if My Lawyer Loses?

On a contingency fee basis, the attorney will not be able to get paid if they do not win any money for you. You only pay, when your lawyer wins. If the lawyer is not able to get any money for you, then the lawyer does not get paid. This "merit" system on contingency fee cases creates a powerful incentive for your attorney to provide the best work possible to deliver the greatest outcome. 

Why isn't every lawyer hired on Contingency?

Not all lawyers can be hired on contingency and not every type of law results in a money award. The goals for attorneys in a criminal case are different than the goals in a civil one. There couldn't be a contingency fee in a criminal defense matter because there is no money to be won. This also holds true for most civil defense, employment law for example, as the Company does not often counter sue for damages against the employee and so there are no damages to collect for their attorneys. They have to work on an hourly basis. Family Law attorneys are prohibited by law from collecting a contingency fee. 

Why Can't I find a Lawyer to Take my Case on Contingency?

One disadvantage of a contingency fee matter is that an attorney only gets paid if they can obtain a recovery for you and they may not take a case that they believe is too high risk or would require a significant amount of work when damages are not very apparent. However, most attorneys are more than happy to share their opinion of your case and it can be useful to hear alternative dispute resolutions other than getting an attorney involved to resolve cases where damages are just not apparent or they are dealing with a Defendant that simply has no money. 

If you can't find an attorney to take your case on a contingency fee, this is a clear sign that you don't have a good case.

My Dispute is Against My Employer. Will My Employer Pay My Attorney's Fees?

It is very possible. Many attorneys will allow an offset of their attorney's fees based on what they are able to collect in court on a motion for attorney's fees. This is a request to the Court for the Defendant, or in this case your employer, to pay the attorney's fees directly so that you may keep more or all of your award. Up to a 100% recovery for you. 

The California Labor Code statutes provide for attorney's fees in many instances. Here are a few major examples:

The Fair Employment and Housing Act

The Fair Employment and Housing Act ("FEHA"), encompasses most of your claims involving discrimination (to include discrimination based on age, disability, race, pregnancy, religion, sex or gender and any other protected classification), harassment and retaliation, to include sexual harassment and quid pro quo sexual harassment. The language of the law provides that "in its discretion, . . . reasonable attorney's fees and costs, including expert witness fees . . ." (Government Code section 12965(b)) may be awarded to the prevailing party, or the Plaintiff who won the case. However this works both ways. Kind of. The Court in Williams v. Chino Valley Independent Fire District (2015) 61 Cal.4th 97 held that a prevailing Plaintiff should receive fees and costs while a prevailing defendant should only be awarded fees and costs if the case was found to be frivolous or otherwise without any merit. 

Your employer may have attempted to circumvent this standard by providing for an employment agreement or arbitration agreement with a fee shifting provision. A Fee shifting provision is a provision in a contract that awards the prevailing party per the terms of the contract, in an attempt to avoid the asymmetrical standard provide by the FEHA. However,  the Court in Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387, set the rule that the recovery of attorney's fees and costs in arbitration or otherwise was unconscionable. Meaning that particular provision is null and void, and employers cannot use the threat of these added costs and fees against you in order to deter you from filing your otherwise legitimate claim. 

Nonpayment of Wages

California Labor Code section 218.5 states that a prevailing Plaintiff can recover attorney's fees in "any action for the nonpayment of wages." Nonpayment of Wages includes any unpaid overtime, off the clock work, unpaid minimum wage and wages lost due to timekeeping errors or rounding. However, as some employees understand but is rarely conveyed to them, if an employer causes you to miss your meal period (lunch break) or rest period (rest break), the meal and rest period premium payment of one hour of your regular rate of pay to be given to the employee does not require attorney's fees be made. 

Labor Code section 1194 specifically provides for attorney's fees and costs when recovering unpaid overtime or minimum wage compensation, including interest on those wages from the time they were owed until the time they are awarded to you in Court.  


Labor Code section 2802 requires employers to reimburse employees for all necessary business expenses. If an employer has failed to reimburse their employee for their necessary expenses in the performance of their duty, the Labor code provides for all reasonable costs and attorney's fees incurred by the employee in enforcing the rights of their reimbursement as another necessary cost. This means, the fact that you even had to hire a lawyer just to be reimbursed for a NECESSARY business expense entitles you to have your attorney's fees paid for by the Company. 

I Signed an Arbitration Agreement, Can I still Sue in Court and Collect my Attorney's Fees?

Many employers require their employees to file for arbitration prior to filing a complaint in civil court. Although many of these agreements are not enforceable, to fight an otherwise enforceable agreement in the Courts comes at a cost. Recently the Court in Patterson v. Superior Court of Los Angeles County (filed October 18, 2021) 2021 S.O.S. 5749 found that a prevailing Defendant may recover its attorney's fees after successfully compelling arbitration. Having worked on the Defense side for years, our office understands that ties in a motion to compel arbitration often go to the Defendant. If you have an employment agreement or other arbitration agreement, bring it to the attention of your attorney before he files suit. There are many advantages to going straight into arbitration and if your case is solid, this could result in you getting paid faster. Keep in mind, there are new rules for the enforceability of arbitration agreements in sexual harassment matters, as discussed here.  

If you have a matter you would like to discuss with one our attorneys, do not hesitate to contact our office at Miller WIlmers APC, a Los Angeles California based Law Firm to schedule a free consultation and we will guide you through the process starting with the contingency fee retainer and explain every detail of how we get paid, at no cost to you. 

About the Author

Caleb A. Miller

Caleb A. Miller is a Marine Corps Veteran and founder of Miller Wilmers, APC.


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