New York Contingency Fee Rules: Caps, Agreements, and Approval

Contingency fees in New York are governed by rules that most clients never see until they’re staring at a retainer agreement. The state sets specific percentage caps by case type, requires the agreement to be in writing with defined disclosures, and lets judges review or cut the fee even after you sign. The New York contingency fee rules also give you a choice between two fee schedules in personal injury cases and a choice between two methods of calculating expenses, both of which change what you actually take home.

When a Contingency Fee Is Allowed

Contingency arrangements, where the lawyer only gets paid if you win or settle, are permitted in most civil cases. Personal injury, wrongful death, and medical malpractice are the common ones. The trade-off is straightforward: no upfront legal fee, but the lawyer takes a percentage of whatever you recover.

Two categories are off-limits. New York’s Rules of Professional Conduct prohibit contingency fees in criminal defense and in most domestic relations matters, so a lawyer cannot tie their fee to whether you get a divorce, win custody, or secure a particular level of support or property division.¹ If a lawyer offers you a contingency deal in either of those areas, something is wrong.

The Percentage Caps for Personal Injury and Wrongful Death

For personal injury and wrongful death cases that don’t involve medical malpractice, you pick one of two fee schedules at the time you sign the retainer.²

Schedule A is a sliding scale:

50% of the first $1,000 recovered
40% of the next $2,000 recovered
35% of the next $22,000 recovered
25% of anything above $25,000

Schedule B is a flat rate of no more than 33⅓% of the total recovery.

On very small recoveries, Schedule A gives the lawyer more than one-third. On larger recoveries, Schedule B usually costs the client more. The retainer agreement must lay out both options, explain the financial consequences of each, and clearly record which one you chose.³

If a case is unusually complex and the attorney believes Schedule A doesn’t provide adequate compensation, the attorney can ask a judge for a higher fee. The court grants the request only on a finding of extraordinary circumstances, and the fee can never exceed whatever the retainer originally set.²

The Medical Malpractice Sliding Scale

Medical, dental, and podiatric malpractice cases have their own statutory cap under Judiciary Law § 474-a. The percentage drops as the recovery grows:⁴

30% of the first $250,000
25% of the next $250,000
20% of the next $500,000
15% of the next $250,000
10% of anything above $1,250,000

On a $2 million malpractice recovery, the maximum fee under this schedule is $287,500, roughly 14.4%. A standard one-third fee on the same recovery would be $666,667. The sliding scale is why the numbers diverge so sharply on larger malpractice cases.

An attorney who believes extraordinary circumstances justify more can petition the trial court by affidavit, with written notice to the client. The client’s consent alone is not enough to override the statutory cap, and any approved fee still cannot exceed the retainer.⁴

Net vs. Gross: How Expenses Change What You Take Home

The percentage is only half the calculation. The other half is whether the attorney’s cut comes off before or after litigation expenses like expert witnesses, filing fees, and investigation costs. New York gives the client the choice, and it makes a real difference.

Under the net method, expenses come out of the recovery first, and the attorney’s percentage is calculated on what remains. Under the gross method, the attorney’s percentage is calculated on the full recovery before expenses, but this option is only available when the attorney has agreed to pay the costs and expenses of the action.³

A worked example on a $100,000 recovery with $10,000 in expenses and a 33⅓% fee:

Net method: $100,000 minus $10,000 leaves $90,000. The fee is $30,000. You take home $60,000.
Gross method: The fee comes off first at $33,333. Then expenses come out. You take home $56,667.

The retainer must describe both methods, explain the financial consequences of each, and clearly indicate your selection. One point that surprises clients: liens from hospitals, medical providers, and insurance carriers are not deducted when computing the fee percentage under either method. Those liens come out of your share, after the attorney’s fee has already been calculated.³

What the Written Agreement Has to Contain

Every contingency arrangement in New York must be in writing. Rule 1.5(c) requires the attorney to promptly give the client a document that states the fee percentages at each stage of the case, including settlement, trial, and appeal, which litigation expenses will be deducted, and whether those expenses come out before or after the fee is calculated.¹

If your retainer skips any of these elements, or buries them in a way that obscures the choice you’re supposed to be making, that’s a problem for the attorney and a warning sign for you. Courts hearing later fee disputes look first at whether the written agreement complies with the rule.

When a Judge Has to Approve the Fee

Several categories of cases require active judicial review of the attorney’s compensation, and the client’s signature on the retainer doesn’t substitute for court approval.

Infants and Judicially Declared Incapacitated Persons

When a minor or a person who has been judicially declared incapacitated settles a claim, the court must approve both the settlement amount and the attorney’s fee. The fee cannot exceed one-third of the recovery after disbursements unless the court specifically authorizes more.⁵ The application goes to the judge who presided over the compromise, or the assigned judge if the case settled out of court.⁶

Wrongful Death

Under EPTL § 5-4.6, wrongful death compromises require court approval of both the settlement and the fee before any funds are distributed. The judge inquires into the merits and decides whether the compromise is adequate.⁷

Reasonableness Review in Any Case

Outside these mandatory categories, a court can still step in if the client challenges the fee’s reasonableness. Judges look at the time and labor involved, the difficulty of the case, the results achieved, and the fee customarily charged in the area for similar work.¹ A case that settled quickly with minimal effort can produce a reduced fee even where the percentage on the retainer was within the schedule.

Settlement Decisions Stay With You

A contingency arrangement does not give your lawyer authority to settle the case. Under Rule 1.2(a), the decision to accept or reject any settlement offer is yours. Your attorney can recommend and advise, but cannot agree to a deal without your explicit consent. Worth flagging because the economics of a contingency case can push in one direction: an attorney carrying expenses and working without guaranteed pay may want to settle sooner than you do. The rule is clear that it’s your call.

Firing the Attorney Before the Case Ends

You can fire a contingency fee attorney at any time, for any reason. That doesn’t mean you owe nothing. Judiciary Law § 475 gives the attorney a charging lien that attaches to the claim from the start of the representation and follows it through settlement or judgment; a deal between you and the opposing party can’t wipe it out.⁸

What the discharged attorney can collect is limited to quantum meruit, the reasonable value of work actually performed, rather than the full contingency percentage. Courts weigh case complexity, work completed, skill required, and the eventual result. If you hire a new contingency lawyer, you can end up effectively paying two attorneys out of the same recovery, the former one’s quantum meruit share plus the new one’s percentage. Ask about that math before switching.

If You Think the Fee Is Wrong

New York’s Fee Dispute Resolution Program under 22 NYCRR Part 137 is the standard path. It covers civil fee disputes where the amount at issue is between $1,000 and $50,000, though the parties can consent to arbitration outside that range. It doesn’t cover criminal matters or fees already set or approved by a court.⁹

The structural advantage for clients: if you request arbitration, the attorney has to participate. It’s mandatory for the lawyer, not for you. The award is final and binding unless either side requests de novo review, essentially a fresh trial in court, within 30 days.⁹

Disputes outside Part 137’s scope, or that involve allegations of serious misconduct, go to the Attorney Grievance Committee for the Appellate Department covering the lawyer’s office location. The committee investigates complaints about lawyer conduct, including improper fee arrangements and deceptive billing.¹⁰ Charging above the schedules without court authorization is specifically defined as unreasonable and unconscionable compensation, and a violation of the Rules of Professional Conduct.²

1
Legal Information Institute. New York 22 NYCRR 1200.1.5 – Fees and Division of Fees
2
Legal Information Institute. New York 22 NYCRR 1015.15 – Contingent Fees in Claims and Actions for Personal Injury and Wrongful Death
3
New York State Unified Court System. 22 NYCRR 1015.15 – Contingent Fees in Claims and Actions for Personal Injury and Wrongful Death
4
New York State Senate. New York Code Judiciary Law 474-A – Contingent Fees for Attorneys in Claims or Actions for Medical, Dental or Podiatric Malpractice
5
Legal Information Institute. New York 22 NYCRR 202.67 – Infants and Incapacitated Persons Claims and Proceedings
6
New York State Senate. New York Code CPLR 1207 – Settlement of Action or Claim by Infant, Judicially Declared Incompetent or Conservatee
7
New York State Senate. New York Estates, Powers and Trusts Law 5-4.6
8
New York State Senate. New York Code Judiciary Law 475 – Attorneys Lien in Action, Special or Other Proceeding
9
New York State Unified Court System. Part 137 – Fee Dispute Resolution Program
10
New York State Unified Court System. Complaints About Attorneys