Attorney compensation in settlement agreements typically hinges on a pre-negotiated arrangement between the lawyer and client. A common fee structure is a contingency fee, where the lawyer receives a percentage of the total recovery amount. This percentage is agreed upon at the outset of the representation. For instance, if the agreement stipulates a 33.3% contingency fee and the settlement is $100,000, the attorney would receive $33,300 before expenses are deducted.
The agreed-upon portion is often dictated by several factors, including the complexity of the case, the resources required for investigation and litigation, and the potential risk assumed by the lawyer. Historically, contingency fees have provided access to justice for individuals who might otherwise be unable to afford legal representation, as the lawyer’s payment is contingent upon a successful outcome. This arrangement incentivizes diligent advocacy on the part of the legal professional.