📌 Key Takeaway: How case costs are deducted relative to the attorney fee can create a real dollar difference — on a $100,000 settlement with $5,000 in costs, a "fee-before-costs" agreement nets $62,000 while "costs-before-fee" nets $63,650.

The Two Calculation Methods

  • Fee-before-costs: The attorney's percentage is calculated on the full settlement first, then case costs are deducted from what remains.
  • Costs-before-fee: Case costs are deducted from the settlement first, then the attorney's percentage is calculated on the smaller remaining amount.

Costs-before-fee is generally more favorable to the client, since the percentage fee applies to a smaller base amount — worth specifically asking which method your agreement uses before signing.

A Worked Example

On a $100,000 settlement with a 33⅓% contingency fee and $5,000 in case costs: Fee-before-costs = $100,000 × 33.3% = $33,333 fee, then minus $5,000 costs = $61,667 net to attorney costs deducted, client receives roughly $62,000. Costs-before-fee = $100,000 - $5,000 = $95,000, then × 33.3% = $31,635 fee, client receives roughly $63,650. A real, meaningful difference from one contract clause.

Why This Detail Gets Overlooked

Clients naturally focus on the headline percentage (33% vs. 40%) since it's the number most prominently discussed, while the calculation method — often buried in contract language — can swing the actual take-home by a comparable amount. Both details deserve equal attention before signing.

Frequently Asked Questions

Is one calculation method more common than the other?

Practices vary by firm and jurisdiction — there's no universal standard, which is exactly why it's worth asking directly rather than assuming a specific method applies to your agreement.

Can I negotiate the contingency percentage itself?

Sometimes, particularly for cases with very high expected recovery values or straightforward liability — though the 33⅓%/40% structure is a well-established industry standard that many firms don't deviate from significantly.

🔎 How we research: The ServiCover Editorial Team compiles prices and guidance from published 2026 cost guides, manufacturer information and industry sources. Prices are national ranges and vary by location, home and provider, so always compare written quotes. We don't perform the work ourselves, and we may earn a commission when you request quotes through our partners — see our Advertiser Disclosure.