Contingency Fees in Texas: What Do I Owe If My Case Is Lost?

Under a contingency fee agreement, the attorney’s fee is owed only if money is recovered for the client. If the case does not result in a settlement or court award, the attorney typically collects no fee for the time and work invested. That is the core promise of a contingency arrangement.

However, attorney fees and advanced case expenses are two legally distinct categories under Texas law. Expenses the attorney advanced on the client’s behalf, such as court filing costs, expert witness charges, and medical record fees, may remain the client’s responsibility even when the case is lost, depending on the exact terms of the written fee agreement. Reading and understanding that agreement before signing is the single most important step any prospective client can take.

Legal Snapshot

Jurisdiction	State of Texas
State	Texas
City / Region	Dallas, TX (DFW Metro)
Case Type	Personal Injury
Legal Topic	Contingency Fee Agreements; Attorney Fees; Case Expenses
Case Stage	Pre-engagement / Retention
Primary Legal Issue	Distinction between attorney fee and advanced case expenses under a contingency arrangement
Primary Authority	Texas Disciplinary Rules of Professional Conduct, Rule 1.04 (Fees) [1]
Date Legal Authority Last Reviewed	July 2025

What Is a Contingency Fee Agreement?

A contingency fee agreement is a contract between an attorney and a client in which the attorney’s compensation depends on a successful outcome. Rather than charging an hourly rate or a flat fee upfront, the attorney agrees to accept a percentage of whatever money the client ultimately recovers. If nothing is recovered, the attorney earns no fee.

This arrangement makes legal representation available to people who could not otherwise afford to hire personal injury lawyers on an hourly basis. Because the attorney absorbs the cost of their own labor during the case, the client can pursue a claim without writing a check every month. The trade-off is that the attorney’s share of any recovery is typically higher than an hourly fee would produce in a straightforward matter.

Contingency fees are governed by professional conduct rules in every state. In Texas, those rules are found in the Texas Disciplinary Rules of Professional Conduct, adopted by the Supreme Court of Texas and administered by the State Bar of Texas. [1]

What Does Texas Disciplinary Rule 1.04 Say About Contingency Fees?

Rule 1.04 of the Texas Disciplinary Rules of Professional Conduct sets the framework governing attorney fees in Texas. [1] It addresses the general requirement that fees be reasonable, and it imposes specific requirements on contingency fee arrangements in particular.

The Written Agreement Requirement

Rule 1.04(d) requires that a contingency fee agreement be in writing, signed by the client, and that the writing state the method by which the fee is to be determined. Specifically, the rule requires the agreement to describe the percentage that will be owed in the event of settlement, trial, or appeal. It also requires the agreement to address whether certain expenses are to be deducted before or after the contingency fee is calculated, and whether the client will owe those expenses if the case does not recover. [1]

Because this written requirement exists, a client should receive a signed copy of the fee agreement before or at the start of representation. An oral contingency arrangement is not enforceable under Rule 1.04. If a prospective client is told that the terms can be explained later or does not receive a written document, that is a significant concern worth raising before agreeing to anything.

The Reasonableness Requirement

Rule 1.04(a) provides that an attorney may not charge or collect an unconscionable fee. It also identifies a set of factors relevant to whether a fee is reasonable, including the time and labor required, the complexity of the case, the results obtained, the experience and reputation of the attorney, and whether the fee is fixed or contingent. [1] A contingent fee is generally regarded as warranting a higher percentage than a comparable matter handled on an hourly basis, because the attorney assumes the risk of receiving nothing if the case is unsuccessful.

What Are Typical Contingency Fee Percentage Tiers in Texas Personal Injury Cases?

Texas law does not set a uniform maximum contingency fee percentage for personal injury cases the way some states cap fees in specific types of matters. The percentage is set by agreement between the attorney and client and must be reasonable under the circumstances. That said, common market ranges for personal injury cases in the Dallas area and across Texas generally follow a tiered structure based on the stage at which the case resolves. [2]

Common Contingency Fee Tiers in Texas Personal Injury Cases (Illustrative Only)
Stage of Resolution	Common Range	Why the Percentage Changes
Pre-suit settlement (before lawsuit filed)	33% (one-third) is common	Less attorney time typically invested; no litigation costs incurred
Post-filing / active litigation	40% is common	Significant additional time for discovery, depositions, and court appearances
Appeal	45% or higher is sometimes negotiated	Appellate work requires substantial additional briefing and argument

These ranges reflect general market practice and are not a guarantee or cap set by law. The actual percentage in any specific agreement depends on the attorney, the nature of the case, and the terms negotiated at the start of representation. A client should understand the tier structure in their own written agreement before signing, including which event triggers the shift from the pre-suit rate to the litigation rate.

What Is the Critical Difference Between Attorney Fees and Advanced Case Expenses?

This is the most important financial concept in any contingency fee relationship. Attorney fees and case expenses are separate categories, and they are treated differently when a case does not recover.

Attorney Fees

The contingency percentage is the attorney’s compensation for their time, skill, and work. If the case produces no recovery, the attorney receives none of this compensation. The attorney absorbs the value of all hours worked, all investigation conducted, and all negotiations attempted. That is the risk the attorney accepts in exchange for a higher percentage when the case succeeds.

Case Expenses (Costs)

Case expenses are the out-of-pocket costs paid to third parties during the litigation process. These are not attorney compensation. Common examples include:

Court filing fees paid to the district court (in Dallas County, filings are made at the George L. Allen Sr. Courts Building)
Fees paid to obtain medical records and billing statements
Charges for accident reconstruction consultants or expert witnesses
Fees for depositions and court reporters
Fees for process servers and investigators
Costs of obtaining police reports and government records

In most Texas contingency fee agreements, the attorney advances these costs during the case and seeks reimbursement at the end from the settlement or award. If the case produces a recovery, these costs are paid back to the attorney from the proceeds before the client receives their net share. The dispute is what happens when the case fails entirely.

Texas Disciplinary Rule 1.04 requires the fee agreement to address this question directly. [1] Some agreements state that the attorney absorbs all costs if the case does not recover. Others state that the client remains responsible for repaying the advanced costs even if there is no recovery. These are two very different financial outcomes for the client. A prospective client should ask this question specifically before signing any agreement.

Does It Matter Whether Expenses Are Deducted Before or After the Fee Percentage Is Calculated?

Yes. This is a practical arithmetic question that directly affects how much money the client ultimately receives from a recovery. The order of deduction can produce meaningfully different net amounts, particularly in cases with significant expense outlays.

Consider a simplified example.

Example: Order of Deduction (Illustrative Only – Not a GoSuits Case)

Suppose a Dallas driver is injured in a rear-end collision on I-635 and receives a $100,000 settlement. The contingency fee is 33%, and advanced case expenses total $10,000.

Scenario A: Expenses deducted before the fee is calculated

Recovery: $100,000
Minus expenses: -$10,000 = $90,000 (net recovery)
Attorney fee (33% of $90,000): -$29,700
Client receives: $60,300

Scenario B: Fee is calculated first, then expenses deducted

Recovery: $100,000
Attorney fee (33% of $100,000): -$33,000
Minus expenses: -$10,000
Client receives: $57,000

The difference between the two approaches in this example is $3,300. In cases with higher expenses or larger recoveries, the difference grows substantially. The fee agreement must specify which method applies, and Texas Disciplinary Rule 1.04 requires this to be stated clearly in writing. [1] Any client who is uncertain which method their agreement uses should ask before signing.

What Specific Questions Should I Ask Before Signing a Contingency Fee Agreement in Texas?

Because the written agreement controls the financial outcome in almost every scenario, a prospective client benefits from asking pointed questions before signing. Texas Disciplinary Rule 1.04 requires the agreement to answer most of these, but a client should verify that the answers are actually in the document they are signing. [1]

What is the exact fee percentage at each stage? Ask for the pre-suit percentage, the post-filing percentage, and the appellate percentage. Get each in writing.
When does the percentage increase? Identify the triggering event. Does the rate change when the lawsuit is filed, when discovery begins, or at some other point?
Are costs deducted before or after the fee is calculated? As shown above, this changes the client’s net recovery in every case.
If the case produces no recovery, am I responsible for the costs the attorney advanced? This is the most direct question about what the client owes on a lost case. The agreement must answer it, and the client must understand the answer before signing.
What types of costs will the attorney advance, and what are common amounts? Knowing the anticipated cost exposure helps the client understand the worst-case financial scenario if the case fails.
If there is a recovery, are any liens or subrogation interests that may reduce my net share? Medical liens, health insurance subrogation rights, and government benefit reimbursement obligations can all reduce the client’s final check independent of the fee agreement.
Will the agreement require my written approval before any settlement is accepted? Under Texas professional conduct rules, the decision to accept a settlement belongs to the client, not the attorney. [1]

Having these questions answered in writing, before the representation begins, is the foundation of a clear attorney-client financial relationship. The personal injury lawyers at GoSuits explain the terms of any proposed agreement before representation begins, so clients understand exactly what they are agreeing to.

What Actually Happens If My Personal Injury Case Does Not Recover Anything?

If the case produces no recovery and the fee agreement states that the attorney absorbs all costs when the case fails, the client owes nothing. The attorney has invested time, labor, and out-of-pocket expenses and receives nothing for any of it. This is the version of the arrangement many clients assume when they hear the phrase “no win, no fee.”

If the fee agreement states that the client is responsible for reimbursing advanced costs even on a losing case, the client may receive a bill for those costs after the case concludes. The attorney’s fee will still be zero, because the contingency was not triggered. But the expense reimbursement obligation, if it exists under the written agreement, survives the loss.

This is why reviewing the fee agreement carefully matters before the case begins, not after. Once a case has proceeded through months of litigation and accumulated substantial costs, the question of who bears those costs on a loss is not abstract.

For anyone injured in the Dallas area, including on corridors such as the LBJ Freeway (I-635), I-35E, or US-75, understanding this distinction at the moment of hiring counsel is part of making an informed decision about legal representation. Our Dallas personal injury lawyers are transparent about fee and expense terms at the outset of every case.

What Evidence Typically Drives the Value of a Texas Personal Injury Claim?

Understanding what makes a case more or less valuable also helps a client understand why attorneys evaluate cases carefully before agreeing to take them on contingency. The attorney’s willingness to absorb costs and labor on a contingent basis depends heavily on their assessment of the likely recovery. The stronger the evidence, the more predictable the outcome.

Evidence categories that commonly affect personal injury claim value in Texas include:

Police and crash reports documenting fault, citations, and scene conditions
Medical records and bills establishing the nature, cause, and cost of injuries
Photographs and video from the scene, dashcams, or commercial surveillance
Witness statements corroborating the client’s account of events
Employment and wage records supporting lost income claims
Expert testimony on accident reconstruction, causation, or future medical needs
Electronic data from vehicles or commercial trucks (event data recorders)

None of these categories automatically establishes liability or a specific recovery. Their relevance is evaluated in the context of the specific case facts and the applicable law.

What Types of Damages May Be Available in a Texas Personal Injury Case?

Texas recognizes several categories of recoverable damages in personal injury claims. Recoverability in any specific case depends on the evidence, the applicable law, and the facts presented. [3] Common categories include:

Past medical expenses already incurred for treatment, surgery, hospitalization, or rehabilitation
Future medical expenses for care reasonably expected to be required because of the injury
Lost wages from time missed at work because of the injury or treatment
Loss of earning capacity when the injury permanently reduces the ability to earn income
Physical pain and mental anguish, both past and future
Physical impairment and loss of enjoyment of life
Disfigurement when visible scarring or deformity results from the injury
Property damage
Exemplary (punitive) damages in cases involving gross negligence or intentional misconduct, subject to the caps in Texas Civil Practice and Remedies Code Chapter 41 [4]

The contingency fee and any advanced expenses are paid from the gross recovery before the client receives their net share. Understanding that structure helps a client evaluate any settlement offer they receive.

How Long Do I Have to File a Personal Injury Claim in Texas?

The Texas statute of limitations for most personal injury claims is two years from the date the cause of action accrues, typically the date of the injury. [5] Claims filed after this deadline are generally barred, regardless of the merits. Different deadlines may apply in certain situations:

Claims against a government entity often require written notice within 180 days of the incident under the Texas Tort Claims Act, with a separate limitations period [6]
Claims involving minors may have modified accrual rules
Wrongful death claims have their own limitations period under Texas Civil Practice and Remedies Code Section 71.003 [7]
Cases involving product liability or other theories may involve different accrual rules

These deadline issues are independent of the fee agreement but directly affect whether a case has value. An attorney evaluating a contingency fee arrangement will assess the limitations period as part of deciding whether to take the case. If the deadline has passed or is about to pass, that fundamentally changes the risk calculation for both the attorney and the client.

Anyone with a potential personal injury claim in Texas, including in the Dallas County District Court system, should consult with an attorney as early as possible to preserve all available options.

Frequently Asked Questions

Q: If my Texas personal injury case settles before a lawsuit is filed, do I owe the lower pre-suit fee percentage or the higher litigation rate?

A: The answer depends entirely on what your written fee agreement says. In many agreements, the lower rate applies to settlements reached before the lawsuit is filed. Some agreements define the trigger point differently, such as the date discovery begins or the date of a specific court event. The agreement controls. If your written agreement does not define the triggering event clearly, ask your attorney for a written clarification before the case proceeds. For more background on how Dallas crash cases proceed, see our guide on Dallas car accident steps and records.

Q: Can an attorney change the fee percentage after I have already signed the agreement?

A: Generally, no. The fee agreement is a contract, and its terms ordinarily cannot be changed without the client’s informed written consent. Texas Disciplinary Rule 1.04 governs the formation and content of the agreement and requires it to be in writing. If an attorney attempts to revise fee terms during a case without your agreement, that is a matter worth discussing directly with the attorney and, if necessary, raising with the State Bar of Texas.

Q: Does the attorney make more money if I go to trial instead of settling?

A: If the fee agreement contains a tiered structure where the percentage increases after the lawsuit is filed or at trial, the attorney may earn a higher percentage from a trial verdict than from a pre-suit settlement. However, trials are also more expensive for the attorney in terms of time and advanced costs, and they carry greater risk of an adverse outcome. Under Texas professional conduct rules, the decision to accept or reject any settlement belongs to the client, not the attorney. An attorney who pressures a client to reject a reasonable settlement or pursue litigation for financial reasons may be acting improperly.

Q: What are common case expenses in a Dallas personal injury case, and how large do they typically get?

A: Expenses vary significantly by case type and complexity. In a straightforward single-vehicle rear-end case, expenses might total a few hundred to a few thousand dollars. In a contested liability case involving commercial trucking on a corridor like I-35E, with expert witnesses on accident reconstruction and medical causation, expenses can reach tens of thousands of dollars. Filing fees at Dallas County District Court, deposition costs, and expert witness fees are common drivers of cost in complex matters. Your attorney should be able to give you a realistic estimate of expected expenses before proceeding. For more on how Dallas crash cases progress, see our DFW car crash guide.

Q: Can I negotiate the terms of a contingency fee agreement?

A: Yes. A contingency fee agreement is a contract, and like most contracts, its terms are subject to negotiation between the parties before it is signed. Whether a particular attorney is willing to adjust the percentage, the expense allocation, or the triggering events for tier changes depends on the specific attorney and the nature of the case. Stronger cases with higher expected recoveries may provide more room for negotiation than high-risk cases with uncertain liability or limited insurance coverage. What matters most is that whatever terms are agreed upon are clearly reflected in the written agreement that both parties sign.

Q: Are contingency fees ever subject to approval by a court in Texas personal injury cases?

A: In most adult personal injury cases, the fee agreement between attorney and client is a private contract and does not require court approval. However, certain situations do require judicial oversight. When a minor child is a party to a personal injury settlement, Texas law generally requires court approval of the settlement and may scrutinize attorney fees as part of that process. Similarly, wrongful death settlements distributed to beneficiaries may involve court review in some circumstances. If your case involves a minor or multiple surviving family members with competing interests, ask your attorney whether court approval will be required and how that affects the fee calculation. For information about fatal accident cases in the Dallas area, see our guide on what Dallas families should do after a fatal crash.

Q: My attorney is telling me the case is worth settling, but I want to keep fighting. Do I have the right to reject a settlement offer in Texas?

A: Yes. Under the Texas Disciplinary Rules of Professional Conduct, the decision to accept or reject a settlement offer belongs to the client, not the attorney. The attorney has a duty to communicate any settlement offer and to provide an honest assessment of its adequacy relative to the risks of continued litigation, but the ultimate decision is yours. An attorney who settles a case without the client’s authorization has acted improperly. If you are experiencing disagreement with your attorney about a settlement, consider asking for the objection and the attorney’s reasoning in writing, so you have a clear record of the communication.

What Should I Do Next?

If you were injured in an accident in the Dallas area and are considering hiring an attorney, the practical steps are straightforward:

Consult early. The Texas statute of limitations is two years for most personal injury claims, but evidence deteriorates and witnesses become harder to locate over time. Earlier consultation preserves more options.
Request a written fee agreement before proceeding. Texas Disciplinary Rule 1.04 requires it. If an attorney will not put the terms in writing, that is a significant concern.
Read the agreement and ask the questions listed above, specifically who bears costs on a lost case and whether costs are deducted before or after the fee percentage is calculated.
Preserve evidence now. Photographs, dashcam footage, witness contact information, and medical records become harder to obtain as time passes.

Personal injury claims can involve insurance disputes, contested liability, complex medical evidence, and legal deadlines that interact in ways that are not obvious to someone navigating the process for the first time. An attorney familiar with the personal injury claim process in Texas courts can explain how the law applies to the specific circumstances of your case.

For a closer look at how the “no fee unless you win” promise works in practice, see our knowledge-base article on no fee lawyers unless you win.

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A personal injury claim in Texas can involve medical evidence, insurance disputes, liability questions, and legal deadlines that all move simultaneously. If you were injured in a Dallas accident, whether on the Central Expressway, the Dallas North Tollway, or anywhere in the DFW Metro, a GoSuits personal injury attorney can review the circumstances of your case, explain your options, and walk through the fee and expense terms of any representation agreement in plain English before you sign anything.

Our Dallas personal injury lawyers handle cases on a contingency basis. You owe no attorney fee unless a recovery is made for you.

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