How contingency fees work in Texas
A contingency fee is paid only out of a recovery. Texas Disciplinary Rule 1.04(d) requires the agreement to be in writing, state how the fee is figured, list expenses to be deducted and say whether they come off before or after the fee (Rule 1.04). Workers' compensation fees are capped at 25 percent of the recovery by statute.
General information about Texas law, not legal advice. The author is not a lawyer. Laws change; check the linked sources and talk to a Texas lawyer about your situation.
What Rule 1.04(d) requires in writing
The Texas Disciplinary Rules of Professional Conduct, published by the State Bar of Texas, allow a fee to be "contingent on the outcome of the matter" (with exceptions such as criminal defense). Rule 1.04(d) says the agreement:
- must be in writing and state the method by which the fee is determined;
- must state each percentage if the percentage differs for settlement, trial or appeal;
- must state the litigation and other expenses to be deducted from the recovery, and whether they are deducted before or after the fee is calculated.
At the end of the matter, the lawyer must give the client a written statement of the outcome and, if there is a recovery, show the remittance to the client and how it was calculated (Rule 1.04(d)).
Is there a percentage limit?
Rule 1.04 does not set a fixed percentage for personal injury cases. Instead, Rule 1.04(a) forbids an "illegal fee or unconscionable fee," and Rule 1.04(b) lists factors for reasonableness, including the time and labor required, the fee customarily charged locally, the amount involved and results obtained, and "whether the fee is fixed or contingent" (Rule 1.04(a)-(b)). Percentages in agreements vary; we do not publish typical or average figures.
Workers' compensation fees are different
In a Texas workers' compensation claim, an attorney's fee must be approved by the Division of Workers' Compensation or the court, and "may not exceed 25 percent of the claimant's recovery," except in limited situations named in the statute (Tex. Lab. Code §408.221(a), (i)).
Before you sign
The rule gives you a checklist: the percentage or percentages, the list of expenses, and whether expenses are deducted before or after the fee. You can ask any firm to explain each line. You can check a lawyer's license status on the State Bar of Texas website.
Frequently asked questions
Does a Texas contingency fee agreement have to be in writing?
Yes. Texas Disciplinary Rule of Professional Conduct 1.04(d) says a contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined.
Is there a cap on contingency fees in Texas?
Rule 1.04 does not set a fixed percentage for personal injury cases; it prohibits unconscionable fees and lists reasonableness factors. Workers' compensation attorney fees are limited to 25 percent of the recovery by Texas Labor Code Section 408.221.
Sources
- Texas Disciplinary Rules of Professional Conduct, Rule 1.04 (State Bar of Texas) (checked October 18, 2026)
- Tex. Lab. Code §408.221 (checked October 18, 2026)