Alternative Fee Arrangements
Not every case fits a pure contingency fee model. Alternative fee arrangements — including hybrid contingency, flat fees, capped fees, and reverse contingency — offer different risk-sharing structures for cases where standard contingency may not be appropriate or available.
How Do Fee Structures Compare?
Direct Answer: Alternative fee arrangements (AFAs) are billing structures that depart from the traditional billable hour or pure contingency model. Common AFAs include hybrid contingency, flat fees, capped fees, reverse contingency, and success bonuses. Each suits different case types and risk profiles.
| Structure | Client Risk | Best For |
|---|---|---|
| Pure Contingency | None (fees) / Low (costs) | PI, med-mal, employment, mass tort |
| Hybrid Contingency | Medium (reduced hourly) | Business disputes, uncertain damages |
| Flat Fee | Fixed / Predictable | Discrete tasks, transactional work |
| Capped Fee | Bounded hourly | Litigation with predictable scope |
| Reverse Contingency | Performance-based | Defence-side litigation |
| Hourly Rate | Highest / Unlimited | Complex commercial, regulatory, M&A |
Hybrid Contingency
A hybrid arrangement combines elements of hourly billing and contingency. The attorney charges a reduced hourly rate (often 40–60% of their standard rate) plus a smaller contingency percentage (typically 10–20%) of the recovery.
Example: An attorney with a $400/hour standard rate might charge $175/hour plus 15% of the recovery. On a case requiring 200 hours that settles for $500,000, the total fee would be $35,000 (hourly) + $75,000 (contingency) = $110,000 — compared to $166,667 under a pure 33⅓% contingency or $80,000 under a pure hourly arrangement.
Flat Fee
A flat fee provides complete cost certainty. The attorney and client agree on a fixed amount for a defined scope of work, regardless of how many hours are required. Flat fees are most common for predictable, discrete legal tasks: drafting contracts, forming business entities, handling uncontested divorces, preparing wills and trusts, or filing trademark applications.
Capped Fee
A capped fee arrangement uses standard hourly billing but with a predetermined maximum. If the attorney's hours exceed the cap, they absorb the additional work at no extra charge. This gives the client the benefit of hourly billing transparency with a ceiling on total cost. Caps are commonly used in litigation where the scope is reasonably predictable.
Reverse Contingency
A reverse contingency fee is used in defence-side litigation. The attorney's fee is a percentage of the money saved — the difference between the amount initially demanded (or the exposure assessed) and the actual resolution amount. This aligns the defence attorney's incentive with the client's goal of minimising liability.
Success Fee / Bonus
A success fee or bonus arrangement involves a base fee (hourly or flat) plus a bonus payment triggered by achieving a specific outcome — for example, a favourable verdict, a settlement above a threshold, or completion within a deadline. This structure is common in complex commercial litigation and regulatory matters.
Frequently Asked Questions
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Step-by-step process guide
Read moreAre Contingency Fees Regulated?
State bar rules and ethics
Read moreWhere this applies: Contingency fee rules are set state by state. Check your own state's rules before acting.
Sources for this page
Every rule stated above is based on the primary sources below. Each link goes to the legislation, court rule or regulator itself so you can check it. Last verified 2 August 2026.
- ABA Model Rule 1.5 (Fees)
Model, not law. Each state adopts its own version. Rule 1.5(d) bars contingency fees in most domestic relations matters and in criminal defence.
- Cornell LII — contingency fee
- Federal Rule of Civil Procedure 54(d) (costs to the prevailing party)
A losing plaintiff may be ordered to pay the defendant's taxable costs. There is no US equivalent of QOCS.
Who wrote and checked this page
- Written and published by
- Edward & Amaury Solicitors (Edward & Amaury Ltd, company no. 12195443), regulated by the Solicitors Regulation Authority under no. 800525.
- Legal review
- This page has not yet been through independent legal review. It is written from the primary sources listed below, which you can check directly.
- Review dates
- Last reviewed 2 August 2026. Next review due 2 February 2027.
Fee rules change. California’s medical malpractice fee limits changed on 1 January 2023, and the QOCS rules in England and Wales changed on 6 April 2023. If you spot something out of date, tell us — we publish corrections.