Lawyer Fees & Contingency Fees: ABA Model Rule 1.5

By Steve Levine · Updated July 3, 2026 · 8 min read

Quick Answer

ABA Model Rule 1.5 is the ethics rule on lawyer fees. It bans unreasonable fees and expenses, and it puts teeth into "no fee unless you win": a contingent-fee agreement must be in a signed writing that spells out the percentage at each stage (settlement, trial, appeal), which expenses come out of the recovery and whether before or after the fee is calculated, and which costs you owe even if you lose. Contingent fees are banned outright in most divorce matters and in criminal defense. In a class action, you don't sign a fee agreement at all — the court approves class counsel's fee under Federal Rule of Civil Procedure 23(h), with notice to the class and a chance to object.

On this page

The Reasonableness Standard
Contingent Fees: The Writing Requirements
Where Contingent Fees Are Banned
Fee Splits Between Law Firms
How Fees Work in Class Actions
Frequently Asked Questions

The Reasonableness Standard

Rule 1.5(a) starts with the baseline: a lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The rule lists the factors used to judge reasonableness, including the time and labor required; the novelty and difficulty of the questions; the skill needed; the fee customarily charged in the locality for similar services; the amount involved and the results obtained; time limitations imposed by the client or circumstances; the nature and length of the relationship with the client; the lawyer's experience, reputation, and ability; and whether the fee is fixed or contingent. Rule 1.5(b) adds that the scope of the representation and the basis or rate of the fee and expenses must be communicated to the client — preferably in writing — before or within a reasonable time after the representation begins, except for a regular client on the same terms as before.

Contingent Fees: The Writing Requirements

"No fee unless we win" arrangements are legal in most civil matters, but Rule 1.5(c) surrounds them with mandatory paperwork. A contingent-fee agreement must be in a writing signed by the client, and it must state:

• The method by which the fee is determined, including the percentages that apply if the case settles, goes to trial, or is appealed;
• Which litigation and other expenses will be deducted from the recovery;
• Whether those expenses are deducted before or after the contingent fee is calculated — a detail that can change the client's net recovery meaningfully; and
• Any expenses the client must pay regardless of outcome — "no fee" does not automatically mean "no costs."

At the end of a contingent-fee matter, the lawyer must give the client a written statement of the outcome and, if there's a recovery, show the remittance to the client and how it was determined. If a settlement statement you receive doesn't show that math, you're entitled to ask for it.

Where Contingent Fees Are Banned

Rule 1.5(d) prohibits contingent fees in two areas: domestic relations matters where the fee would be contingent on securing a divorce or on the amount of alimony, support, or property settlement obtained in lieu of them; and defending a criminal case. The concern is perverse incentives — a fee tied to a divorce outcome could discourage reconciliation, and a criminal-defense fee tied to acquittal creates conflicts the system won't tolerate. States can and do add their own limits on top, such as statutory caps on contingent fees in medical-malpractice cases.

Fee Splits Between Law Firms

When lawyers from different firms share one fee — common in referrals of injury and mass tort cases — Rule 1.5(e) requires that the division be either in proportion to the services each lawyer performs or supported by each lawyer assuming joint responsibility for the representation; that the client agree to the arrangement, including the share each lawyer will receive, confirmed in writing; and that the total fee remain reasonable. The client's total fee isn't supposed to grow because two firms are splitting it.

How Fees Work in Class Actions

Class members don't sign contingent-fee agreements — most never speak to class counsel at all. The protection instead comes from the court. In federal class actions, Rule 23(h) of the Federal Rules of Civil Procedure requires that any award of attorney's fees be approved by the court on motion, with notice to class members, who may object. Fees typically come from the common settlement fund (a percentage the judge reviews, often cross-checked against the hours actually worked) or are paid separately by the defendant under the settlement's terms. That's why every OCA settlement page's fine print notes that attorney's fees and costs are subject to court approval — the number in the motion isn't final until the judge signs off. Rule 1.5's reasonableness standard still binds the lawyers underneath all of this.

Related concepts on this site: common benefit fees in MDLs, pro rata distribution of what remains after fees and costs, and preliminary approval, the stage where the fee request first surfaces publicly.

Frequently Asked Questions

What does ABA Model Rule 1.5 require for lawyer fees?

Rule 1.5(a) prohibits a lawyer from charging or collecting an unreasonable fee or an unreasonable amount for expenses. Reasonableness is judged by listed factors, including the time and labor required, the novelty and difficulty of the questions, the fee customarily charged in the locality for similar work, the amount involved and results obtained, time limitations, the lawyer's experience and reputation, and whether the fee is fixed or contingent. The scope of the representation and the basis of the fee must be communicated to the client, preferably in writing.

What must a contingency fee agreement include?

Under Rule 1.5(c), a contingent fee agreement must be in a writing signed by the client and must state the method by which the fee is determined — including the percentages that apply if the case settles, goes to trial, or is appealed — which litigation and other expenses will be deducted from the recovery, and whether those expenses are deducted before or after the contingent fee is calculated. It must also clearly notify the client of any expenses the client must pay regardless of outcome. At the end of the matter, the lawyer must provide a written statement showing the outcome and, if there is a recovery, the remittance to the client and how it was determined.

When are contingency fees not allowed?

Under Rule 1.5(d), a lawyer may not charge a contingent fee in a domestic relations matter where the fee is contingent on securing a divorce or on the amount of alimony, support, or a property settlement in lieu of them, and may not charge a contingent fee for defending a criminal case. States may add their own restrictions or caps in areas like medical malpractice.

Who decides the attorney fees in a class action settlement?

The court. In a federal class action, Rule 23(h) of the Federal Rules of Civil Procedure requires court approval of any award of attorney's fees, on motion and with notice to class members, who may object. Class members are not individually signing fee agreements — the fee typically comes out of the common settlement fund or is paid separately by the defendant, and the judge reviews it for reasonableness. Rule 1.5's reasonableness standard still applies to the lawyers, but the court approval process is the class member's main protection.

Sources

• American Bar Association — Model Rules of Professional Conduct (Table of Contents)
• Cornell LII — Federal Rule of Civil Procedure 23 (including 23(h) on attorney's fees)

About This Page

General informational summary of a legal-ethics rule, not legal advice. The ABA Model Rules are a template; the rule that actually governs any particular lawyer is the version adopted in the state where that lawyer is licensed, and several states impose additional fee restrictions or caps this summary doesn't cover. Anyone with questions about a specific fee agreement should consult their own lawyer or state bar.