Do Employment Lawyers Work on Contingency?

Some employment lawyers work on a contingency fee basis, while others charge hourly rates, flat fees, or use a combination of billing arrangements. Whether a contingency fee is available depends on the facts of your case, the legal issues involved, the likelihood of success, and the lawyer’s or law firm’s fee structure.

Under a contingency fee agreement, the lawyer is generally paid only if the case is successful. Instead of paying legal fees upfront or as the case progresses, the lawyer receives an agreed percentage of the amount recovered. Billing arrangements vary between law firms. This article explains contingency fee agreements generally and is not intended to describe the fee structure of any particular law firm.

Understanding how contingency fees work can help you decide whether a contingency fee arrangement makes sense for your situation and what questions to ask before hiring an employment lawyer.

What Is a Contingency Fee?

A contingency fee is a payment arrangement where a lawyer’s legal fee depends on the outcome of the case. If the claim is successful, the lawyer receives a percentage of the amount recovered. If the claim is unsuccessful, the client generally does not pay legal fees under the contingency agreement, although they may still be responsible for certain expenses depending on the terms of the retainer.

The terms of a contingency fee agreement must be set out in writing. The agreement should explain how legal fees are calculated, whether taxes apply, how litigation expenses or disbursements will be handled, and the responsibilities of both the lawyer and the client throughout the case.

Contingency fee agreements are permitted in Ontario for many civil matters, including some employment law claims. They are regulated by legislation and professional rules to help ensure clients understand the financial arrangement before moving forward.

Not every legal matter is suitable for a contingency fee. Some employment issues involve ongoing workplace advice, contract reviews, or negotiations where another billing arrangement may be more appropriate.

Which Employment Law Cases Are More Likely to Qualify for a Contingency Fee?

Whether a lawyer is willing to accept a case on contingency depends on several factors rather than the type of claim alone.

Employment disputes involving wrongful dismissal, constructive dismissal, workplace discrimination, or significant unpaid compensation may sometimes be suitable for a contingency fee arrangement. Even then, the lawyer will first evaluate whether there is a reasonable legal basis for the claim and whether the available evidence supports it.

For example, a wrongful dismissal claim supported by a written employment contract, termination letter, and other relevant documents may be easier to assess than a dispute that depends heavily on conflicting witness accounts or limited evidence.

A lawyer will also consider practical issues, including the likely value of your claim, whether the employer could satisfy a judgment, and how much work the matter is likely to require. These considerations help determine whether assuming the financial risk of a contingency arrangement is appropriate.

Where contingency fee arrangements are offered, an initial consultation is typically used to assess the claim and determine whether that billing model is appropriate.

What Percentage Do Most Lawyers Take as a Contingency Fee?

There is no standard contingency fee percentage that applies to every employment lawyer or every employment law case.

The percentage is negotiated between the lawyer and the client and is set out in the written retainer agreement. Several factors may influence the agreed fee, including the complexity of the case, the amount of work involved, the legal risks, whether expert evidence may be required, and whether the matter is likely to resolve through negotiation or proceed to litigation.

The percentage is only one part of the agreement. You should also understand how legal fees are calculated, whether taxes are included, who pays disbursements, and what happens if the matter settles early or proceeds to an appeal.

A lawyer should explain the fee arrangement in clear language before you sign the retainer. You should understand what services are included, your financial responsibilities throughout the matter, and how the agreement will operate if the case resolves in different ways.

Review the retainer carefully before signing so you understand exactly how legal fees, disbursements, and responsibilities will be handled.

What Are the Drawbacks of Contingency Fees?

A contingency fee arrangement can make legal representation more accessible for employees who are unable or unwilling to pay ongoing hourly legal fees. However, it is not the right solution for every employment dispute.

Because the lawyer assumes the financial risk of the case, they will carefully assess whether the claim has sufficient legal merit before agreeing to represent the client on a contingency basis. As a result, some cases may not qualify even if the employee believes they have been treated unfairly.

A successful claim also means that a portion of the amount recovered will generally be paid as legal fees according to the contingency agreement. Some clients may prefer an hourly or flat-fee arrangement instead, particularly if the legal issue is relatively straightforward or expected to resolve quickly.

Contingency fee agreements usually apply only to certain types of legal work. Matters involving workplace advice, employment agreements, policy reviews, or ongoing legal guidance are commonly billed using different fee structures because they do not involve recovering compensation through litigation.

Every billing arrangement has advantages and disadvantages. The right approach depends on the nature of your legal issue, your financial circumstances, and the scope of the work involved.

What Should I Ask Before Agreeing to a Contingency Fee?

Before signing a contingency fee agreement, take the time to understand exactly how the arrangement works. A lawyer should explain the terms clearly and answer any questions you have before you commit.

Ask how the contingency fee will be calculated, whether taxes are included, and whether you will be responsible for disbursements such as court filing fees, expert reports, or other litigation expenses. You should also ask what happens if the matter settles before trial or if an appeal becomes necessary.

It is equally important to understand what legal services are covered by the agreement. Some retainers include negotiations, mediation, and litigation, while others may define the scope of representation more narrowly.

A written retainer agreement should clearly explain your responsibilities, your lawyer’s responsibilities, and how legal fees will be handled under different outcomes. If anything is unclear, ask for clarification before signing.

Can an Employment Lawyer Tell if My Case Is Suitable for a Contingency Fee?

Whether a contingency fee arrangement is available depends on the lawyer or law firm’s policies. During an initial consultation, they may assess the facts of the case and explain which billing arrangements, if any, are available.

The legal issues involved also influence that assessment. For example, your lawyer may consider whether your matter involves rights under the Employment Standards Act (“ESA”), a potential wrongful dismissal claim under the common law, allegations of discrimination under the Ontario Human Rights Code (“OHRC”), or protections available to federally regulated employees under the Canada Labour Code (“CLC”).

The strength of the available evidence, the likely value of the claim, limitation periods, and the practical realities of pursuing legal action all play a role in determining whether a contingency fee arrangement may be appropriate.

An initial consultation is an opportunity to discuss your circumstances, ask questions about your legal options, and understand the lawyer’s available billing arrangements.

What Should I Consider When Hiring an Employment Lawyer?

Legal fees are an important consideration, but they should not be the only factor when choosing a lawyer.

Experience matters. A lawyer who regularly handles employment law disputes is generally better placed to identify the legal issues, explain your options, and assess the strengths and weaknesses of your case.

Communication is equally important. Your lawyer should explain the legal process in plain language, answer your questions honestly, and provide realistic advice based on the facts of your case rather than making promises about the outcome.

Before hiring any employment lawyer, ask how they charge for their services, whether contingency fees are available for your type of matter, and what costs you may still be responsible for if your claim is unsuccessful. A written retainer agreement should clearly explain the billing arrangement before you decide to proceed. Because billing arrangements vary between law firms, you should discuss the available fee structure directly with the lawyer before retaining legal services.

Legal Disclaimer: This post is general information only. Nothing in it constitutes legal advice, and nothing here applies to your specific situation. Every case turns on its own facts, and the only way we can advise you on yours is through a proper consultation and engagement. Reading this post does not create a lawyer-client relationship with Sultan Lawyers. If you have questions about your situation, contact us directly.