Key points
- A New York lawyer may not make an agreement for, charge or collect an excessive or illegal fee or expense.[1]
- Promptly after being hired on a contingent fee, a New York lawyer must give the client a writing that states how the fee is determined, including the percentage or percentages for settlement, trial or appeal, and which expenses are deducted from the recovery.[2]
- An attorney who charges a fee must give the client a written letter of engagement covering the scope of services and the fees, expenses and billing practices; the rule does not apply where the fee is expected to be less than $3,000.[3]
- A New York lawyer may not charge a nonrefundable retainer fee, although a reasonable minimum fee clause that is explained in plain language is allowed.[4]
- New York's Statement of Client's Rights says a client may refuse any fee arrangement the client finds unsatisfactory, and that a client who is not satisfied with how the matter is being handled may withdraw from the attorney-client relationship at any time, though court approval may be required in some matters and the attorney may have a claim for services rendered.[5][6]
Under the New York Rules of Professional Conduct, a lawyer may not charge an excessive fee, and a lawyer hired on a contingent fee must give the client a writing that states how the fee is determined.[1][2] A separate State court rule calls for a written letter of engagement when the fee is expected to be $3,000 or more.[3] This page explains those State rules and the questions they answer. It does not describe what any lawyer or firm charges, and it states no usual rate.
What are the common fee arrangements?
These are descriptive labels, not legal categories. The same State rules on excessive fees and written disclosure apply to each.
- Contingency (contingent fee). The fee depends on the outcome, for example a percentage of what is recovered. New York's rules allow a fee to be contingent on the outcome of the matter except where prohibited.[2]
- Hourly. The client pays for time spent, whatever the outcome.
- Flat or fixed fee. One price for a defined task, such as reviewing a severance agreement or representing someone at a mediation.
- Hybrid. A mix, for example a reduced hourly rate together with a smaller share of any recovery.
Whether a fee is fixed or contingent is one of the factors the State rule lists for judging whether a fee is excessive.[1]
What does New York's rule on excessive fees say?
Rule 1.5(a) of the New York Rules of Professional Conduct says a lawyer shall not make an agreement for, charge, or collect an excessive or illegal fee or expense. A fee is excessive when, after a review of the facts, a reasonable lawyer would be left with a definite and firm conviction that it is excessive.[1] The factors the rule lists include the time and labor involved, the customary local fee, the amount involved and the results obtained, the lawyer's experience, and whether the fee is fixed or contingent.[1]
The rule applies to expenses as well as fees.[1]
What must a contingency fee agreement put in writing?
Rule 1.5(c) sets the contents. Promptly after a lawyer has been employed in a contingent fee matter, the lawyer must give the client a writing that covers the points in the table.[2]
| Item the writing must state (New York State rule) | Why it matters to the client |
|---|---|
| The method by which the fee is determined, including the percentage or percentages that accrue to the lawyer in the event of settlement, trial or appeal[2] | The share can differ by stage. The writing shows which figure applies when. |
| The litigation and other expenses to be deducted from the recovery[2] | Expenses are separate from the fee and reduce what the client receives. |
| Whether those expenses are deducted before or after the contingent fee is calculated[2] | If expenses come out first, the fee is a share of a smaller amount. |
| Any expenses for which the client will be liable regardless of whether the client is the prevailing party[2] | This is the client's exposure if nothing is recovered. |
The rule also covers the end of the matter. When it concludes, the lawyer must give the client a written statement of the outcome that shows the remittance to the client and how it was calculated.[2]
What is a letter of engagement?
A New York court rule, separate from the Rules of Professional Conduct, requires an attorney who undertakes to represent a client and charges a fee to give the client a written letter of engagement before starting the work or within a reasonable time afterwards.[3] The letter must explain three things: the scope of the legal services, the attorney's fees, expenses and billing practices, and, where applicable, that the client may have a right to arbitrate fee disputes under Part 137 of the court rules.[3]
A signed written retainer agreement that covers the same matters satisfies the rule. The rule does not apply where the fee to be charged is expected to be less than $3,000.[3]
What may a New York lawyer never charge?
Rule 1.5(d) lists arrangements that are off limits in New York. A lawyer may not charge a contingent fee for representing a defendant in a criminal matter, a fee prohibited by law or rule of court, a fee based on fraudulent billing, or a nonrefundable retainer fee.[4] A retainer agreement may still contain a reasonable minimum fee clause if it defines in plain language the circumstances under which the fee may be incurred and how it will be calculated.[4]
The list in Rule 1.5(d) does not name employment discrimination, harassment or retaliation cases.[4]
What rights does a client have about fees?
Every attorney with an office in New York must see that a Statement of Client's Rights is posted there where clients can see it.[6] On fees, it says a client is entitled to:
- be charged a reasonable fee and have the lawyer explain at the outset how the fee will be computed and the manner and frequency of billing;[5]
- request and receive a written itemized bill at reasonable intervals;[5]
- refuse to enter into any fee arrangement the client finds unsatisfactory;[5]
- have the lawyer respect the client's legitimate objectives, including whether or not to settle the matter;[5]
- withdraw from the attorney-client relationship at any time if not satisfied with how the matter is being handled, although court approval may be required in some matters and the attorney may have a claim for the value of services rendered up to that point.[6]
A fee discussion with a lawyer who is not then hired is covered by a confidentiality rule. Under Rule 1.18 of the New York Rules of Professional Conduct, a lawyer who learns information from a prospective client may not use or reveal it, even when no client-lawyer relationship follows, except as the rules would permit for a former client.[7] The guide to preparing for a consultation lists fee questions worth raising.
How do fee-shifting statutes fit in?
Federal Title VII, the New York State Human Rights Law (NYSHRL) and the New York City Human Rights Law (NYCHRL) each let a court award a reasonable attorney's fee to a prevailing party. The wording differs in each, and in each the award is discretionary.[8][9][10]
| Layer | What the fee provision says |
|---|---|
| Federal (Title VII) | The court, in its discretion, may allow the prevailing party a reasonable attorney's fee, including expert fees, as part of the costs.[8] |
| New York State (NYSHRL) | The Commissioner or the court may, in its discretion, award reasonable attorney's fees to any prevailing or substantially prevailing party.[9] At the Division of Human Rights, fees may be awarded only as part of a final order after a public hearing.[9] |
| New York City (NYCHRL) | In a civil action the court, in its discretion, may award the prevailing party reasonable attorney's fees, expert fees and other costs.[10] |
Under the NYSHRL, a prevailing respondent or defendant can recover fees only by motion and only by showing that the action or proceeding was frivolous.[9] Under the NYCHRL, a plaintiff also counts as prevailing if the lawsuit acted as a catalyst for a policy change by the defendant, including through a settlement.[10]
This page does not cover how a court-awarded fee is treated under a private fee agreement; that is a question to raise with the lawyer. The standards for each layer are set out in attorney's fees in New York employment cases.
Are legal fees taxed as part of a settlement?
Federal tax law has a specific rule for discrimination cases. A taxpayer may deduct, in computing adjusted gross income, attorney fees and court costs paid in connection with an action involving a claim of unlawful discrimination, but not more than the amount included in gross income for the year from the judgment or settlement.[11] The definition of unlawful discrimination in that provision reaches federal, State and local laws that regulate the employment relationship or prohibit retaliation against an employee for asserting rights.[11] This is general information, not tax advice; see whether employment settlements are taxable.
Where can someone who cannot pay a fee turn?
Filing with the New York State Division of Human Rights is free and does not require an attorney.[12] Legal Services NYC says it provides free legal advice, referrals and representation to low-income workers, subject to capacity and location.[13] The New York City Bar Legal Referral Service said, as of October 5, 2026, that initial consultations with the lawyers it refers are $35 or free, depending on the type of case, and last up to 30 minutes.[14] More sources are listed in free and low-cost legal help for New York workers, and the question of whether representation is needed at all is covered in do I need a lawyer.
What people commonly get wrong
- "Contingency means I can never owe anything." Rule 1.5(c) requires the writing to notify the client clearly of any expenses for which the client will be liable regardless of whether the client is the prevailing party.[2]
- "The fee percentage is fixed by law." What Rule 1.5(c) fixes is disclosure: the percentage or percentages must be stated in writing.[2]
- "If I win, the employer always pays my lawyer." Fee awards under federal, State and City law are each within the tribunal's discretion.[8][9][10]
- "My lawyer decides whether to accept a settlement." The Statement of Client's Rights says a client is entitled to have the lawyer respect the client's legitimate objectives, including whether or not to settle the matter.[5] What a settlement can include is covered in severance agreements and releases.
Common questions
What is a contingency fee?
It is a fee that depends on the outcome of the matter. New York's Rules of Professional Conduct allow a fee to be contingent on the outcome except where prohibited, and they require the lawyer to give the client a writing, promptly after being hired, that states the method by which the fee is determined.[2] The list of prohibited fees in Rule 1.5(d), which includes a contingent fee for defending a criminal matter, does not name employment discrimination, harassment or retaliation cases.[4]
Does New York set a standard contingency percentage for employment cases?
The rules described on this page do not state one. What Rule 1.5 of the New York Rules of Professional Conduct requires is that the percentage or percentages that accrue to the lawyer in the event of settlement, trial or appeal be written down for the client.[2] Any fee, whatever its form, is also subject to the general rule that a lawyer may not charge or collect an excessive fee.[1]
Who pays the expenses of the case if I lose?
The written fee agreement has to answer that. In a contingent fee matter the writing must clearly notify the client of any expenses for which the client will be liable regardless of whether the client is the prevailing party.[2] It must also list the litigation and other expenses to be deducted from a recovery and say whether they come out before or after the contingent fee is calculated.[2]
Can a New York lawyer charge a nonrefundable retainer?
No. Under Rule 1.5(d) a lawyer may not enter into an arrangement for, charge or collect a nonrefundable retainer fee. The same rule allows a retainer agreement to contain a reasonable minimum fee clause if it defines in plain language the circumstances under which the fee may be incurred and how it will be calculated.[4]
Can the employer be ordered to pay my attorney's fees?
The statutes allow it and leave it to discretion. Under the New York State Human Rights Law, a court or the Commissioner may, in its discretion, award reasonable attorney's fees to a prevailing or substantially prevailing party.[9] Under the New York City Human Rights Law and federal Title VII, a court may, in its discretion, award the prevailing party a reasonable attorney's fee.[10][8]
Can I change lawyers after signing a fee agreement?
The Statement of Client's Rights that New York attorneys post says a client who is not satisfied with how the matter is being handled has the right to withdraw from the attorney-client relationship at any time; it adds that court approval may be required in some matters and that the attorney may have a claim for the value of services rendered up to the point of discharge.[6] The same statement says a client is entitled to be kept informed as to the status of the matter and to request and receive copies of papers.[6]
Sources
- N.Y. Rules of Professional Conduct, Rule 1.5(a) (22 NYCRR Part 1200) — Legal Information Institute, Cornell Law School
- N.Y. Rules of Professional Conduct, Rule 1.5(c) — Legal Information Institute, Cornell Law School
- 22 NYCRR §§ 1215.1(a)-(c), 1215.2(a) — Legal Information Institute, Cornell Law School
- N.Y. Rules of Professional Conduct, Rule 1.5(d) — Legal Information Institute, Cornell Law School
- 22 NYCRR § 1210.1 — Legal Information Institute, Cornell Law School
- 22 NYCRR § 1210.1 (Statement of Client's Rights, items 2 and 6) — Legal Information Institute, Cornell Law School
- N.Y. Rules of Professional Conduct, Rule 1.18(a)-(b) — Legal Information Institute, Cornell Law School
- 42 U.S.C. § 2000e-5(k) — Legal Information Institute, Cornell Law School
- N.Y. Exec. Law § 297(10) — New York State Senate, Laws of New York
- N.Y.C. Admin. Code § 8-502(g). — New York City Commission on Human Rights
- 26 U.S.C. § 62(a)(20), (e)(18) — Legal Information Institute, Cornell Law School
- N.Y.S. Division of Human Rights, "Report Discrimination" — New York State Division of Human Rights
- Legal Services NYC, "Workers' Rights" (page read Oct. 5, 2026) — legalservicesnyc.org
- New York City Bar Association, "Get Legal Help" (page read Oct. 5, 2026) — nycbar.org