---
title: "Compare a contingent-fee or litigation-funding agreement with the rules that govern it"
url: "https://ailawframework.com/obligations/costs-billing-and-litigation-funding/compare-a-funding-uplift-or-common-fund-agreement-to-the-current-rules/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A42-T1-R2-US"
practice_area: "Costs, billing & litigation funding"
tier: "red"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Compare a contingent-fee or litigation-funding agreement with the rules that govern it

> Extract the percentage, the expense waterfall, who controls settlement, and any funder’s repayment terms into a table. Write nothing into the agreement.

Canonical page: https://ailawframework.com/obligations/costs-billing-and-litigation-funding/compare-a-funding-uplift-or-common-fund-agreement-to-the-current-rules/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Costs, billing & litigation funding](https://ailawframework.com/obligations/costs-billing-and-litigation-funding.md) |
| Human involvement | Red: Lawyer writes; AI may check, clarify or collect data |
| How AI is used | Extract the percentage, the expense waterfall, who controls settlement, and any funder’s repayment terms into a table. Write nothing into the agreement. |
| What the lawyer must review | A contingent fee must be in a writing signed by the client and must state the method of calculation, including percentages on settlement, trial or appeal, whether expenses come off before or after the fee, and the expenses the client pays even if there is no recovery (Rule 1.5(c)). On conclusion the lawyer provides a written statement of the outcome and, if there is a recovery, the remittance. Rule 1.5(d) bars a contingent fee for securing a divorce or for representing a criminal defendant. There is no national litigation-funding statute. In the District of New Jersey, L. Civ. R. 7.1.1 requires a filed statement only where third-party litigation funding exists; a negative statement is not required. The lawyer opens the forum’s local rule and the state’s professional-conduct rule before treating any other court as if the New Jersey rule applied. |
| Written for | United States |
| Applies to | [Compare a funding, uplift or common-fund agreement to the current rules](https://ailawframework.com/obligations/costs-billing-and-litigation-funding/compare-a-funding-uplift-or-common-fund-agreement-to-the-current-rules.md) |

## Checking plan

- What the AI does: Extract the percentage, the expense waterfall, who controls settlement, and any funder’s repayment terms into a table. Write nothing into the agreement.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- The New Jersey clarification is dated 29 July 2021 and describes a rule that took effect on 21 June 2021. It does not set the contents of the statement. Open the rule text for the case.
- Formal Opinion 512 still requires a reasonable fee when a tool shortens the work, including on a contingent or flat fee.

## Sources

- [ABA Model Rule 1.5, Fees](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_5_fees/) (checked 2026-10-22)
- [U.S. District Court for the District of New Jersey, Notice to the Bar clarifying L. Civ. R. 7.1.1 (29 July 2021)](https://www.njd.uscourts.gov/sites/njd/files/NoticetoBarreL.Civ_.R.7.1.1clarification_0.pdf) (checked 2026-10-22)
- [ABA Formal Opinion 512, Generative Artificial Intelligence Tools (29 July 2024)](https://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/ethics-opinions/aba-formal-opinion-512.pdf) (checked 2026-10-22)

## Forms and precedents for this task

| Form or precedent | Kind | AI level | Summary |
| --- | --- | --- | --- |
| [Statement disclosing third-party litigation funding (United States)](https://ailawframework.com/precedents/costs-billing-and-litigation-funding/us-third-party-litigation-funding-disclosure.md) | Court document | Red | A lawyer's decision note and a short statement for a case in which a non-party funds fees or expenses on a non-recourse basis.… |
| [Worksheet comparing a draft bill with the costs disclosure](https://ailawframework.com/precedents/costs-billing-and-litigation-funding/bill-disclosure-comparison.md) | Checklist | Yellow | Internal worksheet that sets a draft bill beside the last costs estimate, later updates, uplift and AI-assisted time, before the bill is sent. |

Signed-in accounts can read the full text of each one.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*