Legal fee models in 2026: contingency fees, shared success and alternatives to hourly billing

Hourly billing under pressure

The hourly billing model has been the de facto standard for large Spanish firms for decades. In 2026, it faces three converging pressures:

1. Sophisticated clients: companies demand cost predictability before engaging.
2. Generative AI: if AI reduces a brief from 4 hours to 40 minutes, hourly billing punishes the more efficient firm.
3. New entrant competition: online legal service platforms offer flat fees for standard matters.

Contingency fees in Spain

Art. 35 of Law 34/2006 and Art. 45 of the General Lawyers' Statute (EGAE, RD 135/2021) permit contingency fees with requirements:

1. Must be agreed in writing before starting.
2. Lawyer must inform the client of other fee alternatives.
3. Cannot be used in proceedings involving civil status or fundamental rights (Art. 45.3 EGAE).

Growing alternative models

• Fixed Fee: ideal for predictable matters.
• Milestone Fee: payment at case stages.
• Monthly Retainer: unlimited access for a fixed monthly fee (common for corporate clients).
• Value Billing: base fee + percentage of value obtained for the client.

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