The attorney's fee: compensation for the work
The contingency fee is the attorney's own compensation for handling the case — calculated as a percentage of the settlement or award. It's earnings, not a reimbursement, and it's what the attorney keeps for taking on the risk and the work of the case.
Case costs: real expenses the case required
Case costs are something entirely different: actual out-of-pocket expenses the case genuinely needed. This typically includes expert witness fees, court filing fees, the cost of obtaining medical records, deposition transcripts, and similar litigation expenses. These are reimbursed, not earned.
Arizona actually requires your agreement to spell this out
ER 1.5(c) doesn't leave this to chance: a contingent fee agreement must be signed by the client and must state the method by which the fee is determined, including what percentage applies, what litigation expenses will be deducted from the recovery, and — specifically — whether those expenses come out before or after the contingent fee itself is calculated.
Why that order genuinely changes your number
Calculating the attorney's fee as a percentage of the full settlement before subtracting case costs produces a different net result than calculating the fee after costs have already been subtracted. On a meaningful settlement with real litigation costs, that difference can add up to a real dollar amount — exactly the reason ER 1.5(c) requires the agreement to say which approach applies, rather than leaving it ambiguous.
Who fronts the money while the case is pending
Commonly, the attorney's office advances case costs as the litigation proceeds, with reimbursement coming out of the eventual settlement or award, exactly as spelled out in the written agreement ER 1.5(c) requires.