What do we call fees that are based on the outcome of a transaction or service performed?

The term for fees that are based on the outcome of a transaction or service performed is known as contingent fees. These fees are contingent upon certain results being achieved, such as a successful transaction or specific performance outcome. This arrangement is common in various professional services, including legal and accounting contexts, where the service provider’s compensation is dependent on the success of their work.

Contingent fees can create an incentive for professionals to strive for the best outcomes for their clients since their payment is directly tied to the results they deliver. It’s important for professionals who work under such arrangements to be aware of the ethical implications and regulatory guidelines surrounding contingent fees, as some circumstances may prohibit or restrict their use.

In contrast, standard fees refer to a pre-determined amount set for services rendered without consideration of the results. Fixed fees represent a specific dollar amount agreed upon before the service begins, regardless of the outcome. Variable fees can change based on certain factors or deliverables but are not necessarily tied directly to the results achieved in the same way contingent fees are.