Normally the contingeht fee is taken from the gross recovery. It is not added on or paid by the losing party. You should have a written retainer agreement with your lawyer that spells all this out.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
The terms of your contingency fee agreement will govern. Generally, the percentage is computed on the gross recovery and is paid from the settlement amount. Since this is a settlement, and not a judgment, your employer will not be required to pay any additional sums, such as your attorney's fees. So, yes -- you give up 33% if that is what your agreement states.
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This is a question you should address with your own attorney. Why ask us when you have an attorney who knows your case, your settlement and your fee agreement?
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