Here is how we do it at my firm.  Expenses are entered normally.  All of our time goes in as No Charge (since we don't bill hourly fees for our contingency fee clients).  And we bill clients each month, giving them an opportunity to pay their costs as they go, instead of accruing interest on them.

Once we get a settlement or award, we put the funds into our Trust Account (i.e., Client Funds in Timeslips), then we go to Accounts Receivables and enter what is called an "Invoice" (from the list which includes Payment, Credit, Write-off, Refund, etc.) for the amount of contingency fees that the firm is charging the client.

Later, we transfer those funds from the Trust Account as a payment to the firm, and send whatever amount goes to the client.

I hope this helps.

If you don't make an expense slip for the contingency, but use a time slip instead, you should be in better shape as the contingency is really paying for time, not an expense. You could use one flat fee slip to charge it.

Depends which reports you use as yes, things like realization and fee credit will be tough to track back. You might need to do some manual calculations based on existing data.