6.A Fee Agreements Flashcards
Contingency fees - what happens if you withdraw before judgment?
Can recover proportion or work completed pre-termination (in quantum meruit)
What are the rules if you want to split fees with another attorney?
Generally, at federal law, you have to disclose it in writing to the client then get consent. Fees must be proportionate based on services provided and the fee in total must be reasonable.
In CA, the fee can’t increase because of the association/split. You disclose it in writing, telling them the division, its terms, and identity the lawyers/firms. Then you memorialize it in a written agreement. But must have client’s written consent (when entered or reasonably practicably thereafter).
Always fine within the firm.
Can you split your fees with a non-lawyer?
Generally, no. You can share with paralegals, but you must be responsible for their work. If a lawyer dies, you can pay fees earned to their heirs. If you’re working for a non-profit (or they recommended you), you can share court awarded legal fees (on in CA, any legal fees)
What are the rules around the height of your legal fees?
They just need to be reasonable - federal standard.
Not unconscionable (shock the conscience) - CA.
Relevant factors:
Fixed or contingent?
What is MARKET?
It is COMPLEX - is there a tight TURNAROUND?
Does your particular EXPERTISE play a role?
How will it affect your other matters/employment?
What’s the relationship like (nature/length)
In CA, they’ll also consider relative sophistication. It’s probably not going to be reasonable if there was overreaching or fraud.
How should you memorialize your fixed fee agreement?
If they’re a regularly represented client, no need. Otherwise, you have to tell them the scope, fee, expenses, at the time or within a reasonable time after you’ve started.
CA: Has to be in writing (or void), even if it’s just for a retainer, if you reasonably expect the fee to exceed $1k, unless there’s an emergency (impractical, impossible?), it’s a corporation, or you represent them regularly.
How should you memorialize your contingent fee agreement?
Must be in writing (under federal rules, that’s not the case for fixed fee, but is the case for contingent) and signed by client (both lawyer and client in CA).
Must state fee (calculation), costs and expenses (out before/after their cut) (+ in CA any other addition compensation, that it is negotiable, not fixed, and OK to file lien).
Not permitted for family law or criminal matters.
Can you pay referral fees?
Generally, no.
Can participate in referral services - but no referral fee.
Reciprocal relationships between lawyers - but no referral fee. Must be disclosed.
Reciprocal relationship with non-lawyers (same) but also must be non-exclusive and must explain terms to client (at time of referral).
Gift: Ok for recommendation, Just must not be a referral payment or be for the purpose of encouraging referrals.
Client money
Money –> seperate trust account. Can’t borrow/comingle, unless settlement/judgment, but take fees out at earliest reasonable time. If your advance fees went into the a/c, can withdraw as earned (unless disputed).
Fixed fees can go straight into your operating account (CA: notice that it can go int trust a/c if preferred and can withdraw unearned fee + written consent if >$1k).
Records
Keep written record of a/c for 5 years (CA: + ledger for each client and journal with names/dates/balances)
General Rule: Funds/property given to lawyer
Duty to safeguard with utmost care
What do you do with physical property a client gives you?
Notice of receipt + put it in a security deposit box/secure location + keep separately identified + keep records for 5 years + distribute per their instructions.
