Attorney-Client Relationship

Question 1

When is an attorney-client relationship created?

Answer 1

When a reasonable person would believe it to exist.

Question 2

What fees can an attorney charge?

Answer 2

Reasonable fees, which are subject to court review based on the following factors:

1. Time
2. Novelty
3. Amount in controversy

Question 4

When will contingent fee agreements be enforceable?

Answer 4

When they are

1. reasonable
   
   1. based on time, novelty, and amount in controversy
2. in writing
3. not for criminal and family law/domestic matters
4. signed agreement including a calculation methodology

Question 5

What can an attorney do with a retainer fee?

Answer 5

• Unearned fees: escrow (trust); returned at end of relationship
• Costs advanced: escrow (trust)
• Attorney’s and client’s accounts must be separate.
• PA is an IOLTA jurisdiction (Interest on Lawyer’s Trust Accounts)

Question 6

How else can an attorney receive compensation?

Answer 6

1. By taking stock in a client corporation instead of a cash fee OR
2. By taking a mortgage on client’s property to secure payment of a cash fee.

These are known as taking an interst in a client.

Question 7

Under what circumstances will a business transaction with a client or the acquisition of an interest in a client’s property be allowed?

Answer 7

1. Terms are in writing
2. Terms are fair and reasonable
3. Attorney must advise client in writing of the prudence of independent counsel to review arrangement
4. Client must provide informed consent, in writing, signed.

Question 8

When is fee sharing allowed?

Answer 8

Only when

1. the overall fee is fair
2. the “kickback” is disclosed to the client
3. the client consents to the kickback
4. the fees are only being shared with lawyers
5. only legal fees are being shared.

Question 9

How can you sell your practice?

Answer 9

You have to stop practicing and sell your whole practice to one lawyer/firm.