client's rights, retainer agreements and fees Flashcards
postings
every atty’s office in NY must have statement of client’s rights posted in office in visible manner
written letter of engagement
atty who undertakes to represent a client and enters into arrangement for charges, or collects any fee from a client shall provide to client a written letter of engagement before commencing action, or within a reasonable time thereafter
letter must include:
1) scope of representation
2) explanation of atty’s fees and expenses, and
3) notice of client’s right to arbitrate
where there is a significant change in fee or scope of services, updated letter of engagement shall be provided to the client
NOTE: a signed retainer agreement can take place of letter of engagement if it contains the above 3 items
NOTE: where an entity, such as an insurer, engages an atty to represent 3P, such as insured, the atty must send a letter of engagement or retainer agreement to entity AND insured
Letter of engagement not necessary in following situations:
a) representation of a client where fee to be charged is expected to be less than $3k
b) representation where atty’s services are of same general kind as previously rendered and paid for by client
c) representation in domestic relations matters
d) representation where no material portion of services are to be rendered in NY
in (a) and (c) above, lawyer must still orally communicate scope of representation and basis of rate
domestic relations matters
any representation for divorce, separation, annulment, custody, visitation, maintenance, child support or alimony (so claim, action, proceeding, modification of judgment, etc.)
Rules:
1) fee agreement must be in writing, signed by lawyer and client
2) lawyer must provide prospective client with statement of client rights and responsibilities at initial conference and prior to signing of written retainer agreement. atty shall obtain signed acknowledgment of receipt from client.
3) no nonrefundable fees in domestic relations matters, or in any other matter
4) cannot use contingency fee to collect unpaid alimony or child support (*diff from ABA rule)
5) periodic billing must be sent out every 60 days and at conclusion of case, atty must send back any unused portion of retainer
contingent fees
rule: a lawyer’s fee may be contingent on outcome of matter for which service is rendered, provided that fee is reasonable (generally reasonable if 33% or less)
in addition to regular reqs for letter of engagement or retainer agreement, such agreements or letters on contingency fee matters must include:
a) method by which fee is to be determined, including percentage or percentages that shall accrue to the lawyer in event of settlement, trial, and appeal
b) litigation and other expenses to be deducted from recovery; and
c) whether such expenses are to be deducted before or, if not prohibited by statute or ct rule, after contingent fee is calculated. in personal injury and wrongful death matters, expenses must be deducted before lawyer’s contingency fee is calculated
NOTE: writing must clearly notify client of any expenses for which client will be liable regardless of whether client is prevailing party
closing statement
closing statement: lawyer must provide client with written statement upon conclusion of matter, stating the outcome and if there is a recovery, showing remittance to client and method of its determination
contingent fees prohibited in certain matters
a) criminal matters (including quasi-criminal matters, like going before medical licensing bd about losing license); incentives not permitted either
b) domestic relations matters
fee division with non-lawyer
1) lawyer cannot be a partner with a non-lawyer if any part of partnership activity involves practice of law
2) a lawyer cannot divide a legal fee with a non-lawyer
Exceptions:
- payments for salaries, retirement plans, bonuses, profit sharing, as long as not tied to fees generated in specific matter
- payments to spouse of deceased partner, or to estate of deceased partner, to compensate for fees earned by deceased partner prior to death
3) an atty and non-atty can share office space, so long as space is physically separate in fact and appears so to public. precautions must ensure that non-lawyers clients are not coerced to use lawyer for legal matters.
4) lawyer cannot give anything of value to person or org to recommend or obtain employment by a client, or as reward for having made a recommendation resulting in employment by client (means no referral fees are permitted)
fee splitting with lawyer outside firm
a lawyer shall not divide a fee for legal services with another lawyer who is not associated in same firm unless:
1) division is:
- in proportion to percentage of work performed, or
- in writing given to client, each lawyer assumes joint responsibility for representation;
2) client consents to employment of other lawyer after a full disclosure that a division of fees will be made, including % each lawyer will receive, and client’s agreement is confirmed in writing, AND
3) total fees of both lawyers combined is not excessive
NOTE: a lawyer formerly associated in a law firm may be paid a portion of fees generated by law firm pursuant to separation or retirement agreement
fee dispute resolution program
1) in NY, in a civil matter, fee disputes between lawyer and client are subject to arbitration at client’s election. Client must be informed about this possible option: a) in letter of engagement, and b) when a fee dispute arises.
2) exceptions to mandatory program:
a) representation in a criminal matter
b) amts in dispute involving a sum of less than $1k or more than $50k
c) claims involving substantial legal questions, including legal malpractice
d) disputes where fee to be paid by client has been determined pursuant to statute or rule and allowed as of right by a ct
e) disputes where no atty’s services have been rendered for more than 2 years
