Clients Rights, Retainer Agreements & Fees

Question 1

Posting of Clients Rights

Answer 1

office in NY –> post a statement of clients rights where it is visible to clients

Question 2

Written Letter of Engagement

• rule?
• what must it include?

Answer 2

ROL- must provide client w/ a written letter of engagement before commencing the representation or w/in a reasonable time thereafter

Must Include:
1- scope of the rep
2- explanation of fees, expenses, billing practices
3- notice of client’s right to arbitrate fee disputes

NOTES

• if there is a signif change in the fee or scope you have to give an updated letter of engagement
• a signed retainer agreement can take the place of a letter of engagement if it contains the 3 required items
• Where an entity engages an attorney to rep a third party, the attorney must send a letter of engagement or retainer agreement to the entity and the third party

Question 3

Letter of Engagement NOT necessary in 4 situations:

Answer 3

1- rep of a client where the fee is expected to be less than $3000 [still must orally communicate scope and basis of fee]

2- rep where the attorneys services are of the same general kind as previously rendered and paid for by the client [still must orally communicate scope and basis of fee]

3- representation in Domestic Relations matters

4- rep where no material portion of the services are to be rendered in NY

Question 4

Def: Domestic Relations Matters

Answer 4

divorce, separation, annulment, custody, visitation, maintenance, child support or alimony, or to enforce or modify a judgment or order in connection with any such claim, action or proceeding

Question 5

SPECIAL DOMESTIC RELATIONS RULES

Answer 5

1- fee agreement MUST be in writing signed by both lawyer and client
2- lawyer must provide statement of client rights and responsibilities at the initial conference and prior to the signing of a retainer agreement.
3- get a signed acknowledgment of receipt from the client.
4- no non-refundable fees in DR matters or in any other matter
5- Cannot use contingency fee in DR matter (including to collect unpaid alimony or child support)
6- periodic billing must be sent out every 60 days and at conclusion of case. Attorney must send back any unused portion of the retainer.

Question 6

Contingent Fees Rule

Answer 6

A lawyer’s fee may be contingent on the outcome of the matter for which the service is rendered, provided that the fee is reasonable. Generally, a contingency fee is reasonable if it is 33%. Contingency fees in personal injury and wrongful death actions cannot exceed 33%

NO CONTINGENCY FEES IN CRIMINAL, QUASI-CRIMINAL, AND DOMESTIC RELATIONS MATTERS

Question 7

Contents of Contingency Fee Agreement

Answer 7

1- scope of the rep
2- explanation of fees, expenses, billing practices
3- notice of client’s right to arbitrate fee disputes
4- method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial, and appeal
5- litigation and other expenses to be deducted from the recovery;
6- whether such expenses are to be deducted before or, if not prohibited by statute or court rule, after the contingent fee is calculated. [In PI & wrongful death matters the expenses must be deducted before the lawyer’s contingency fee is calculated]
7- clearly notify the client of any expenses for which she will be liable regardless of whether the client is the prevailing party.

Question 8

Closing Statement in Contingent Fee Matter

Answer 8

Upon conclusion of a contingent fee matter, the lawyer must provide the client with a writing stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

EXAMPLE- I recovered $100,000 on your behalf in settling your personal injury case. The expenses for medical experts and other related expenses, which I advanced, totaled $40,000. My fee is 33% of the remainder ($60,000), or $20,000. I am enclosing a check for your share, $40,000.

Question 9

Fee Division w/ Non-Lawyer

Answer 9

• a lawyer cannot divide a legal fee w/ a non-lawyer

Exceptions

• salaries, retirement plans, bonuses, as long as they are not tied to fees generated in a specific matter
• payments to spouse of deceased partner, or to estate, to compensate for fees earned by partner prior to death

Question 10

Working w/ non-lawyers

Answer 10

• lawyer cannot be a partner with a non-lawyer if any part of the partnership activity involves the practice of law
• An attorney and non-attorney can share office space, so long as the space is physically separate in fact and appears so to the public (precautions must ensure that non-lawyers clients aren’t coerced to use the lawyer)
• No referral fees w/ non-lawyers

Question 11

Fee Splitting w/ Lawyers OUTSIDE the Firm

Answer 11

Can’t do it UNLESS:
1- division is (i) in proportion to % work performed or (ii) in a writing given to the client each lawyer assumes joint responsibility for the rep; AND
2- client can consent in writing to employment of the other lawyer after a full disclosure that a division of fees will be made, including the % each will make; AND
3- the total fees of both lawyers combined is not excessive

Question 12

Fee Dispute Resolution Program

Answer 12

• subject to arbitration
• client must be informed of this option in the letter of engagement and when a fee dispute arises

EXCEPTIONS TO PROGRAM INCLUDE

• criminal matter
• disputes less than $1000 or more than $50,000
• claims involving substantial legal questions, including malpractice
• disputes where the fee has been determined pursuant to statute or rule and allowed as of right by a court
• disputes where no attorneys services have been rendered for more than 2 years