Compensation for legal services

Question 1

Duty to Avoid Fee Misunderstandings.

Answer 1

i. when a lawyer has not regularly represented a client, fee must be communicated before or within a reasonable time after commencing representation
ii. ABA: communication should be in writing

iii. CA: communication must be in writing for fees > $1000, unless:
a. lawyer acted in an emergency to protect client’s rights
b. client is a corporation
c. client express states she does not want a written fee agreement
d. legal services are same kind client paid for previously
e. writing is impractical

Question 2

Reasonable Fees

Answer 2

i. fee must be reasonable in light of
a. time, labor, and skill required
b. customary fee for similar work
c. amount involved and result obtained
d. attorney’s skill, reputation, etc.

ii. CA—rule is stated in the negative. Fees must not be unconscionably high.
iii. Can’t be a functional penalty or forfeiture.

iv. Double billing is normally unreasonable.
a. CA allows this if attorney disclosed at the outset of relationship and obtain clients’ consent.
v. If there’s a dispute ABA suggests arbitration
a. CA requires it

Question 3

Contingent fees

Answer 3

i. must be in writing and signed by client
ii. must state method by which fee is determined

iii. ABA: contingency fees are prohibited in criminal cases and domestic relations matters (except to recover a court-ordered judgment)
a. CA rules are silent, and contingent fees OK so long as they do not promote dissolution of a marriage.
b. Contingency fees may create a conflict in these cases.

iv. lawyers hired on contingency who are discharged are entitled to reasonable value for services if client wins the case: in quantum meruit

Question 4

Fee Schedules

Answer 4

i. minimum fee schedules set by state bars are illegal (antitrust violation)
ii. maximum fees for certain types of work have been imposed

Question 5

Fee Splitting

Answer 5

i. Depends on category:
a. Ok to split fees with lawyers in lawfirm
b. MAY split fees with lawyers outside your firm.

ii. lawyers may split fees if in writing, stating each share the lawyer receives, and signed by the client, and the total fee is reasonable
a. fees must be divided in proportion to services performed,

b. CA allows division other than in proportion to services performed, or divided in any proportion if each lawyer assumes joint responsibility for the representation, it’s reasonable, and client consents.

iii. Fee splitting with non lawyers are not allowed
a. To prevent UPL
b. Salaries to non-lawyer staff or sharing of court awarded fees with nonprofit is OK
c. Also can pay lawyer referral services.

Question 6

Referral Fees

Answer 6

i. ABA: referral fees are unethical

ii. CA: lawyers can pay referral fees if
a. client gives written informed consent,
b. total fee is not unconscionable, and
c. total fee is not increased due to the referral