Entering into Lawyer-Client Relationship: Establishing Compensation for Legal Services

Question 1

What is the RPC rule w regards to communicating fee?

Answer 1

RPC rule –>

when lawyer has not regularly represented client, the fee must be communicated to client, preferable in writing before or within a reasonable time after commencing representation

Question 2

What is the CA rule w regards to communicating fee?

Answer 2

CA requires –> WRITTEN fee agreement if representation exceeds $1,000:

EXCEPTIONS:

1. client is corporation
2. client states in writing that they dont want written fee agreement
3. legal services are same kind client previously bought and paid for
4. lawyer acted in emergency to protect client’s rights
5. writing is impractical for other reasons

Question 3

What are the rules re: reasonableness of fee?

Under RPC ?

in CA?

Answer 3

RPC —> fee must be reasonable based on factors such as time, labor, skill, customary fee in locality for similar work, experience, ability reputation of attorney.

CA rule –> prohibits “unconscionable fees”

Question 4

What are the rules relating to contingency fees?

When is it prohibited?

Answer 4

Contingency fee must:

1. be IN WRITING signed by client
2. state method by which fee is to be determined

Under RPC –> prohibited in

1. DR cases (except recover of postjudgment balance)
2. criminal cases

NOTE –> CA is silent on contingency fees in DR and criminal cases

Question 5

What happens if a lawyer is hired on a contingent basis and later discharged?

Answer 5

Attorney is entitled to REASONABLE VALUE of services performed IF and WHEN client wins case

Question 6

What are the rules on referral fees (splitting fees btwn lawyers)?

Under RPC?

In CA?

Answer 6

RPC –>

(1) Referral fees are prohibited unless:
i. division is in proportion to services performed by each lawyer; OR
ii. each lawyer agreed to be jointly responsible

(2) FEE split MUST:
(i) be in writing
(ii) state share each lawyer will recieve
(iii) be signed by client

CA RULE –> referral OK if:

(1) client knows all terms and consents in writing; AND
(2) total fee is not unconscionable or increased by referral

Question 7

Is attorney required to have malpractice insurance?

Answer 7

NO.

HOWEVER –> if they KNOW or SHOULD KNOW that they don’t have insurance, they must inform the client at the time of engagement IF it is reasonably foreseeable that the work will exceed 4 hours.

If lawyer DOES NOT give notice, and subsequently knows or should know he no longer has insurance, he should let client know within 30 days.

This rule does NOT apply to:

1. gov lawyers,
2. in house lawyers
3. services rendered in emergency
4. situations where lawyer has previously advised client