Fee Arrangements Flashcards
Fee Amount Requirements
[ABA][CALIFORNIA]
ABA: An attorney cannot charge an unreasonable fee.
CA: AN attorney cannot charge an unconscionable fee.
Communication of Flat Fees
All rate or fee arrangements must be communicated to the client before, or within a reasonable time after, the relationship commences.
Must also include nature of services, responsibilities of parties, and basis for compensation.
Reasonableness of Fees
[ABA]
Under the MR, fees must be reasonable based on the circumstances which include factors such as the time, labor, and skill required to perform the work.
Reasonableness of Fees
[CALIFORNIA]
In California, fees must not be unconscionable, which is judged by factors including (among others):
1) fraud/overreaching
2) whether the fee is proportionate to the value of services performed, and
3) the relative sophistication of the lawyer and the client.
4) Fails to disclose material facts
Writing Requirement: California Specific Rule
California requires that a contract for services be in writing when it is reasonably foreseeable that the total expense to a client, including attorney’s fees, will exceed $1,000.
A copy of the written contract, signed by both parties, must be given to the client or the client’s representative.
[Like with other fees, must also include nature of services, responsibility of parties, and basis for compensation.]
What are the EXCEPTIONS to the California Fee Writing Requirement?
[Think: CHEW]
1) Corporations
2) History of similar services provided to client in the past
3) Services are provided in an emergency
4) Client waives in writing the right to a written fee requirement
Does the ABA require fee arrangements [other than contingent fees] to be in writing?
No, although it is preferred!
ESSAY TIP
When should you mention California’s Written Fee Requirement?
ANYTIME FEES ARE MENTIONED! LITERALLY EVERY SINGLE TIME!
Contingency Fee Agreements
Attorneys may charge a fee contingent on the outcome of the case.
What is required for a valid contingency fee agreement?
[ABA] [CALIFORNIA]
1) In writing by C (and L, in California)
2) Includes basis/explanation for fee calculation
3) C’s liability for fees and expenses
4) Whether fees will be deducted before or after caluclation
5) [CA only]: Inform C that fee is negotiable
6) [CA only]: Inform C may have to pay for any matters not covered by the fee agreement
When is a contingency fee prohibited?
1) Criminal cases
2) Domestic cases that hinge on the total spousal/support award
ESSAY TIP: Even if the facts point to a fee being contingent, should you discuss whether there is a reasonable flat fee?
Yes!!!
Advancement of Court Costs
[ABA] [CALIFORNIA]
A lawyer may advance litigation costs to the client.
While clint is usually ultimately liable, repayment may be made contingent on the outcome of the case.
Lawyer’s Recovery of Fees in Quantum Meruit
When a fee arrangement is fixed or hourly and the lawyer’s services are terminated early, the lawyer can recover in quantum meruit for the reasonable value of services rendered, although a cap on the lawyer’s recovery may apply.
ESSAY TIP: Could an attorney recover in quantum meruit even if they have not incurred any costs yet?
Maybe!
Depends on the amount of hours that they spent preparing for the case, and their level of competency.
