Fees Flashcards
Amount of Lawyer’s Fees
- Under the ABA: a lawyer’s fee must be reasonable
- Under the CA: the fee cannot be unconscionable or illegal – the fee must not be so exorbitant and wholly disproportionate to the services performed as to shock the conscience.
General Fee Agreements
ABA: GFA being in writing is encouraged not required However - ABA does require that the fee be communicated to the CL.
CA: ALL FAs over $1000 must be in writing UNLESS
* The CL is corporation
* The agreement was made during an emergency
* CL waives the writing requirement in writing OR
* The services are for a previous CL with similar services in which the fee can be implied.
What do FAs have to include in CA?
How compensation is calculated
The nature of legal services provided
Responsibilities of the lawyer and client
Contingency Fee Agreements (Requirements)
Under the MR, to be valid, a CFA must be in writing, signed by the client, state the methodology for determining the fee, and provide details on deductions for expenses, including whether such expenses are to be deducted before or after the contingency fee is calculated.
CA: require the client be given a duplicate copy of the agreement that is signed by both the lawyer and client, among other requirements.
What types of cases prohibit contingency fee agreements?
CFAs NOT allowed for domestic + criminal cases
Requirements for 3P Compensation
A lawyer may accept compensation from someone other than C only if
1- C gives informed consent
2- there is no interference with L’s independent professional judgment or with AC relationship AND
3- C info is kept confidential.
Retainers Fees
A lawyer MAY require advance payment of a fee from a CL BUT is obliged to return any unearned portion of the fee.
CA – may only charge a non refundable “true retainer” if the CL agrees in writing after disclosure that the fee is non-refundable.
Fee Splitting (Requirements)
Must only happen between lawyers.
Requirments for lawyers in different firms:
1- division is proportional to work done by each lawyer
2- CL agrees in writing AND
3- Total fee is rb
Referral Fees
Under ABA, a lawyer is generally prohibited from paying anyone for recommending services, except for permissible lawyer referral plans and services, reciprocal referral agreements that comply with MR, and nominal gifts of appreciation.
CA: Although a referral fee is generally impermissible, an exception exists for when an attorney gives a “thank you gift” to a person for a referral that results in employment of the attorney so long as it was not offered or given in consideration of any promise, agreement, or understanding that the gift or gratuity would be forthcoming or additional referrals would be made or encouraged in the future.
Fee Splitting with Non-Lawyers
A lawyer generally CANNOT share legal fees with a non-lawyer (including referral feees)
Exceptions for Fee Splitting with non-lawyer
The exceptions to this rule are:
(i) if the non-lawyer is paid over a reasonable period after the death of the lawyer according to the lawyer’s law firm operating agreement;
(ii) the lawyer purchases the practice of a deceased, disabled, or missing lawyer to the estate or to the representative of that lawyer;
(iii) fees are shared with law-firm personnel though a compensation or retirement plan; and
(iv) the lawyer shares court-awarded legal fees with a nonprofit organization that employed, retrained, or recommended employment of the lawyer in the underlying matter.
