Fees and money

Question 1

When is a fee modification appropriate?

Answer 1

Generally, a modification is acceptable if:
1. if the modification is fair and reasonable; and,
2. if the modification is proposed or accepted by the client

If the proposed change changes the basic nature of original agreement or significantly increased the lawyer’s compensation, the change is acceptable if….
1.the modification is fair and reasonable; and,
2 is proposed or accepted by the client; and,
3.** there has been an unanticipated change in circumstances.**

Question 2

What are the requirements for contingency fees?

Answer 2

They must be:
1. Reasonable under the circumstances
2. Be in writing
3. Be signed by the client
4. Include the calculation method for fees and deductions
5. Include the fixed client expenses

At the end of representation, there must but a written statement showing the outcome/method of determining client’s portion of the recovery.

Question 3

In what types of cases are contingency fees prohibited?

Answer 3

Criminal cases and domestic relations cases where fee is contingent on securing a divorce or a certain amount of support.

Question 4

Can an attorney ever be required to give up earned fees?

Answer 4

Yes, if they are discharged from the case due to a clear and serious violation of their duties.

Question 5

How do courts determine the fees an attorney can recover upon discharge?

Answer 5

The amount is the lesser of the fair value of services rendered or the prorated proportion of fees contracted for.

In some cases a court can allow a higher fee to be recovered (no misconduct, severable services, no burden to client)

Question 6

When may courts allow attorneys to recover higher fees upon discharge?

Answer 6

1. when there was no misconduct
2. when the services performed were severable
3. when allowing this higher recovery would not burden the clients or impact their ability to find new counsel.

Question 7

Rules regarding unearned fees

Answer 7

An attorney may not withdraw fees from a client’s trust account before they are earned.

An attorney cannot keep/must return unearned fees at the end of representation.

Question 8

Retainers

Answer 8

These are not considered unearned fees. Attorneys can accept and keep a retainer as a payment for keeping their availability open.

Question 9

What is the rule for splitting fees amongst attorneys from different law firms?

Answer 9

1. If the lawyers are not jointly responsible for representation, the fee must be split in proportion to each services rended
2. Client must agree in writing to the arrangement
3. The total fee must be reasonable

Question 10

What is the rule for splitting fees amongst attorneys from the same law firm?

Answer 10

1. The lawyers have to agree to share the fees
2. the fees must be reasonable

(note: the client does not need to provide signed/written informed consent, the fees don’t need to be proportional, the attorneys don’t need to assume joint responsibility.)

Question 11

Can a lawyer share fees with a non-lawyer?

Answer 11

No except…
1. if the lawyer dies, to pay their estate or rep. a death benefit
2. if a lawyer dies, disappears, or becomes disabled, to pay their estate or rep. for the purchase of their practice
3. To pay non-lawyer employees compensation or retirement plan (profit sharing and general revenue, cannot be from fees from specific clients/cases)
4. To pay legal fees to a non-profit that retained/employed/recommended the lawyer.

Question 12

How can you determine whether a fee is reasonable?

Answer 12

Compare it to other legal fees of lawyers in the area.

Question 13

Can a lawyer provide financial assistance to their clients?

Answer 13

Generally no. Except…
1. the lawyer can advance court costs and litigation costs
2. a lawyer representing an indigent client can pay litigation and court costs
3. a lawyer representing an indigient client pro-bono can pay ligitation costs and for modest living expenses, but CANNOT seek/accept reimbursement or imply to prospective clients that they will do this

Question 14

What are the requirements for a referral agreement

Answer 14

1. must be reciprocal
2. not exclusive
3. client is informed of the nature of the agreement
4. the agreement does not interfere with the laywer’s professional judgement
5. the agreement is not indefinite

Question 15

When are lawyers permitted to give things of value to others?

Answer 15

1. sale of law practice
2. nominal gifts
3. reasonable payment for ads
4. reciprocal referral agreements
5. legal services plan, non-profit referral program, qualified lawyer referral service