Fees and Property Flashcards
What must a lawyer’s fee be?
Reasonable (considering factors like time and labor, novelty/difficulty, amount of money involved/results obtained, fee customarily charged in locality for similar services, etc.)
What is the general rule regarding fee agreements?
Must be adequately explained to client–unless lawyer regularly represents client, must, before or within reasonable time after commencing representation, communicate basis or rate of fee and expenses for which client is responsible
* Writing not required unless contingent agreement
What is the rule regarding advance payments?
Lawyer may require fee to be paid in advance, but must refund unearned portion of the fee if the client fires the lawyer or lawyer does not perform services
* Doesn’t apply to a true retainer
What is a contingent fee and what is the general rule regarding contingent fees?
A fee dependent on successful resolution of the case–must be reasonable
* Cannot use when facts of case make it unreasonable to do so (e.g., know a settlement will take 2 hours)
What are the requirements for contingent fee arrangements?
Must be in writing, and must disclose:
1. How fee will be calculated (including % for lawyer in event of settlement, trial, or appeal)
2. What expenses will be deducted from recovery
3. Whether expenses will be deducted before or after contingent fee is calculated
At the end of case, lawyer must give client written statement showing outcome, remittance to client, and how calculated
What happens if a lawyer is discharged during contingency case?
Discharged lawyer will be entitled to the reasonable value of their services performed up to the time of discharge
NOTE that claim doesn’t arise until contginency comes to pass (i.e., client still has to win)
When are contingency fees prohibited?
Criminal cases and domestic relations cases (subject to very limited exception)
Where must a lawyer place money they receive from a client?
In a client trust account, separate from lawyer’s own personal and business accounts
* Must be at institution approved by Virginia State Bar, unless otherwise directed by client in writing
What is the rule against commingling?
Lawyer MUST NEVER place own money or firm’s money into client trust account
* ONLY exception is to pay bank service charges, or funds to maintain minimum account balance to avoid bank service charges
What is the rule regarding disputed funds?
When a lawyer possesses property in which 2 or more people (one could be the lawyer) claim interests, disputed portion must be kept separate by the lawyer until resolution of dispute
* Lawyer must promptly distribute undisputed portions
* Applies equally to third parties who have claim over the property and to the lawyer himself if dispute over payment with client
Is it acceptable for a lawyer to split legal fees with other lawyers in the same firm?
Yes–additionally, can make payments to former partner or associate under separation or retirement agreement
When may lawyer share legal fees with outside lawyers?
If:
1. Client is advised of and consents to the participation of all lawyers involved and the terms of the division of the fee
2. Client’s consent is obtained in advance of rendering the legal services, “preferably” in writing
3. Total fee is reasonable
No requirement all lawyers be involved in the case (i.e., workaround to referral fee)
May a lawyer split fees with a nonlawyer?
No–subject to limited exceptions
* Lawyer and a non-lawyer may open a business together, but if any portion of that business involves giving legal advice, cannot split fees
