Fiduciary Duties Flashcards
Define
Fiduciary Duties
A lawyer has the duty to act with finanacial acuity and responsibility with client funds.
Attorney Fees
ABA: Fees must not be unreasonable
CA: Fees must not be unconscionable
Unreasoanble Fees
ABA
Under the totality of the circumstances, fees must be reasaonbable and take into account:
1. the labor,
2. novelty,
3. difficulty
4. skill
5. time required,
6. result obtained, and
7. experience of the attorney
Unconscionable Fees
CA
Based on all the facts and circumstances existing at time of agreement entered into except where parties believe fee will be affected by later events. Factors include:
1. Fraud;
2. Non-disclosure of mateiral facts;
3. Proportional value of fee to services performed;
4. Sophistacation of lawyer and client
Requirements for Non-Contingency Fees
A non-contingency fee requires
1. An agreement of how fee will be calculated
2. In writing
Unless:
1. Less than $1,000
2. Corporate Client
3. Routein Service for regular client
4. Emergency
Requirements For Contingency Fees
A contingency fee must be
1. A written agreement including
2. % of Recovery
3. Expenses to be reduced
4. Whether % is taken before or after expenses.
Prohibited for
1. Domestic Cases
2. Criminal Cases
Fee Splitting Within the Firm
Fee splitting within the firm is permissible.
Fee Splitting Outside the Firm
NO fee splitting, unless:
1. Written agreement to divide fee
2. Client provides informed written consent
3. Total fee not increased soely because of split agreement
Fee Splitting with Non-Lawyers
Fee splitting with non-lawyers is not alllowed excpet for death benefits and fees shared in pension or salary to non-attorney
Gift and Referral Fee to Non-Attorney
May give a gift or referral fee so long as the gift was not anticipated by non-laweyer or for ongoing services.
Partnerships with Non-Lawyers
Prohibited.
Duty for Client Property
A lawyer has a duty to safeguard client property and may do so in an office safe or safe deposit box.
ISSUE SPOT: Any time a lawyer looses, destroys, or mishandles any type of client property.
Duty to Keep Records
A laywer has the duty to provide accounting and notify client when property is received.
A lawyer must keep records for 5 years and then may dispose.
How must a lawyer hold client funds?
All client funds recived must be held in a trust account.
A laywer may not borrow or comingle client money with personal funds.
Two typs of ways to hold:
1. Interest bearing account (for long-term clients or large amount)
2. IOLTA Account (for short term clients.
The interest pays for any service charges associated with the account, and the remainder goes to the State Bar.
