Financial Duties to your Client Flashcards
What must a fee agreement contain, in a non-contingent fee case?
(i) how the fee is calculated
(ii) what services are covered
(iii) the lawyer and client’s duties
CA also requires agreements to be in writing, unless (i) the fee is under $1,000, (ii) with a corporate client, (iii) for routine services for a regular client, or (iv) it’s an emergency or impractical
What must contingent fee agreement contain?
Must be written and signed by the client and contain:
1) your percent; and
2) what expenses are to be deducted from the recovery
3) whether your percent is taken before or after expenses
CA also requires
4) how work not covered by the contingency fee will be paid, and
5) that lawyer’s fees are negotiable
What types of actions allow contingency fees?
All those that are not domestic relations or criminal cases. CA case law allows for contingency fee cases in domestic relations as long as they do not promote dissolution
What happens if a lawyer is fired before the end of the case and is working on a contingency fee, assuming the lawyer has done some work?
He may recover in proportion to the work done.
When are fees too high?
ABA: Fees must be reasonable taking into account the labor, novelty, difficulty, skill and timing required, result obtained, the experience of and other demands on the attorney, fee arrangement, etc.
CA: Fees must not be unconscionably high
Bud hires Vinny to represent him in a malpractice suit. Vinny drafts a contract providing that Vinny will receive 1/3 of the recovery as a contingent fee, and that if Bud fires Vinny or refuses a settlement offer that Vinny believes is fair and reasonable then Bud will immediately pay Vinny $600 per hour for all the work done to date. OK?
Contingent fee: 1/3 and is okay
Refusal of Settlement agreement: as long as offered as grounds for withdrawal it is okay.
$600/hr payment if fired? This is iffy, if it is a good faith valuation of Vinny’s services it is okay. If it is functionally a penalty or forfeiture, then it is not enforceable.
Lawyer represents two defendants in a mass tort case, Company A and Company B, on an hourly fee basis. Lawyer attends a two hour status conference on the case representing both clients. May lawyer bill two hours to each client?
In CA, only if the fee charged is not unconscionable, the lawyer clearly disclosed the billing practice at the outset of the relationship, and obtained client cosent.
What is encouraged in fee disputes?
The ABA encourages arbitration.
Is it okay to split fees with lawyers in your own firm?
Yes.
May you split fees with lawyers outside of your firm?
Only if the total fee is ethical and there is written disclosure and client consent. The ABA further requires the division to be in proportion to the work done by each attorney, unless each is jointly responsible for the action.
Joe gets a personal injury case, but it is based in LA, which he detests. He refers the case to Phil, who is based in LA and does all the work on the case and wins $15,000,000. Can Phil send Joe a German built Mercedes, Joe’s favorite car, as a thanks for the referral?
Under the ABA no, Phil did all the work so this would not be a proportional fee splitting.
Under CA, it is okay if the total fee isn’t unconscionable and the client consents.
Is fee splitting with non-lawyers allowed?
Generally no, except in:
1) death benefits paid to a deceased lawyer’s firm or heirs for his work,
2) fees passed on as salary to non-lawyer employees,
3) sharing of court-awarded legal fees with a non-profit organization that employed or recommended the lawyer
May a lawyer pay the usual charges of a qualified referral service?
Yes.
Are referral services allowed?
Yes if they are qualified.
Can a non-lawyer partner with a lawyer in providing legal services?
NO. Non-lawyers may not be partners, shareholders, officers, or control or direct your professional judgment.
