Legal Fees

Question 1

1.5

Answer 1

Fees

Question 2

7.1

Answer 2

Communications Concerning a Lawyer’s Services

Question 3

1.8

Answer 3

Conflicts of Interest: Current Clients: Specific Rules

Question 4

1.15

Answer 4

Safekeeping Property

Question 5

What is the ultimate conflict with Attorney’s and Clients over legal fees?

Answer 5

Clients want to pay little and Attorneys want to make a lot.

Question 6

Type of Fee Arrangements

Answer 6

1. Contingency fees
2. Flat Fees
3. Retainers
4. Hourly Fees

Question 7

What are contingency fees? What rule(s) governs?

Answer 7

It’s a fee arrangement where the attorney only gets paid if the client wins a case. Usually, a contingency fee is set up to be a percentage of the total winnings.
Rules 1.5(a) & 1.5(c)

Question 8

What is a flat fee?

Answer 8

A flat fee is where a lawyer charges only X amount for providing a certain service (i.e. drafting a will for $500)

Question 9

What is a Retainer?

Answer 9

A retainer is money paid up front to the attorney that must be kept in a client account where the attorney may draw money from once it has been earned.

Question 10

What is an hourly fee?

Answer 10

An hourly fee is where a lawyer charges a certain amount of money per hour and bills for that amount times the number of hours spent working on a case.

Question 11

What rule generally governs fees?

Answer 11

1.5

Question 12

Factors to determine fee reasonableness under 1.5(a)

Answer 12

1. time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
2. likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
3. the fee customarily charged in the locality for similar legal services;
4. the amount involved and the results obtained;
5. time limitations imposed by the client or by the circumstances;
6. nature and length of the professional relationship with the client;
7. the experience, reputation, and ability of the lawyer or lawyers performing the services; and
8. whether the fee is fixed or contingent

Question 13

When must fees be discussed? What rule?

Answer 13

1.5(b) fees only need to be disclosed within a reasonable time after commencing the representation. Lawyers must communicate with clients any changes in the basis of fee arrangement.

Question 14

Can you adjust fees based on a clients ability to pay?

Answer 14

You can lower rates for indigent clients. You can also increase rates for clients with the ability to pay more (see cmt. 5) but the fees must still be reasonable and you cannot exploit clients.

Question 15

Are the factors in 1.5(a) exhaustive?

Answer 15

No. Cmt. 1 says courts can look to other factors.

Question 16

Can lawyers bill for travel time?

Answer 16

Yes

Question 17

Can lawyers bill multiple clients for hours spent simultaneously working? (i.e. bill for travel time for client X, and bill for work done during the same time for client Y)

Answer 17

No. Lawyers may not double bill for hours.

Question 18

Can you charge overhead costs? (i.e. make money on things like printing)

Answer 18

No. Lawyers can only charge the amount they paid to do something for clients.

Question 19

When are you not permitted to use contingency fees as basis of payment? What rule?

Answer 19

1. Domestic relations (divorce, custody, etc)
2. Criminal cases

1.5(c)

Question 20

What percentage may be reasonable for purposes of contingency fees?

Answer 20

30-40%

Question 21

What is required to set up a contingency fee arrangement between attorney and client? What rule?

Answer 21

1.5(c) requires the agreement be in writing and signed by the client. It must state what expenses the client is responsible for and whether the fees are to be calculated before or after those expenses are deducted. Lawyer must send the client a statement listing the actual expenses.

Question 22

What rule governs the divisions of fees among lawyers?

Answer 22

1.5(e)

Question 23

What is required for lawyers to divide fees with other lawyers?

Answer 23

1. Division must be proportionate to the services performed or the lawyers must assume joint responsibility for the representation
2. Client must agree to arrangement and it must be confirmed in writing
3. Total fee must be reasonable under 1.5(a)

Question 24

Can lawyers provide financial assistance to clients? What rule?

Answer 24

Generally no, but exceptions apply. Under 1.8(e) lawyers cannot provide financial assistance to a client unless a lawyer is advancing court cost and expenses of litigation (where repayment may be contingent on outcome) OR a lawyer is representing an indigent client and then may only be permitted to pay court costs and expenses of litigation on behalf of the client.

Question 25

Why can lawyers not otherwise provide financial assistance to a client?

Answer 25

We don’t want clients pursuing frivolous claims in order to continue receiving financial assistance. Cmt. 10

Question 26

When can a lawyer get a lien against a client’s property? What rule?

Answer 26

1.8(i)(1) A lawyer can acquire a lien authorized by law to secure fees or expenses. Lien must be reasonable are subject to 1.8(a)

Question 27

Can you agree to arbitrate fees?

Answer 27

yes

Question 28

How many bank accounts should a lawyer have for the course of business?

Answer 28

2. 1 for client funds and 1 for firm funds