MRPC 1.5: FEES Flashcards
Name at least three (of eight) factors to determine if a lawyer’s fees are reasonable
1) Time and labor required, novelty and difficulty of the questions involved, skills required to perform legal services properly;
2) Likelihood (if apparent to client) that the acceptance of the particular employment will preclude other employment by the lawyer;
3) Fee customarily charged in the locality for similar legal services;
4) Amount involved and results obtained;
5) Limitations imposed by the client or circumstances;
6) Nature and length of the professional relationship with client;
7) Experience, reputation, and ability of the lawyer(s) performing the service;
8) Whether the fee is fixed or contingent
Are the eight factors listed in 1.5(a) to determine reasonableness of fees exclusive?
No. 1.5(a) [1] not exclusive.
Nor will each factor be relevant in each instance.
Lawyers may seek reimbursement for the costs of services performed in-house (copying, etc.) or for other expenses incurred in-house (telephone calls) either by charging a reasonable amount to which the client has agreed in advance or by charging an amount that reasonably reflects the costs incurred by the lawyer.
In determining fees, does it matter if it’s a new client/lawyer relationship (vs. longstanding)?
Yes! 1.5 [2]
Existing client-lawyer relationships have an existing understanding concerning fees and expenses. New relationships require more communication and expectation management.
It’s very common to provide a copy of the lawyer’s rates, services provided, fee structure, or an estimated total. And how much the client will be on the hook to pay.
Get this in writing so there’s no confusion at the end of the project.
For contingency fees, does a lawyer need to analyze whether his fees are reasonable?
Yes! 1.5(b) [3]
Contingency fees are held to the same standards as 1.5(a) to determine reasonableness. Applicable laws may also determine what’s reasonable for contingency.
Can a lawyer require advance payment of fee?
1.5 [4]
Yes, but the lawyer must return any unearned portion –> See Rule 1.16(d)
Can a lawyer accept property in payment for services?
Rule 1.5[4]
Yes, a lawyer may accept property in payment for service (ex: ownership interest in an enterprise), providing this does not involve acquisition of a proprietary interest in the cause of action or subject matter of the litigation contrary to Rule 1.8.
However, a fee paid in property instead of money may be subject to the requirements of Rule 1.8(a) because such fees often have the essential qualities of a business transaction with the client.
Can a lawyer enter into an agreement with a client where services are to be provided only up to a stated amount when it is foreseeable that more extensive services probably will be required?
Rule 1.5 [5]
Unless the situation was adequately explained to the client, this would not be allowed. An agreement may not be made whose terms might induce the lawyer improperly to curtain services for the client or perform them in a way contrary to the client’s interest.
HOWEVER, it is proper to define the extent of services in light of the client’s ability to pay.
Are lawyers prohibited from charging contingency fees in domestic relations matters where payment is contingent upon securing a divorce or upon the amount of alimony or support or property settlement to be obtained?
YES. 1.5(d) [6]
The legal profession is afraid of the appearance of stirring up litigation – we don’t want “lawyers are breaking up homes” reputation.
This does not preclude a contract for a contingent fee for legal representation in connection with the recovery of post-judgment balances due under support, alimony or other financial orders because such contracts do not implicate the same policy concerns.
Why can’t lawyers charge contingency fees for criminal cases?
Generally, no monetary settlements
We want to increase access to legal services but when a person’s life and liberty is at stake, we don’t want a conflict of interest like that introduced by contingency fee arrangements
What does Rule 1.5(e) say about lawyers not at the same firm splitting fees?
(1) Fee must be given in the proportion for the work that you do
(2) Client must consent to the arrangement and shares that each lawyer will get, in writing; and
(3) Total fee is reasonable
Does Rule 1.5(e) prohibit or regulate division of fees to be received in the future for work done when lawyers were previously associated in a law firm?
No. Rule 1.5 [8]
How do lawyers handle disputes over fees?
1.5 [9] If a procedure has been established for resolution of fee disputes, such as an arbitration or mediation procedure established by the bar, the lawyer must comply with the procedure when it is mandatory, and, even when it is voluntary, the lawyer should conscientiously consider submitting to it. Law may prescribe a procedure for determining a lawyer's fee, for example, in representation of an executor or administrator, a class or a person entitled to a reasonable fee as part of the measure of damages.
The lawyer entitled to such a fee and a lawyer representing another party concerned with the fee should comply with the prescribed procedure.
