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Lawyer Agreement

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Lawyer Agreement document sample

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									    And Now for Something
    Completely Different…
Understanding the contractual, financial aspects
 of the attorney client relationship, including the
        requirements for fee agreements,
“reasonableness” requirements for both fee and
            expenses, and fee splitting.




                                                      2
    Varieties of Fee Agreements
• Hourly:
• Flat:
    – What’s the client benefit to this form?
• Contingent:
    – Why do we allow these?
•   Reduced Hourly with Kicker:
•   Reverse Contingent Fee:
•   “Value Billing” (I love this one)
•   __________
•   __________
                                                3
       Varieties of Fee Disputes
• Grievances
• Suits for Breach of Fiduciary Duty, Where Client
  Alleges Overcharging
• Suits by Lawyer for Unpaid Fees or Dispute
  Over Fee Calculation
• Disputes Where a Lawyer is Entitled to Fees as
  a Result of Winning a Lawsuit (“Fee Shifting”)
  –   Patent Suits
  –   Frivolous claims (sometimes)
  –   Contract Actions
  –   Certain Statutory Claims
                                                     4
• Communicate the fee
• Fee must be reasonable
  – “Double Billing” not allowed
• Expenses
  –   Must be reasonable
  –   No financial assistance to clients
  –   Assignments of Proceeds
  –   Limitations on witness fees
• Contingent fees
  – Writing required
       • How calculated
       • Which expenses/what circumstances
  – Some banned
  – Others limited
  – Settlement statement
• Divisions of fees among lawyers not in same firm   5
          Communicate Fee
(b) The… basis or rate of the fee and expenses
  for which the client will be responsible shall
  be communicated to the client, preferably in
  writing, before or within a reasonable time
  after commencing the representation, except
  when the lawyer will charge a regularly
  represented client on the same basis or rate.
  Any changes in the basis or rate of the fee or
  expenses shall also be communicated to the
  client.
(c) … A contingent fee agreement shall be in a
  writing signed by the client and…
                                               6
        Rule 1.5 (Reasonableness)
(a) A lawyer shall not make an agreement for, charge, or
   collect an unreasonable fee or an unreasonable amount for
   expenses. The factors to be considered in determining the
   reasonableness of a fee include the following:
   (1) the time and labor required, the novelty and difficulty of the
      questions involved, and the skill requisite to perform the legal
      service properly;
   (2) the 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) the time limitations imposed by the client or by the circumstances;
   (6) the 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.                            7
                     Reasonable?
• Are the factors in 1.5(a)(1)-(8) exclusive?
• Can you:
   – Bill the two hours while you’re flying on a plane to take a
     deposition for Client A and bill those two hours for Client B, since
     on the flight you read over some cases for Client B?
       • What if there was nothing you could have done on the flight for
         Client A? Same result?
   – Bill two clients two hours each since you had to go to the court
     house and wait two hours before you could stand up and argue a
     motion?
   – Bill Client A 20 hours for writing a motion for summary judgment,
     and then bill Client B 20 hours for writing basically the same
     motion, when it only took you 10 hours to prepare Client B’s
     motion because you were able to re-use much of the research
     and writing you had done for Client A?


                                                                           8
   Reasonableness: Expenses
• Can you charge 50 cents/page for copies?
  – If “maybe” what does it depend on?
• Can you charge a “mark up” on third party
  expenses (shipping; photocopying; etc.) to
  cover for your administrative costs in
  billing the client, paying the money on its
  behalf, and so on?
  – If “maybe,” what does it depend on?

                                                9
            1.5 (Contingent Fees)
(c) A fee may be contingent on the outcome of the matter for
   which the service is rendered, except in a matter in which a
   contingent fee is prohibited …. A contingent fee agreement
   shall be in a writing signed by the client and shall state the
   method by which the fee is to be determined, including the
   percentage or percentages that shall accrue to the lawyer
   in the event of settlement, trial or appeal; litigation and
   other expenses to be deducted from the recovery; and
   whether such expenses are to be deducted before or after
   the contingent fee is calculated. The agreement must
   clearly notify the client of any expenses for which the client
   will be liable whether or not the client is the prevailing
   party. Upon conclusion of a contingent fee matter, the
   lawyer shall provide the client with a written statement
   stating the outcome of the matter and, if there is a
   recovery, showing the remittance to the client and the
   method of its determination.
                                                            10
    Reasonable Contingent Fees?
• Is this reverse contingency fee ethical: “You agree to
  pay 33% of the difference between what plaintiffs
  seeks in the complaint and what you pay in judgment
  or settlement.”
• What’s the Model Rules say about whether the
  reasonableness rule applies to contingent fees?
• What about the “clear cut winner” case? Can it be
  reasonable to take 33% for what you “know” will be a
  simple case?
  – What’s the Restatement say?

                                                     11
1.5(d): Banned Contingent Fees
(d) A lawyer shall not enter into an arrangement
  for, charge, or collect:
  (1) any fee in a domestic relations matter, the
    payment or amount of which is contingent upon
    the securing of a divorce or upon the amount of
    alimony or support, or property settlement in lieu
    thereof; or
  (2) a contingent fee for representing a defendant in
    a criminal case.

Why these two categories?

                                                     12
               Witness Fees
• May an expert witness be paid a contingency
  fee?
• May a fact witness be paid a contingency fee?
• May a fact witness be paid for his time?




                                             13
 Protection Letters: 1.15(d)&(e)
• Suppose in a case where you have a 40%
  contingency fee, the client had assigned
  some portion of any proceeds to a treating
  physician in lieu of paying her at during
  treatments.
• When the case settles you get a check for
  $10,000, $1,000 of which you know is
  assigned to that doctor, but client says
  “don’t pay the jerk.”
• What do you do?
                                           14
                     1.5(e) (Fee Splitting)
(e)   A division of a fee between lawyers who are not in the same firm may
      be made only if:
       (1) the division is in proportion to the services performed by each
          lawyer or each lawyer assumes joint responsibility for the
          representation;
       (2) the client agrees to the arrangement, including the share each
          lawyer will receive, and the agreement is confirmed in writing; and
       (3) the total fee is reasonable.



Comment 7: “A division of fee is a single billing to a client covering the fee of
  two or more lawyers who are not in the same firm. A division of fee facilitates
  association of more than one lawyer in a matter in which neither alone could
  serve the client as well, and most often is used when the fee is contingent
  and the division is between a referring lawyer and a trial specialist.
  Paragraph (e) permits the lawyers to divide a fee either on the basis of the
  proportion of services they render or if each lawyer assumes responsibility
  for the representation as a whole. In addition, the client must agree to the
  arrangement, including the share that each lawyer is to receive, and the
  agreement must be confirmed in writing. … Joint responsibility for the
  representation entails financial and ethical responsibility for the         15
  representation as if the lawyers were associated in a partnership...
1.8(e) Financial Assistance to Clients
(e) A lawyer shall not provide financial
  assistance to a client in connection with
  pending or contemplated litigation, except
  that:
  (1) a lawyer may advance court costs and expenses
    of litigation, the repayment of which may be
    contingent on the outcome of the matter; and
  (2) a lawyer representing an indigent client may pay
    court costs and expenses of litigation on behalf of
    the client.

                                                     16
           Problem 3-1 (219)
• Carnes’ leg is injured while working at JMC and
  then the doctor is negligent, resulting in
  amputation. Carnes hires Lopez to obtain
  workers’ comp payments. Lopez doesn’t do
  medmal, but recommends she hire Atlee. Atlee
  tells Lopez: 45%, 10% of that goes to you the
  referring attorney, with client paying all
  expenses. Carnes tells Lopez and says she’ll
  stay involved as a consultant. Carnes signs K
  with Atlee saying 45%, all expenses are Carnes’.
                                                17
             Problem 3-1
• Atlee settles the case for $100k. Carnes
  accepts. Carnes gets a check for $40k.
  When she asks, she’s told 100-45%-$10k
  expert witness fee -5K expenses = $40k.
  Carnes is told “other expenses” include
  copying, travel, overhead.
• Carnes comes to you for advice about
  whether this was right.

                                             18
          What was wrong?
• What factors determine whether 45% was
  ethical?
• Anything wrong about Carnes’ proposing only a
  contingent fee approach?
• Was Atlee required to have a fee that varied
  upward (25% if soon settle, then 33%, and so
  on, e.g.)?
• If the agreement said only “Carnes is
  responsible for all expenses,” is that okay?
  (Hint: it’s not.)


                                                  19
      What else was wrong?
• Can an expert witness be paid a
  contingent fee? (Is that what this was?)
• What about the charges for expenses?
• Was anything more than mailing a check
  required to settle up?




                                             20
Division between Atlee & Lopez
• Was the division between Atlee and Lopez
  proper?

• Suppose you conclude that Carnes was
  treated improperly. What do you say are
  her options? What kind of money might
  the attorneys have a right to if the
  agreement is unenforceable?
                                            21

								
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