5 MC Flashcards
(8 cards)
A client retained an attorney to represent him in two cases: a criminal case and a divorce case. The attorney required that the client pay a retainer fee for the family law case, which billed at the attorney’s hourly rate. The attorney then arranged for the client to pay him based on a contingency fee for the criminal case. The attorney and the client both signed the combined contract, which detailed each fee arrangement for each case, and the attorney’s representation began. Are the attorney’s actions proper?
no, as attorneys cannot charge a contingent fee for representing a defendant in a criminal case.
A court orders that a certain client should receive child support from her ex-husband. The client’s ex-husband stopped making child support payments twelve months ago. The client hires an attorney to handle the enforcement of child support against the client’s ex-husband. The attorney agrees to take the case on a contingency basis because the client cannot afford to hire an attorney since she has not been receiving child support from her ex-husband. The client also asks the attorney to pay her court costs, as she cannot afford those either. The attorney prepares a contract that states the attorney will only be paid for his representation if the client prevails on the enforcement motion, but that court costs will be reimbursed by the client within thirty days of the finalization of the case regardless of whether the client prevails. Is the attorney’s conduct proper?
Yes, because attorneys may accept cases on a contingency basis in domestic relations issues if the case is merely to enforce a prior order, and attorneys may pay for court costs for clients.
An attorney agreed to represent a client as plaintiff in a patent infringement lawsuit. The attorney was part of a partnership that specialized in intellectual property law. The attorney prepared, and the client signed, a written fee agreement that specified the attorney would receive a tiered contingent fee in the case: 25 percent if the case settled before trial, 30 percent if they went to trial and won, and 35 percent if the case went up on appeal and they prevailed in the appellate stage. In addition, the agreement specified that the contingent fee would come from total award before court costs and other expenses, and that the client would be responsible for court costs and expenses out of his own pocket, either along the way as expenses arose during the proceedings, or from the client’s share of the award after the attorney received his contingent fee. The attorney never revealed that his partnership agreement required him to share his part of the fees with three other partners in the firm, or that his fees would go toward a general firm operating budget from which the partnership paid the salaries of non-lawyer staff, such as paralegals and secretaries. The attorney obtained a favorable settlement before trial. He telephoned the client with the good news and explained that he would deduct his 25 percent contingent fee, as they had agreed, and would send the client the remainder of the settlement funds. At that time, there were no outstanding unpaid expenses or court costs. The client was glad to hear the news, and the attorney promptly sent the client a check for 75 percent of the total amount received from the other party. The attorney and the client had no other contact except to exchange holiday greeting cards. Were the attorney’s actions improper?
Yes, because the attorney failed to provide the client with a written statement stating the outcome of the matter and showing the remittance to the client and the method of its determination.
An attorney has represented a client on various small matters in the past. The client now needs representation for a more substantial matter involving a business transaction. During a phone call, the attorney agrees to represent the client at a slightly higher hourly rate, given the complexity of the matter, and when they meet to discuss the transaction in more detail, the attorney double-checks with the client about the fee arrangement verbally, explaining it carefully and answering any questions the client may have. The attorney and the client never formalize the fee arrangement in writing, but the attorney does send printed bills to the client periodically. Eventually, the client starts to feel that the representation is costing too much, and objects to one of the bills. Was it permissible for the attorney to have an oral agreement over hourly fees, without putting the fee agreement into writing?
Yes, because even though it is always preferable to have fee agreements in writing, it is not required in this type of case. The purpose of this question is to remind students that the absolute requirement for written fee agreements applies in only two scenarios—contingent fees and fees shared between lawyers from different firms that worked on the case. There is a strong preference for written fee agreements in all other situations (and it is certainly a prudent habit in legal practice), but it is not an absolute requirement.
An attorney agrees to represent a client in a divorce proceeding against her husband. The client is particularly concerned about obtaining her fair share of the marital property or assets—as much as possible, in fact—as well as a suitable level of child support for their children. The client agrees to pay the attorney his usual flat fee for divorce cases, $5,000, but also offers to pay him 10 percent of whatever he wins in terms of payments and distribution of assets, on top of his usual fee. After a protracted, acrimonious divorce proceeding, the attorney obtains a settlement worth approximately $2 million for the client. Is the attorney subject to discipline in this scenario?
Yes, because the attorney entered into an arrangement for a fee in a domestic relations matter, the amount of which was contingent upon the amount of alimony, support, or property settlement.
A client retains an attorney to handle a criminal matter. The client delivers a retainer check to the attorney on Friday afternoon. The retainer check will only cover the work the attorney anticipates he will begin and complete the following Monday. Because the following Monday is a banking holiday, if the attorney deposits the retainer check into his client trust account on Friday afternoon, he will not have access to the funds until Tuesday. The attorney deposits the retainer check into his business checking account and pays himself on Friday before the firm closes with those funds. Is the attorney subject to discipline?
Yes, attorneys shall deposit amounts paid in advance into a client trust account and the attorney shall not withdraw the funds until fees are earned or expenses are incurred. one narrow exception (covering the bank fees on a trust account).
RULE 1.5: Fees
(a) Lawyer shall not make agreement for, charge, or collect unreasonable fee or amount for expenses
* Reasonable Fee–Factors:
(1) time & labor required, novelty & difficulty of questions involved, & skill requisite to perform legal service
properly;
(2) if apparent to C, likelihood that acceptance of particular employment will preclude other employment by L;
(3) local customary fee for similar legal services;
(4) amount involved & results obtained;
(5) time limitations imposed by C or circumstances;
(6) nature & length of professional relationship with C;
(7) experience, reputation, & ability of L(s) performing services;
AND
(8) whether fixed or contingent fee
(b) Scope of representation & basis/rate of fee & expenses for which client will be responsible shall:
* be communicated to client, preferably in writing
* before, OR within reasonable time after commencing representation, or when changed
* Except when lawyer is charging regularly represented client on the same basis/rate
Contingent fee agreement shall
* be in writing
* signed by the client &
* state method of fee determination including
* percentage(s) of accrual if settlement, trial or appeal
* litigation & other expenses to be deducted from recovery AND
* whether such expenses are deducted before or after contingent fee is calculated.
* The agreement MUST clearly notify client of any expenses for which the client will be liable whether or not client is the prevailing party.
* Upon conclusion of contingent fee matter, lawyer shall provide client with a written statement stating outcome of the matter AND, if
there is a recovery, showing the remittance to
(d) 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 securing divorce or the amount of alimony or support, or property settlement in lieu thereof; (but does not preclude a contingent fee for post-judgment balances due)
OR
(2) Contingent fee for representing a defendant in a criminal case.
(e) Division of fee between lawyers not in the same firm may be made only if:
(1) Division of fee in proportion to services performed by each lawyer OR, each lawyer assumes joint responsibility for the representation;
(2) Client agrees to arrangement in writing, including share each lawyer will receive;
AND
3) total fee is reasonable
Can accept property for services
Fee agreements may not induce a lawyer to improperly limit services for a client
RULE 1.15: Safekeeping Property
Funds & other property shall be identified, kept in a separate account, and appropriately safeguarded
Lawyer shall keep and preserve complete records of account funds and other property 5 years after representation
(c) Legal Fees & Expenses Paid in Advance:
Lawyer shall
* Deposit into a client trust account legal fees & expenses paid in advance,
* to be withdrawn by lawyer only as fees earned or expenses incurred
(d) Receiving Funds or Property for C or 3rd Party: L shall
* Promptly notify client or 3rd Party
* Promptly deliver any funds or other property that client or 3rd Party are entitled to receive,
* Except as stated in this rule or otherwise permitted by law or agreement with client
AND
* Promptly render full accounting regarding such property upon request by client or 3rd Party
(e) Disputed Property in lawyer’s Possession:
* Property in dispute shall be kept separate by lawyer until dispute resolved
* Lawyer shall distribute all portions of property interests not in dispute
L may file action for court to resolve dispute
All property of clients and prospective clients must be kept separate from lawyer’s business and personal property
Money must be kept in client trust accounts
Can only comingle finances when paying bank service charges on that account
Account and property records must be kept in accordance
