Fees & Billing Flashcards
Types of Fee Structures Allowed
- Hourly Billing (usually D)
- Contingent Fees (usually P)
- Flat Fees
- Equity Interest
Fee Rules under R.1.5
- Can’t be unreasonable R.1.5(a)
- preferably in writing R.1.5(b)
- Contingency fee MUST be in writing (R1.5(c))
Can an attorney bill 2 clients hourly fees for worked performed at the same time?
No
Are surcharges permissible?
No, firm cannot charge more than they pay for an outside attorney.
Can an attorney who revises a doc that was prepared for an earlier client for a current, bill the current client for more than revision time?
No
What to do when 3 separate clients ask lawyer to review the same proposed legislation?
Cannot bill each for the hour, divide the hours by the # of clients
Can the contingency fee be larger than the comparable hourly fee?
Yes, as long as it’s still reasonable
What are the requirements of contingency fees?
They must be in writing (R.1.5(c))
What can’t be a contingency fee? R.1.5(d)
(1) any contingency fee in a domestic relations matter (contingent upon securing divorce, alimony, support, settlement)
(2) a contingency fee for representing a D in a criminal case
NOTE:
this rule does NOT preclude a contingency fee for the recovery of post-judgment balances due under support, alimony, or other financial orders because those do not implicate the same policy concerns.
R.1.8(i) - Conflict of Interest/Current Client Specific Rules
a lawyer cannot acquire a proprietary interest in the cause of action EXCEPT that a lawyer MAY:
(1) acquire a lien to secure lawyer’s fee/expenses AND
(2) contract for a reasonable contingent fee in a civil case
Example of an unreasonable contingency fee
When no actual work is done; need to justify the contingency fee
2 most common ways of getting paid
(1) hourly rate
(2) contingency fees
Can a lawyer enter into and agreement for property interest adverse to client?
Under R.1.8(a) NO, unless:
(a) the terms are fair, reasonable, fully disclosed, and written in a manner reasonably understood by client
(b) the client is advised in writing to seek independent counsel
(c) client gives informed consent in signed and in writing about the terms, lawyer’s role, and whether lawyer is representing the client in the transaction
Can a lawyer accept property as payment?
Yes under R.1.5 Comment 4, as long as it does not involve property interest in the cause of action involved in litigation
Can a lawyer increase their fee?
Yes, subject to Restatement 18 Comment E:
To be justified as reasonable:
(a) the lawyer must show that the client was adequately aware of the effects and any material disadvantages (the more experienced the client, the less the lawyer needs to inform; helps if client initiated the modification
(b) the lawyer must show that the client was not pressured to avoid problems of changing lawyers, missing deadlines, losing significant litigation opportunity, or because new lawyer would have to repeat work
