E N D
1. 2007
“Earning, Collecting & Keeping
Attorney’s Fees”
by
Daniel D. Horowitz, III
Abraham, Watkins, Nichols, Sorrels, Matthews & Friend
2. First things FirstTerms of the Contract More information the better
Scope of the engagement
Waiver of conflict
Hourly rate & billing increments
Permission to withdraw for nonpayment
Arbitration agreements
Non-refundable retainer
3. Waiver of Conflict WAIVER OF CONFLICT OF INTEREST
RULE 1.06
Rule 1.06 of State Bar Rules provides that a lawyer may not represent opposing parties to the same litigation except in certain circumstances. The standard fee agreement contract of this office provides that you understand and acknowledge that an attorney-client relationship does not commence until the initial fee requirements of said contract have been paid, i.e. “the retainer.” The initial consultation fee is separate from the retainer amount. If you decide not to hire the office of Divorce Lawyer and the opposing party makes an appointment and pays the initial fee requirement, you are being informed fully that any thing you say during the initial consultation, may and will be used against you and by signing below are fully informed of the nature and implications and possible adverse consequences and so consent to the subsequent representation pursuant to Rule 1.06(c)(2).
___________________________________ _________________________________
NAME DATE
___________________________________
WITNESS
4. Hourly Rate: How much is too much? Does it pass the smell test?
Time & labor required
Difficulty of questions/skill required
Fee customarily charged in locality for similar legal services
Amount involved
Time limitations imposed by Client
Nature & length of professional relationship with Client
Experience of lawyer performing the services
5. Billing Increments .1
.25
.50 (Is it still used?)
6. Permission to Withdraw Put paragraph in the contract regarding permission to withdraw if fees are not paid
Bold language in contract
Have client initial the paragraph
Does not relieve attorney’s obligation under Rule 1.15 or Court’s procedure
7. Arbitration Agreements Are they enforceable
Do you want it
Henry v. Gonzalez, 18 S.W.3d 684 (Tex. App.-San Antonio 2000), pet. dism'd by agr.
Noticeable, Sufficiently Conspicuous, and Prominently Displayed
Can’t limit liability of lawyer
8. Non-Refundable Retainers Subject to reasonableness standard
Texas ethics opinion 431
“A fee is not earned simply because it is designated as non-refundable”
“Not inherently unethical, but must be utilized with caution”
Preclusion of other employment; experience, reputation & ability of lawyer
Make very clear in the contract
Bill against the retainer
9. You Do the Work & Don’t Get Paid! Withdraw from case
Sue your client
Intervene in pending litigation
Arbitration/Mediation
HBA Fee Dispute Center
10. Motion to Withdraw Rule 1.15 of Professional Conduct
Subsequent to the employment of the undersigned counsel, and after considerable effort had been expended in preparing Respondent’s case, the undersigned attorney has determined that he will be unable to effectively represent Respondent due to the uncooperative attitude of Respondent in the preparation of his case. Further, good cause exists for withdrawal of DEWY CHEATEM as counsel, in that he is unable to effectively communicate with DEAD BEAT CLIENT in a manner consistent with good attorney-client relations and for failure to fulfill his contractual obligations (nonpayment of attorney’s fees).
11. Status of Case
A copy of this motion has been delivered to DEAD BEAT CLIENT, who has been notified in writing of his right to object to this motion. DEAD BEAT CLIENT has not consented to this motion. The last known address of DEAD BEAT CLIENT is1006 Heartbreak Hotel, Nowhereville, Texas 77520. Petitioner’s responses to Respondent’s First Set of Interrogatories to Petitioner, LYING CHEATING SPOUSE, Request for Disclosure, and Request for Production are due on February 24, 2006. There are no other pending settings or deadlines.
12. Notice to Client You are hereby notified that this Motion for Withdrawal of Counsel is set for hearing at the time and place stated below. You do not have to agree to this motion. If you wish to contest the withdrawal of DEWY CHEATEM as your attorney, you should appear at the hearing. If you do not oppose DEWY CHEATEM's withdrawal as your attorney, you may notify DEWY CHEATEM in writing of your consent to this motion.
13. Sue Your Client Breach of contract = attorney’s fees
Is it worth it? Counterclaim by client for malpractice, or excessive fees
Be prepared and have your own house in order
Is it collectible
Do you have the time
14. Arbitration/Mediation Same issues as suing your client.
Arbitration may not be any cheaper.
Again, can you collect?
15. HBA Fee Dispute Center Arbitration process and binding on both parties
Panel consists of two attorneys & one lay person
www.hba.org for more information
713-759-1133
16. Can you still receive referral fees?
17. October 9, 2003 – Texas Supreme Court Proposes TRCP 8a
June 4, 2004 -- Final report is presented to the SBOT Board, which votes and asks the Supreme Court to hold a referendum
18. Proposed Rule 8a included a cap on the amount of referral fees
Required public disclosure of all fee arrangements by way of court filings
Required a court hearing whenever a party questions the validity of a fee arrangement
19. Rule 8a capped referral fees at 15% of the total fee or $50,000, whichever was LESS
20. Many individual attorneys and the SBOT objected and argued that the changes as proposed would be unconscionable.
21. Note: Only Florida has a cap regarding referral fees similar to what was proposed in Texas in 2003.
22. Public disclosures under Rule 8a required attorneys to file referral fee distributions and or agreements with the court, thus creating a public record
23. Note: Texas would have been the ONLY state with this kind of rule.
24. There was an unresolved conflict inherent with the proposed TRCP Rule 8a between TRCP & TDRPC
Specifically, Rule 8a would not have applied to Federal Court cases
Would not have applied to cases settled without suit being filed
Would not have clearly given jurisdiction of rule violations to the SBOT
25. QUESTIONS ADDRESSED BY SUPREME COURT
Will restrictions on Referral Fees impair what has been viewed as their beneficial purpose of obtaining the best representation for clients?
Do Referral Fees harm clients?
Do Referral Fees adversely affect the Profession?
Should Referral Fees be capped by rule?
Should Referral Fees be disclosed to the client & public?
26. Mar. 1, 2005
New referral fee rules become effective.
27. Modified Rule 1.04
Eliminates the “Pure” forwarding fee for attorneys who do not work on a case but refer it to another attorney
Requires written consent by client disclosing division of fees arrangement
Lawyer Referral Programs are exempt
TDRPC Rule 1.04:
28. YOU HAVE 2 OPTIONS Proportion of Services Performed
Joint Responsibility
29. Each lawyer performed substantial legal services on the matter.
Each lawyer performed services beyond initially acquiring and signing up the client.
There must be a reasonable correlation between services performed and the split of the fee.
Proportion of Services Performed
30. Joint Responsibility Joint responsibility involves ethical, and possibly financial responsibility for the representation.
The referring attorney must make sure the lawyer handling the matter is competent to handle it.
31. Require that an arrangement for division of fees be acknowledged in writing by the client when he or she enters into an agreement for representation.
The agreement should reflect how fees and representation will be divided among the attorneys.
Must disclose whether fees are being divided based on joint responsibility or proportion of services rendered.
Client Consent
32. Sample POA Language: Joint Responsibility Client understands and is advised that this case has been referred to Abraham, Watkins, Nichols, Sorrels, Matthews & Friend and specifically consents to the association of Abraham, Watkins, Nichols, Sorrels, Matthews & Friend and ___________________________ (“Referring Attorney”) in the handling of this case. Client agrees, consents and understands that the law firm of Abraham, Watkins,
33. Continued… Nichols, Sorrels, Matthews & Friend and __________________ (“Referring Attorney”) are assuming joint responsibility for the representation of Client in the above described incident. At the conclusion of the case, if a recovery is made on behalf of Client, of the total fee paid, (___%) will be paid to Associated Counsel and (___%) will be paid to Referring Attorney. The referral fee to be paid will not increase the total fee owed by Client.
34. Continued… Client’s signature at the end of this Agreement indicates his/her understanding and consent to the division of fees and the referral fee which will be paid.
35. Fee for Services Performed Client understands and is advised that this case has been referred to Abraham, Watkins, Nichols, Sorrels, Matthews & Friend and specifically consents to the association of Abraham, Watkins, Nichols, Sorrels, Matthews & Friend and ___________________________ (“Referring Attorney”) in the handling of this case. Client agrees, consents and understands that the law firm of Abraham, Watkins,
36. Continued… Nichols, Sorrels, Matthews & Friend and __________________ (“Referring Attorney”) are assuming joint responsibility for the case and attorneys fees will be divided based on a proportion of the work services performed by them. The division of fees will correlate to the services performed by the Referring Attorney and Associated Counsel.
37. Continued… Although it is unknown precisely the proportion of the work to be performed by the attorneys at this time, it is anticipated that the services performed by the Referring Attorney and Associated Counsel will be proportioned (___%) and (___%) between Referring Attorney and Associated Counsel.
38. Continued… Accordingly, it is anticipated that the attorneys fees will be divided in the same proportion. In any event, the Referring Attorney will receive no more than 50% of the total attorneys fees recovered under this agreement. The referral fee to be paid will not increase the total fee owed by Client. Client’s signature at the end of this Agreement indicates his/her understanding and consent to the division of fees and the referral fee which will be paid.
39. Now You Have It –Make Sure You Keep It! Fee forfeiture
Burrow v. Arce, 997 S.W. 2d 229 (Tex. 1999)
40. Fee Forfeiture Equitable remedy in breach of fiduciary duty case
Plaintiff/former client not required to prove actual damages
The Court determines if and how much of the fee will be forfeited
41. Factors Court Considers Gravity & timing of violation
Willfulness of violation
Effect of violation on the value of lawyer’s work for the client
Adequacy of other remedies
Public interest in maintaining the integrity of attorney-client relationship
42. THE END
Daniel D. Horowitz, III
Abraham, Watkins, Nichols, Sorrels, Matthews & Friend
800 Commerce Street
Houston, Texas 77002
713-222-7211
dhorowitz@abrahamwatkins.com