Written Fee Arrangements
It is not uncommon for the busy practitioner to forget the necessity of a written fee arrangement when engaged for a new representation. This is especially so in instances where a client may require immediate assistance with a legal matter, for example an injunctive action, custody, or a criminal matter. However, the Rules of Professional Conduct which govern attorney ethics requires that upon initiation of the representation of a client for the first time, the attorney must communicate, in writing, the basis or rate of the fee for the representation. Although the rule requires that the fee information be communicated before or within a reasonable time after commencing the representation, all too often, the attorney who has taken a representation under exigent circumstances will fail to follow up on this requirement. However, such failures do not go unnoticed by the Office of Disciplinary Counsel. It is not uncommon in instances where there has been an allegation of, for instance a failure to communicate with a client, that disciplinary counsel will also charge a violation for failure to provide a written fee agreement or arrangement to a client prior to or even during the course of the representation.
It is also important to note that a fee arrangement will be required where the fee is contingent upon the outcome of a matter (other than a domestic relations or criminal case in which contingent fees are prohibited). This arrangement must be in writing and set forth the method by which the fee is to be determined, including the percentage or percentages to be paid to the attorney in the event of settlement, trial or appeal, litigation and the deduction of expenses from the recovery and whether such deductions will be taken before or after the fee is calculated. Where a contingent fee is utilized by an attorney and the matter has concluded, a written statement detailing the distribution of the funds received must be provided to the client.
A written fee agreement is required at the inception of a new representation or when the attorney will accept a contingent fee. The written arrangement provides an excellent opportunity to set the tone and parameters of the representation. When an attorney consistently uses a written fee arrangement and the document is sufficiently detailed, it should help avoid surprises in billing because the client will know the terms of payment and that, for example, the time spent answering telephone calls will be billed to the client. In the case of a contingent fee, clients will understand the details of what to expect at the end of the representation including how funds will be distributed. Although required by the Rules of Professional Conduct, the fee agreement/arrangement also serves a useful tool for practitioners.
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Tags: Anthony T. Verwey, attorney ethics, client, criminal, custody, engagement, ethics, fee, fee arrangement, injunctive action, legal ethics, Office of Disciplinary Counsel, Rules of Professional Conduct, settlement, trial
