Do you question an invoice from your lawyer? If so, the first thing you should do is to read your written attorney-client agreement. Often, you will find the answer to your question. If not, a prompt email or phone call for an explanation is the next step—perhaps there is a mistake. If brought to their attention promptly, attorneys are usually willing to discuss fees and charges and resolve issues favorably for the client.
If the issue remains unresolved, you might want to institute mandatory fee arbitration. During arbitration, or if your lawyer sues you for breach of contract, the following statutes and rules apply in non-contingency fee cases when the client is not a corporation. [The same rules apply for corporate clients, except there is no requirement that the fee agreement comply with Section 6148, below.]
Business & Professions Code section 6148 provides that when it is “reasonably foreseeable that total expense to a client, including attorney fees, will exceed one thousand dollars ($1,000), the contract for services in the case shall be in writing.”
Section 6148 further provides that the written agreement shall contain: (1) the basis of compensation including hourly rates, statutory fees or flat fees, and other standard rates, fees, and charges; (2) the general nature of the legal services; (3) the respective responsibilities of the attorney and the client.
These requirements do not apply to fee agreements “implied by the fact that the attorney’s services are of the same general kind as previously rendered to and paid for by the client.” Or, “[s]ervices rendered in an emergency to avoid foreseeable prejudice to the rights or interests of the client or where a writing is otherwise impractical.” Otherwise, the failure to comply with any of these provisions renders the agreement voidable at the client’s option. Upon the agreement being voided, the attorney is entitled to collect only a reasonable fee.
What is the standard applied when a client breaches a written agreement that fully complies with section 6148? California State Bar Arbitration Advisory 1993-02 is instructive.
The first step is to determine that the fee is not unconscionable under Rules of Professional Conduct, Rule 1.5. Unconscionability—not unreasonableness—is the standard because the fee agreement fully complies with section 6148; the attorney is not limited to a reasonable fee.
The next step is to review the attorney’s performance under the terms of the agreement. In this step, a “reasonableness” standard is to be applied, including an assessment of whether the attorney used reasonable care, skill, and diligence in performing the duties required by the agreement, that unnecessary, duplicative, or unproductive time is not charged, and that the attorney has not performed services required as a result of the attorney’s negligence or lack of ordinary skill or diligence.
Therefore, it is essential when disputing an attorney’s invoice based upon a valid hourly fee agreement that you identify each item you allege is non-chargeable. You should also identify the reason: (1) it represents negligent services (your attorney failed to use reasonable care, skill, and diligence); or 2) the time spent was unproductive or unnecessary. Generally, unless you have instituted mandatory fee arbitration, you will need expert witness testimony to prove these facts.
The standard articulated in Advisory 1993-02 balances the competing interests that arise when a client breaches a fee agreement by refusing to pay an agreed-upon fee. The standard is consistent with section 6148’s recognition that an attorney is free to contract with a client for a fee that exceeds what might otherwise constitute “reasonable” compensation, as long as the rate to be charged and general nature of the legal services to be provided are disclosed in the contract.
The standard also limits the right to contract freely by incorporating the general prohibition against enforcement of unconscionable contract provisions, specifically the factors listed in Rule 1.5, to determine whether an attorney’s fee is unconscionable.
Finally, an attorney has a contractual obligation to render performance in good faith and in a professional manner. Therefore, the attorney’s performance should be reviewed under a reasonableness standard that accounts for this obligation.
This post does not discuss all requirements for a valid fee agreement, such as informed consent to joint representation, written consent to fee-sharing agreements, and the required disclosure concerning malpractice insurance. If you have a fee dispute, at a minimum, you should have your fee agreement reviewed by an attorney experienced in ethical issues.
The post was culled from Pech v. Morgan.
Mr. Daymude consults with clients and accepts cases involving attorney-client fee disputes. For other types of cases accepted, please scroll the Home and My Practice pages. If you are seeking legal representation, please complee the Contact Form. Have a question about this post? Write a comment.