[This article will be presented in two installments, the first addressing best practices in full disclosure of fees and billing practices at intake, while the second installment in next month's issue will address how best to approach drafting and presenting written fee agreements to the client.]
Fee Agreement Woes
The oral fee agreement. My lawyer-client, a 50-year-pin member of the Washington bar, prided himself on never having had a written fee agreement with a client. When he first came to me, he was the third lawyer to represent a wife in a complicated and nasty dissolution, where the marital estate was many millions.
After he settled her case favorably, she turned on him, refusing to pay his fees, claiming he had orally agreed to handle her claim pro bono. I had to successfully prove he had an oral, hourly fee agreement and then foreclose his claim of attorney's lien to get him paid.
The ignorance of RPC 1.5(e). Another lawyer-client came to me with a dispute with an associated lawyer over the division of a contingency fee that exceeded $2 million, where the associated lawyer wanted about half.
The lawyers worked together for six months with no arrangement to share fees. Once the case settled, it took a very costly lawsuit and nearly a trial to resolve that lawyer-client's fee dispute.
The belated written fee agreement. A third client was initially retained in a highly litigated and belligerent boundary dispute. My lawyer-client fully discussed fee arrangements with his clients at intake, but despite numerous efforts, he failed to get a written fee agreement in place until shortly before the trial. He settled the case, then the clients refused to pay his fees.
We sued his clients for the fees and had to defend malpractice counterclaims in a two-week trial. At trial, he won the malpractice claims and virtually all of the fees we sued for, plus prejudgment interest, but the trial court struck his written fee agreement on the grounds he had renegotiated fee arrangements with an existing client. As a result, he lost his entitlement to an award of prevailing party attorney's fees provided for in the written agreement.
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