Contingent Fee Agreement Basics
Missouri Rule of Professional Conduct 4-1.5 requires a written fee agreement in contingent fee representations.
The detail that is necessary in a fee agreement is defined by the circumstances. A lawyer has a duty to communicate with the client to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. [Rule 4-1.4(b) and Comment to Rule 4-1.5]
The scope of representation should be set forth and any limits on what the lawyer will do must be clearly spelled out. A lawyer may limit the objectives of the representation if the client gives informed consent [Rule 4-1.2(c)] However, any limitation must accord with the Missouri Rules of Professional Conduct and other law. A client may not be asked to agree to representation so limited in scope as to violate Rule 4-1.1 relating to competence or to surrender the right to terminate the lawyers’ services or the right to settle litigation that the lawyer might wish to continue. [Comment, Rule 4-1.2] A lawyer cannot limit her duties or liability under the Missouri Rules of Professional Conduct in the fee agreement.
If a division of fees with a lawyer from another firm is involved, the client’s consent must be obtained. This consent must be confirmed in writing. The division may be based on the proportion of services performed by each lawyer or each lawyer must assume joint responsibility for the representation. [Rule 4-1.5(e)]
If you don’t want to represent the client in an appeal from the underlying representation, state so specifically.
The agreement should set forth how fees, expenses, and costs will be handled and billed, when payment is expected, and what is included in the fee (i.e. billing for telephone calls). It’s a good idea to review M.R.P.C. 4-1.5-Fees.
Rates for copying, mileage, computerized legal research, and other charges must be disclosed. If those rates differ from your firm’s actual costs, the client must be advised of and consent to the difference.
The termination of the representation should also be disclosed, including under what circumstances the attorney may withdraw, what will happen if the fees are not paid, and disposition of the client’s file.
Your file retention policy should be set out. Regarding a File Retention Policy as discussed in the Sample Engagement Letter, a form policy is available from The Bar Plan.
Forms alone cannot tell a lawyer how to comply. Rather, compliance will result from the lawyer’s understanding of the interaction of the Rules and any applicable statutes to their practice area. For example, lawyers doing workers compensation law should be aware that there are regulations on charging fees in this area and their fees are subject to the regulation by the worker’s compensation division or commission. Likewise, fees must be approved in other areas of law practice, such as bankruptcy, matters in which a minor is a client, probate, etc. These fee agreements and guidelines cannot address all the specifics that may be necessary for every client matter.
Just as important as the clauses a fee agreement may contain are clauses that are not permitted. Limited examples of such possible clause are:
The “Slow Down Work” Clause – An attorney does not have the option of unilaterally slowing down the progress of the case simply because he or she is not happy with the progress of payment, at least not without the consent of the client and then only to the extent permitted by Rule 4-3.2 Expediting Litigation
The “You Have to Agree to Let Me Withdraw” Clause – A lawyer cannot compel the client to
sign a statement concerning withdrawal contrary to the client’s true wishes or best interests.
The “I Say When the Fee Is Reasonable” Clause – A contract cannot determine the reasonableness of a fee. Rather, reasonableness is determined with reference to all of the factors set forth in Rule 4-1.5.
The “You Can Longer Object to My Fee” Clause – The Rules of Professional Conduct require a lawyer to maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accountings to the client regarding them. The mere passage of time between billing, payment and the request for an accounting does not act to limit this duty.
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