Fees & Billing - Chapter 3 Professional Responsibility - A Contemporary Approach (Pearce, Et Al.)

Chapter 3 Finding and Billing Clients
Part 2 Fees & Billing
George W. Conk
Adjunct Professor & Senior Fellow,
Stein Center for Law & Ethics
gconk@law.fordham.edu
Room 8-122
Ch. 3 fees and billing
New York Code of Professional Responsibility

PREAMBLE
The continued existence of a free

and democratic society depends
upon recognition of the concept
that justice is based upon the rule
of law grounded in respect for the
dignity of the individual and the
capacity of the individual through
reason for enlightened selfgovernment.
ETHICAL CONSIDERATIONS EC 2-1
The need of members of the public

for legal services is met only if
they recognize their legal
problems, appreciate the
importance of seeking assistance,
and are able to obtain the services
of acceptable legal counsel.
ETHICAL CONSIDERATIONS EC 2-1
The legal profession should

educate people to
recognize their problems
facilitate the process of intelligent
selection of lawyers and
assist in making legal services
fully available.
New York Code of Professional Responsibility

PREAMBLE
Canon 2
A Lawyer Should Assist The Legal

Profession in Fulfilling Its Duty to
Make Legal Counsel Available
Financing legal representation

of the indigent
Direct government funding

- Legal Services Corporation
- Public Defenders
Charity/non-profits
Pro bono
Assigned counsel
Interest on lawyers trust accounts
Interest on Lawyers Trust Accounts
A taking?
Rule of thumb: if administrative

costs exceed gain `taking is
permissible
The current crisis in the Legal

Services programs
M.R. 6.1 Voluntary Pro Bono

Publico Service
Every lawyer has a professional

responsibility to provide legal
services to those unable to pay.
A lawyer should aspire to render

at least (50) hours of pro bono
publico legal services per year.
Rule 6.1 Voluntary Pro Bono

Publico Service
A lawyer should:
(a) provide a substantial majority of
the (50) hours of legal services
without fee or expectation of fee to:
(1) persons of limited means or
(2) charitable, religious, civic,
community, governmental and
educational organizations in matters
that are designed primarily to
address the needs of persons of
limited means; and
Rule 6.1 (b) Additional Services
(1) delivery of legal services at no fee or

substantially reduced fee to individuals,
groups or organizations seeking to secure or
protect civil rights, civil liberties or public rights,
or charitable, religious, civic, community,
governmental and educational organizations in
matters in furtherance of their organizational
purposes, where the payment of standard legal
fees would significantly deplete the organization's
economic resources or would be otherwise
inappropriate
(2) delivery of legal services at a

substantially reduced fee to persons of
limited means; or
10
Rule 6.1 Voluntary Pro Bono

Publico Service
(3) participation in activities for

improving the law, the legal
system or the legal profession.
In addition, a lawyer should
voluntarily contribute financial
support to organizations that
provide legal services to persons
of limited means.
11
Rule 6.2 Accepting Appointments
A lawyer shall not seek to avoid

appointment by a tribunal to represent a
person except for good cause, such as:
(a) representing the client is likely to result
in violation of the Rules of Professional
Conduct or other law
(b) representing the client is likely to result
in an unreasonable financial burden on the
lawyer; or
(c) the client or the cause is so repugnant to
the lawyer as to be likely to impair the
client-lawyer relationship or the lawyer's
Ch. 3 fees and
billing client.
12
ability to represent
the
The assistance of
counsel
6th Amendment, Constitution
of the United States
13
The right to counsel
The right to counsel may well be the

most basic constitutional right of all
New York has "consistently exercised
the highest degree of vigilance in
safeguarding the right of an accused
to have the assistance of an attorney
at every stage of the legal
proceedings against him [or her]
Dissent: Hurell-Harring v. NY (3rd
Dept. 2009)
14
COMMISSION ON THE FUTURE OF

INDIGENT DEFENSE SERVICES
FINAL REPORT TO THE CHIEF JUDGE

of the State of New York (2006)
"[t]he amount of monies
currently allocated within the
State ofNew York for the
provision of constitutionallymandatedindigent defense is
grossly inadequate.
15
Findings
(a) excessive caseloads

(b) inability to hire full-time
defenders
(c) lack of adequate support services
(d) lack of adequate training
(e) minimal client contact and
investigation
16
Who can afford a

lawyer?
Gideon v. Wainwright
The civil Gideon movement
17
Wages
Source: U.S. Department of Labor, Bureau of
Labor Statistics 2010
Maids and housekeeping workers
Median hourly wage
Median annual earnings
$10.17
$21,150
18
Wages
Food Prep and Serving Workers

National Mean hourly wage $10.21
Mean annual wage
$ 21, 240
19
Wages
Family & general practitioners

National Mean hourly wage $83.93
Mean annual wage
$ 173,860
Registered nurses
National mean hourly wage $ 32.56
Mean annual wages
$ 67,720
20
The end of the Guild

Monopoly pricing
Free market and attorney
advertising
21
The Lot of Lawyers

Overworked?
Overpaid?
22
Self employment
About 27 percent of lawyers are selfemployed, either as partners in law firms

or in solo practices.
23
Lawyers mean earnings

BLS 2010
Local Government Hourly: $44.34

Annual: $92,220
State Government Hourly: $39.51
Annual: $82,190
Federal Executive Branch Hourly:
$62.60 Annual: $130,210
Management of Companies Hourly
$76.12 Annual $158,340
24
Some data on Lawyers income

US Dept of Labor 2010
http://www.bls.gov/oes/current/oes231011.htm#st
California Hourly $74.87
Annual $155,740
New York Hourly $72.36
Annual: $150,510
Florida Hourly $56.75 Annual $118,040
Texas Hourly $61.85 Annual $128,650

25

http://www.bls.gov/oes/current/oes231011.htm#st
California Hourly $74.87
Annual $155,740
New York Hourly $73.79
Annual: $153,490
Florida Hourly $59.10 Annual $123,040
Texas Hourly $64.52 Annual $134,200

26

US Dept of Labor h
ttp://www.bls.gov/oco/ocos053.htm
Median annual earnings - all wage-andsalaried lawyers

$102,470
75%/25%
$69,910 to $145,600
Median annual earnings in the industries
employing the largest numbers of
lawyers in May 2006 were:
Management of companies
$128,610
Federal Government: $119,240
Legal services:
$108,100
Local government:
$78,810
State government:
$75,840
27

US Dept of Labor h
Median salaries of lawyers 9 months

after graduation, 2005
by Type of work
All graduates
$60,000
Private practice
$ 85,000
Business
$60,000
Government
$46,158
Academic/judicial clerkships
$45,000
Source: National Association of Law
28
Placement Ch. 3 fees and billing
Lawyers mean earnings

BLS 2010
Local Government Hourly: $44.34

Annual: $92,220
State Government Hourly: $39.51
Annual: $82,190
Federal Executive Branch Hourly:
$62.60 Annual: $130,210
Management of Companies Hourly
$76.12 Annual $158,340
29

Median annual earnings - all wage-andsalaried lawyers

$102,470
75%/25%
$69,910 to $145,600
Median annual earnings in the industries
employing the largest numbers of
lawyers in May 2006 were:
Management of companies
$128,610
Federal Government: $119,240
Legal services:
$108,100
Local government:
$78,810
State government:
$75,840
30

US Dept of Labor h
Median salaries of lawyers 9 months

after graduation, 2005
by Type of work
All graduates
$60,000
Private practice
$ 85,000
Business
$60,000
Government
$46,158
Academic/judicial clerkships
$45,000
Source: National Association of Law
31
Placement Ch. 3 fees and billing
The American Rule
Free market pricing
Each party bears its own

costs
32
Counsel fees as an element of

damages
Quiet title
Legal malpractice (NY v. NJ)
`First party claims on liability
insurance policy
Litigation misconduct
Contractual
33
Court Awarded Fees state law

Chancery cases
Common Funds
Statutory fees
Statutory Discrimination
Cases
Sanctions
34
Fee shifting statutes
* Civil rights 42 USC 1988 (prevailing

party)
* Patent infringement 35 USC 285
(exceptional cases)
Copyright 5 USC 505 (may to prevailing
party)
* ERISA 29 USC 1132: - by participant or
beneficiary discretionary
some degree of success on the
merits.
- in collection action mandatory
* EAJA 28 USC 2412 actions v. U.S. (non
35
EAJA 28 U.S.C. 2412
Under the Equal Access to Justice

Act, a court in a civil action against
the United States shall award to a
prevailing party other than the
United States fees and other
expenses . . . incurred by that party
if the position of the United States
was not substantially justified.
36
Fee shifting: 42 USC 1988

Proceedings in vindication of civil rights
(b) Attorney's fees. In any action

or proceeding to enforce a provision
of 42 USC 1981-1983, 1985, 1986,
title IX of Public Law 92-318, the
Religious Freedom Restoration Act of
1993, the Religious Land Use and
Institutionalized Persons Act of 2000,
title VI of the Civil Rights Act of 1964,
section 40302 of the Violence
Against Women Act of 1994,
37
Fee shifting: 42 USC 1988

Proceedings in vindication of civil rights
the court, in its discretion, may allow
the prevailing party, other than the
United States, a reasonable
attorney's fee as part of the costs
(c) Expert fees. the court, in its
discretion, may include expert fees
as part of the attorney's fee.
38
When fees are shifted
Lodestar
Risk enhancement
Fee shifting statutes
39
OBannon v. NCAA
40
OBannon v. NCAA
Nice work if you can get it?
Attorneys fees
$46,856,319.46
Clayton Act recoverable costs

$5,555,739.07
The lodestar: $985 - $250/hour
41
Clayton Act fee shifting
15 U.S.C. 26 provides that [a]ny

person.. shall be entitled to sue for
injunctive relief against threatened
loss or damage by a violation of the
antitrust laws . . . . In any action
under this section in which the
plaintiff substantially prevails,
the court shall award the cost of
suit, including a reasonable
attorneys fee, to such plaintiff.
42
Plaintiffs counsels motion for fees

OBannon v. NCAA
Reasonable fees and costs span

every item of service which, at
the time rendered, would have
been undertaken by a
reasonable and prudent lawyer
to advance or protect his clients
interest . . . .
43
NCAA seeks steep cuts in plaintiffs counsel fees
44
NCAA objects to fees for
work prior to September 1, 2012

when Ps theory of the case changed
work done solely to advance claims
upon which Ps did not substantially
prevail
claims that were essentially
abandoned
unnecessary, redundant or inefficient
work
unsupported by plaintiffs billing
records or
45
R. 1.5 - A Reasonable Fee
(a) A lawyer shall not make an

agreement for, charge, or collect an
unreasonable fee or an unreasonable
amount for expenses. Factors to be
considered in determining the
reasonableness:
(1) the time and labor required,
the novelty and difficulty of the
questions involved, and the skill
requisite to perform the legal
service properly
46
(2) the likelihood, if apparent to

the client, that the acceptance of
the particular employment will
preclude other employment by
the lawyer
(3) the fee customarily charged

in the locality for similar legal
services
47
(4) the amount involved and the

results obtained;
(5) the time limitations imposed

by the client or by the
circumstances
48
(6) the nature and length of the

professional relationship with
the client;
(7) the experience, reputation,

and ability of the lawyer or
lawyers performing the services
49
(8) whether the fee is fixed

or contingent.
50
The writing requirement

Fees
51
R. 1. 5 Fees
(b) The scope of the

representation and the basis or
rate of the fee and expenses for
which the client will be responsible
shall be communicated to the
client, preferably in writing
52
R. 1. 5 Fees
before or within a reasonable time

after commencing the
representation,
except when the lawyer will charge
a regularly represented client on
the same basis or rate.
Changes in the basis or rate of the
fee or expenses shall also be
communicated to the client.
53
Variations writing reqt
The ABA in 2002 rejected a

writing requirement
5 states require it for new clients
only
NY omits preferably
NY reqs writing where required
by rule or statute (e.g.
contingent fees, domestic
relations)
Which is the better rule?
54
Remedial Devices re Fees
Reduce fees
Deny fees entirely
Arbitration/ADR
Award fees quantum meruit
Sanction attorneys
Referral to disciplinary
authorities
Criminal prosecution
55
Q. 3-11 p. 248 taking the call, getting

to work subject to discipline?
A) Yes - Must disclose fee basis

before starting work
B) Yes -Must confirm fee in writing
C) No disclosed fee in reasonable
time
D) No need only disclose fee on
request
56
Q.3-12; 3-13 p. 249 the 72 hour day
Q. 3-12 & 3-13 can I bill two

clients for the same hour?
Yes
No
57
Q. 3-14, Q. 3-15, Q. 3-16 p. 250
Stock material
Disbursements
Outsourcing
58
Does hourly billing encourage

inefficiency?
Richmond:
Hourly billing forces clients and their
counsel to think carefully about
strategy and the need to perform
particular tasks when budgeting a
project.
In contrast, flat-fees . . . are a
potential disincentive to zealous
advocacy [because they] encourage
attorneys to do as little work as
59
Q. 3-17, p. 262 A piece of the action?
Is it permissible to enter an
agreement for 20% of the value of
royalties?
Does that violate the RPC 1.8 bar on

acquiring a proprietary interest in a
cause of action or the subject matter
of litigation?
Would 50% be OK? 80%?
60
Rule 1.8 Conflict of Interest: Current

Clients: Specific Rules
(1) the transaction and terms on
which the lawyer acquires the
interest are fair and reasonable
to the client and are fully
disclosed and transmitted in
writing in a manner that can be
reasonably understood by the
client
61

(a) A lawyer shall not enter into

a business transaction with a
client or knowingly acquire an
ownership, possessory, security
or other pecuniary interest
adverse to a client unless
62

(2) the client is advised in

writing of the desirability of
seeking and is given a
reasonable opportunity to seek
the advice of independent legal
counsel on the transaction
63

(3) the client gives informed

consent, in a writing signed by
the client, to the essential terms
of the transaction and the
lawyer's role in the transaction,
including whether the lawyer is
representing the client in the
64
MR.P.C. 1.8 Conflicts of interest
(i) A lawyer shall not acquire a

proprietary interest in the cause of
action or subject matter of litigation
the lawyer is conducting for a client,
except that the lawyer may:
(1) acquire a lien authorized by
law to secure the lawyer's fee or
expenses; and
(2) contract with a client for a
reasonable contingent fee in a
civil case.
65
IT WAS THE BEST OF TIMES, IT WAS THE WORST OF

TIMES:
THE PRECARIOUS NATURE OF THE PLAINTIFFS
PRACTICE IN TEXAS
STEPHEN DANIELS AND JOANNE MARTIN
TEXAS LAW REVIEW 1781 (2002
66
The precarious nature of the

plaintiffs practice in Texas
The one-shot nature of the

practice
Political risk
Contingent fees - shared
Division of labor within the trade
Heavy hitters and bread & butter

lawyers
67
Division of labor within the trade
Bread & Butter 1 Auto 51.2%
BB 2
Heavy hitters 1
Auto 27% Med Mal 13%,
Products 9%
HH 2 Med Mal 20% Auto 15%,
Auto 40%
Comml 13%
68
Median case value
B&B 1 $7,250
B&B 2 $25,000
HH 1
HH 2
$71,000
$750,000
69
Plaintiffs lawyers net income Texas

2000 in quartiles by # of practitioners
B&B 1 - $100, 000 - $124,999
B&B 2 $100,000 - $124,999
HH 1 $125,000 - $149,999
HH2 $150,000 - $199,999
70
Sources of business (Texas PI)
% who advertise
YP 70% +/- all four categories
Mail to other lawyers BB 1 2.9%, BB
2 6.5%, HH1 6.7%, HH 2 25.2%
#1 source of cases by quartile
BB 1Advertising (20%)
BB 2 Clients (34%)
HH 1 Lawyers (42.2%)
HH 2 Lawyers (55%)
71
Q.3-18 Software v. High Tech Law

RPC 1.8 p. 268
A 2 % equity interest in the

client start up
Is it fair and reasonable
Notice of desirability of outside

counsel
Informed consent, in writing

72
Changing in midstream (Q. 3-19, p. 278)

Restatement 18
(a) if the contract or modification
is made beyond a reasonable
time after the lawyer has begun
to represent the client in the
matter the client may avoid it
unless the lawyer shows that the
contract and the circumstances
of its formation were fair and
reasonable to the client
73
Lawrence v. Miller (NY 2008) p. 265
$40 million for five months work!
Motion on the pleadings
Reasonable?
Unconscionable?
Enforceable?
74
Lawrence v. Miller (NY 2008) p. 280

Given the courts' role in closely
scrutinizing contingent fee
agreements even if..an agreement
is not determined to be
unconscionable as of its inception
[C]ircumstances arising after
contract formation can render a
contingent fee agreement
unenforceable where the amount of
the fee, combined with the large
percentage of the recovery it
represents, seems disproportionate
75
Ethical Consideration 2-17

Model Code of Prof. Resp.
Determination of a proper fee
requires consideration of the
interests of both client and lawyer.
A lawyer should not charge more
than a reasonable fee, for excessive
cost of legal service would deter
laymen from utilizing the legal
system in protection of their rights.
An excessive charge abuses the
professional relationship between
lawyer and client
76
UCC SECTION 2-302. UNCONSCIONABLE

CONTRACT OR TERM
1) If the court as a matter of law finds

the contract or any term of the contract
to have been unconscionable at the time
it was made, the court may
- refuse to enforce the contract
- enforce the remainder of the contract

without the unconscionable term
- limit the application of any

unconscionable term
77
California State Bar 4-200
(A) Amembershall not enter into

an agreement for, charge, or
collect an illegal or unconscionable
fee.
(B) Unconscionability of a fee shall
be determined on the basis of all
the facts and circumstances
existing at the time the agreement
is entered into except where the
parties contemplate that the fee
will be affected by later events.
Chapter 4 Counsel Fees
78
Q. 3-20 p. 284 Contingent fees

in criminal cases
Why not permit it?
If you keep me out of jail
79
The criminal defense ban
In Commonwealth v. Facella, 679

N.E.2d 221, 226 (Mass. App. Ct.
1996) defendant was charged with
armed assault with intent to murder
the retainer agreement provided that
defense counsel Beatrice
would be paid an additional $ 15,000
if he negotiated a sentence of no
more than ten years. He did so.
Should such contracts be barred?
80
Q. 3-21 p 286 Guaranteeing a note

Is the lawyer subject to
discipline?
(A) Yes, because Attorney is lending
her credit to Client.
(B) Yes, because Attorney is helping
to finance litigation.
(C) No, because the funds will be
used for trial preparation.
(D)No, because Attorney took the
case on a contingent fee basis.
81
Q. 3-22 p. 287 the Barefoot

child
Are the corporal works of mercy

barred?
82
Q. 3-23 Easing the burden p.

288
A) accept credit cards

B) arrange a bank loan for fee
payment
C) take publication rights
What about the First Amendment?
Arent royalties items in commerce?
83
Dividing the money

Referral fees and division of
fees among law firms
84
Q. 3-24 Dividing the fees p.288

Is the lawyer subject to discipline?
(A) Yes, unless Clients consent is in
writing.
(B) Yes, because Alpha will not try the
case.
(C) No, if the division of the fee
between Alpha and Beta is in
proportion to actual work done by
each.
(D)No, because the total fee does not
differ from that contracted for by Alpha
85
Dividing fees among lawyers
Lawyers fees are not shared with

non-lawyers
Within a firm
Lawyers can freely share fees
Of counsel?
Outside a firm
Proportionate to work and expense
Assumption of joint legal
responsibility
With clients consent in writing
With a certified specialist (minority
rule)
86
R. 1.5 (e) Division of fees
A division of a fee between

lawyers who are not in the same
firm may be made only if:
(1) the division is in proportion
to the services performed by
each lawyer or
each lawyer assumes joint
responsibility for the
representation
87
R. 1.5 (e) Division of fees
(2) client agrees to the

arrangement, including the
share each lawyer will receive,
and the agreement is confirmed
in writing and
(3) the total fee is reasonable.
88
New Jersey Rules of Court

Rule 1:39 (d) Certification of attorneys
Division of Fees. A certified
attorney may divide a fee for
legal services without regard to
services performed or
responsibility assumed by the
referring attorney
IF
the total fee does not exceed
reasonable compensation
BUT
Matrimonial law matters are
89
ABA Formal Opinion 464 (2013)
Lawyers subject to the Model Rules

may work with other lawyers or law
firms practicing in jurisdictions with
rules that permit sharing legal fees
with nonlawyers [such as the U.K.]...
provided that there is no interference
with the lawyers independent
professional judgment.
90
Q. 3-25 p. 89 Is it proper for the lawyer to

accept the aunts check?
(A) Yes, if Aunt does not attempt to
influence Attorneys conduct of the case.
(B) Yes, if Attorneys charges to Defendant
are reduced accordingly.
(C) No, because Aunt is attempting to
finance litigation to which she is not a
party.
(D)No, unless Attorney first informs
Defendant and obtains Defendants
consent to retain the payment.
91
Q. 3-26 Safeguarding property of

others, p. 291
Is the attorney subject to discipline?

(A) Yes, because the attorney had a
duty to promptly notify the client of
the receipt of the $1,000,000.
(B) Yes, because the attorney gave
unsolicited advice about nonlegal
matters.
(C) No, because the client did not
object to the withholding of the
notice and funds.
(D) No, because the attorney acted
92
RPC 1.15 safekeeping property
(e) When in the course of

representation a lawyer is in
possession of property in which two
or more persons (one of whom may
be the lawyer) claim interests, the
property shall be kept separate by
the lawyer the dispute is resolved.
The lawyer shall promptly distribute
all portions of the property as to
which the interests are not in
dispute.
93
Q. 3-27 p. 291 Borrowing money from trust
No harm no foul?
Is ratification by the client a
defense?
Relevant Rules
RPC 1.15 (a)
RPC 1.15 (c)
94
(a) A lawyer shall hold property of

clients or third persons that is in a
lawyer's possession in connection
with a representation separate
from the lawyer's own property.
Other property shall be identified as
such and appropriately
safeguarded.
95
Q. 3-28, p. 292 What should the attorney do

with the $1,600?
(A) Take it
(B) Put the $600 in the fee account
and leave $1,000 in the clients trust
account until the attorney's fee for
the final appeal is determined.
(C) Transfer $600 to the fee account
and send the client a $1,000 check
on the clients' trust account.
(D) Send the client a $1,000 check
and leave $600 in trust
96
Q. 3-29, p. 293 Where to put the

money?
Is the attorney subject to

discipline for putting the
estimated fees to be earned in
the attorney fee account?
97
(c) A lawyer shall deposit into a

client trust account legal fees
and expenses that have been
paid
in advance, to be withdrawn by
the lawyer only as fees are
earned or expenses incurred.
98
(d) Upon receiving funds or other

property in which a client or
third person has an interest, a
lawyer shall promptly notify the
client or third person.
99
R. 1.5 Fees
Exception to Prohibited Contingent Fees
[6] ... - recovery of post-judgment

balances due under support,
alimony or other financial orders
100
Q. 3-30 - p. 305
May the State demand as a

condition of settlement that
plaintiff give up fees to which it
may be entitled as a prevailing
party under 42 USC 1988?
101
Evans v. Jeff D [1986] p. 291
Brennan dissenting
by awarding attorney's fees
Congress sought to attract
competent counsel to represent
victims of civil rights violations.
Congress' primary purpose was to
enable "private attorneys general" to
protect the public interest by
creating economic incentives for
lawyers to represent them.
102
Contingent fees
Lawyers working on spec
103
Contingent Fees RPC. 1.5
Generally permitted (except if

prohibited)
Must be written retention

agreement
Basis of calculation must be

stated
Litigation expenses deducted or

104
Contingent Fees - generally

The norm for plaintiffs in PI
cases, workers compensation, SS
disability, subrogation claims,
debt collection
Closely regulated in PI cases by
statute and rule
Barred in
- criminal defense
- marriage dissolution & child
support cases
105
Restatement LGL 35, cmt b
(p. 249)
Contingent-fee arrangements
perform three valuable functions.
1) enable persons who could not

otherwise afford counsel to
assert their rights, paying their
lawyers only if the assertion
succeeds
106
2) give lawyers an additional

incentive to seek their clients'
success and to encourage only
those clients with claims having
a substantial likelihood of
succeeding.
107
3) enable a client to share the

risk of losing with a lawyer, who
is usually better able to assess
the risk and to bear it by
undertaking similar
arrangements in other cases
108
MRPC 1.5 (d) A lawyer shall not
Enter into an arrangement for,

charge or collect:
1) any fee in a domestic relations
matter, the payment of which is
contingent on divorce or the amount
of alimony or support or property
settlement in lieu thereof
2) a contingent fee for representing a
defendant in a criminal case
109
MRPC 1.5 Contingent Fees

Permitted
(c) in a writing signed by the

client
shall state the method by which

the fee is to be determined,
including the percentage or
percentages that shall accrue to
the lawyer in the event of
110
MRPC 1.5 Contingent Fees

Permitted
Expenses
whether such expenses are to be
deducted before or after the
contingent fee is calculated
In the event of loss
must clearly notify the client of any
expenses for which the client will
be liable if the client does not
prevail
111
R. 1.5 Contingent Fees Permitted
Accounting
the lawyer shall provide the
client with a written statement
stating the outcome of the
matter and, if there is a
recovery, showing the
remittance to the client and the
method of its determination
112
Contingent Fees - New York

NY CLS Jud 474
PI and wrongful death claim

contingent fees are set by each of
the four Judicial Departments
BUT
Medical malpractice fees are set
by 474
Infant and guardian fees set by
court
113
SUPREME COURT RULES 3rd JUDICIAL DEPT.

ARTICLE 1. APPELLATE DIVISION
SUBARTICLE B. ATTORNEYS
NY CLS Sup Ct 806.13 (a) (2007)
The receipt, retention or sharing

of contingent compensation in
excess of the schedule of fees
shall constitute the exaction of
unreasonable and unconscionable
compensation
114
SUPREME COURT RULES 3rd JUDICIAL DEPT.

ARTICLE 1. APPELLATE DIVISION
SUBARTICLE B. ATTORNEYS
NY CLS Sup Ct 806.13 (a) (2007)
SCHEDULE A
(1) 50 per cent on the first $ 1,000 of the sum
recovered,
(2) 40 per cent on the next $ 2,000 of the sum
recovered,
(3) 35 per cent on the next $ 22,000 of the
sum recovered,
(4) 25 per cent on any amount over $ 25,000

of the sum recovered
115
Extraordinary result
may justify higher
fee
SCHEDULE B
A percentage not exceeding
33 1/3 % of the sum recovered
No additional compensation
because of extraordinary
circumstances may be sought
116
How the fee is computed
Net sum recovered

after deducting
expenses and disbursements for
Filing fees
Depositions
Medical records
Expert witnesses
Investigative or other services
117
(ii) if.. the attorney agrees to pay costs and

expenses of the action pursuant to Judiciary
Law section 488(2)(d),
on the gross sum recovered
before deducting expenses and
disbursements.
In computing
the fee, the costs as taxed,

including interest upon a
judgment, shall be deemed part
of the amount recovered.
118
(ii) if.. the attorney agrees to pay costs

and expenses of the action pursuant to
Judiciary Law section 488(2)(d),
For the following or similar items

there shall be no deduction in
computing such percentages:
liens, assignments or claims in
favor of hospitals, for medical
care and treatment by doctors
and nurses, or of self-insurers or
insurance carriers.
119
How the fee is computed
Taxed costs and interest upon a

judgment are part of the amount
recovered
120
How the fee is calculated
No deduction for liens,

assignments or claims in favor of
hospitals, for medical care and
treatment by doctors and nurses,
or self-insurers or insurance
carriers.
121
How the fee is calculated
Common liens
Medicare
Medicaid (and other public
entitlement)
Assignments of benefits
Union-mgt benefit funds (ERISA)
Workers compensation
122
NY CLS Jud 474-a Contingent fees in claims or

actions for medical, dental or podiatric malpractice
30 % of the first $ 250,000 of the sum

recovered;
25 % of the next $ 250,000 of the sum
recovered;
recovered;
recovered;
10 % of any amount over $ 1,250,000 of
the sum recovered.
123
NY CLS Jud 474-a Extraordinary Circumstances
Trial judge has discretion to fix as

reasonable compensation an
amount greater than 474-a
- in extraordinary circumstances
- without regard to the claimant's
consent
BUT not in excess of that provided
by contract between attorney &
client
Are such reductions in med mal
124
NY Rules of the Appellate Courts

691.20:
Retainer and Closing Statements
2nd Judicial Department
Written retainers, etc. reqd in:

personal injury
property damage
wrongful death
condemnation or change of grade
proceedings
125

691.20 Retainer and Closing Statements
(1) Every attorney who accepts a

retainer or enters into an agreement,
express or implied, for compensation
for services whereby his
compensation is to be contingent in
whole or in part upon successful
prosecution or settlement
Shall, within 30 days sign personally
and file with the Office of Court
Administration of the State of New
York a written statement of such
126
retainer or agreement.

(b) Closing statement; statement

where no recovery.
(1) A closing statement shall be filed in
connection with every claim in which
a retainer statement is required, as
follows: Every attorney upon receiving,
retaining or sharing any [such] sum
shall, within 15 days after such
receipt, retention or sharing, sign
personally and file with the Office of
Court Administration and serve upon
127
the client a closing statement

Retainer agreement, under which

attorney would receive [less than rules
permit] was not enforceable due to
failure to timely file. Connors v. Wildstein
(2 Dept. 2000)
Attorney was suspended from practice

of law for one year .. For failing to
prepare retainer statement for filing
with Office of Court Administration in
personal injury case and by failing to
128
prepare closing
statement Matter
of
N.J. Court Rules, R. 1:21-7 Contingent fees
(c) In any [tort claim for damages] but

excluding statutorily based
discrimination and employment claims,
and the client is not a subrogee, an
attorney shall not contract for, charge,
or collect a contingent fee in excess of
the following limits
129
N.J. Court Rules, R. 1:21-7 Contingent fees in

Personal Injury and Wrongful Death Cases
(1) 33 1/3% on the first $ 750,000 recovered;
(2) 30% on the next $ 750,000 recovered;
(3) 25% on the next $ 750,000 recovered;
(4) 20% on the next $ 750,000 recovered
Court will set fee if above $3million

130
25% in case of minors and mentally

incapacitated persons if the case settles
without trial
includes services rendered on any

appeal or review proceeding or on any
retrial, but this shall not be deemed to
require an attorney to take an appeal
131
(f) If at the conclusion of a matter an

attorney considers the fee permitted by
paragraph (c) to be inadequate, an
application on written notice to the
client may be made to the Assignment
Judge for the hearing and determining
of a reasonable fee in light of all the
circumstances.
132
Federal Tort Claims Act

Statutory contingent fee
limits
133
28 U.S.C. 2678. Attorney fees; penalty
No attorney shall charge, demand,

receive, or collect for services
rendered, fees in excess of 25% of
any judgment or [settlement]
or in excess of 20% of any award,

compromise, or settlement (at
administrative adjustment stage]
[28 USC 2672]
134
28 U.S.C. 2678. Attorney fees; penalty
Any attorney who charges,

demands, receives, or collects for
services rendered in connection
with such claim any amount in
excess of that allowed under this
section, if recovery be had, shall
be fined not more than $ 2,000 or
imprisoned not more than one
year, or both.
135
Setting a Reasonable Fee for the private attorney

general - Johnson v. Georgia Hwy Express (5th
Cir.-OLD 1974)
Title VII of the Civil Rights Act of

1964, 42 U.S.C.A. 2000e-5(k):
the Court, in its discretion, may

allow the prevailing party . . . a
reasonable attorney's fee as part of
the cost of the litigation.
136

Cir.-OLD 1974)
If [the plaintiff] obtains an

injunction, he does so not for
himself alone but also as a "private
attorney general," vindicating a
policy that Congress considered of
the highest priority.
137

Cir.-OLD 1974)
If successful plaintiffs were routinely

forced to bear their own attorneys' fees,
few aggrieved parties would be in a
position to advance the public interest
by invoking the injunctive powers of the
federal courts.
This Court..."to make sure that Title VII

works," has liberally applied the
attorney's fees provision
138
The Johnson Factors
The Disciplinary rules/RPC 1.5

factors PLUS
(10) The "undesirability" of the
case.
Civil rights attorneys face hardships in
their communities because of their
desire to help the civil rights litigant.
This can have an economic impact on
his practice which can be considered by
the Court.
139
What is a reasonable
fee?
Lodestar
Contingent fee enhancement
140
Perdue v. Kenny A. ex rel. Winn, 130 S. Ct.

1662 (2010) p. 284 6 Rules
1) a reasonable fee is one that is

sufficient to induce a capable
attorney to undertake the
representation of a meritorious civil
rights case but that does not provide
a form of economic relief to improve
the financial lot of attorneys
2) there is a strong presumption
that the lodestar method yields a
sufficient fee.
141

1662 (2010) p. 284 6 Rules
3) the Court has never sustained an

enhancement of a lodestar amount
for performance, but has repeatedly
said that an enhancement may be
awarded in rare and exceptional
circumstances.
4) the lodestar includes most, if not
all, of the relevant factors
constituting a reasonable attorney's
fee.
142

1662 (2010) p. 284 6 Rules
5) the burden of proving that an

enhancement is necessary must be
borne by the fee applicant.
6) an applicant seeking an
enhancement must produce specific
evidence supporting the award, to
assure that the calculation is
objective and capable of being
reviewed on appeal.
143
New York
Rule 1.5
144
Fees for Legal Services

[22 NYCRR 1200.11]
R. 1.5 (a)
A lawyer shall not make an

agreement for, charge, or collect
an excessive or illegal fee or
expense.
145
R. 1.5 (a) Fee for Legal Services

[22 NYCRR 1200.11]
A fee is excessive when, after a

review of the facts, a reasonable
lawyer would be left with a
definite and firm conviction that
the fee is excessive.
146
Model Rule 1.5: Fees
(a) A lawyer shall not make an

agreement for, charge, or collect
an unreasonable fee or an
unreasonable amount for
expenses.
147
R. 1.5 (1) Factors to consider
time and labor required
novelty and difficulty of the

questions involved
skill needed to perform the legal

service properly
148
R. 1.5 Factors to consider
(2) the likelihood, if apparent to

the client, that the acceptance of
the particular employment will
preclude other employment by the
lawyer
149

(3) the fee customarily charged in
the locality for similar legal
services
150

(4) the amount involved and the
results obtained
151
(5) the time limitations imposed

by the client or by the
circumstances
(6) the nature and length of the

professional relationship with
the client
152
(7) the experience, reputation,

and ability of the lawyers
153
(8) is the fee fixed or contingent
154
Not only fees, but attitudes shift

City of Burlington v. Dague, 112 S. Ct. 2638 (U.S. 1992)
JUSTICE SCALIA delivered the opinion of the Court.
The "lodestar" is "the product of reasonable

hours times a reasonable rate"
District Court declared that Dague's "risk of not

prevailing was substantial" and that "absent an
opportunity for enhancement, [Dague] would
have faced substantial difficulty in obtaining
counsel of reasonable skill and competence in
this complicated field of law [Clean Water
Act]."
It concluded a 25% enhancement is
appropriate, but anything more would be a
3 fees and billing
155
windfall to the Ch.
attorneys."
Dague v. City of Burlington
We note at the outset that an

enhancement for contingency would
likely duplicate in substantial part
factors already subsumed in the
lodestar. The risk of loss in a
particular case (and, therefore, the
attorney's contingent risk) is the
product of two factors: (1) the legal
and factual merits of the claim, and
(2) the difficulty of establishing those
merits.
156
Dague v. City of Burlington
The second factor, however, is

ordinarily reflected in the lodestar -either in the higher number of hours
expended to overcome the difficulty,
or in the higher hourly rate of the
attorney skilled and experienced
enough to do so.
Taking account of it again through
lodestar enhancement amounts to
double counting.
157

We see a number of reasons for

concluding that no contingency
enhancement whatever is
compatible with the fee-shifting
statutes at issue.
158

Just as the statutory language

limiting fees to prevailing parties
bars a prevailing plaintiff from
recovering fees relating to claims on
which he lost, so should it bar a
prevailing plaintiff from recovering
for the risk of loss.
159

To award a contingency
enhancement under a fee-shifting
statute would in effect pay for the
attorney's time (or anticipated time)
in cases where his client does not
prevail.
160

An attorney operating on a
contingency-fee basis pools the
risks presented by his various
cases: cases that turn out to be
successful pay for the time he
gambled on those that did not.
Gambling? Or entrepreneurial riskCh. 3 fees and billing
161
Rendine v. Pantzer, 141 NJ 292 (2005)
We are unpersuaded by Justice

Scalia's suggestion in Dague,
supra, that awarding
contingency enhancement under
a fee-shifting statute "would in
effect pay for the attorney's time
(or anticipated time) in cases
where his client does not
prevail." ...
162
In our view the case for

contingency enhancement has
nothing to do with the amount of
time lawyers invest in losing
cases.
It rests on the desire to enable

parties to compete for legal
services in the private market.
163
A more practical approach is that

outlined in the Delaware Valley II
dissent. A court's job is to
determine
1) was the case was taken on a
contingent basis?
2) was the attorney able to
mitigate the risk of nonpayment in
any way?
3) were other economic risks were
aggravated by the contingency of
164
It is the actual risks or burdens

that are borne by the lawyer or
lawyers that determine whether
an upward adjustment is called
for.'
165
We conclude that contingency

enhancements in fee-shifting cases
ordinarily should range between 5%
and 50% of the lodestar fee,
the enhancement in typical
contingency cases should range
between 20% and 35 % of the
lodestar.
166
Enhancements should never exceed

100%of the lodestar
Enhancement of that size will be
appropriate only in the rare and
exceptional case in which
- the risk of nonpayment has not been
mitigated at all,
i.e., where the "legal" risk constitutes
"an economic disincentive independent
of that created by the basic contingency
in payment *
[AND] the result achieved * * * is
Ch. 3 fees
billing
significant and
ofandbroad
public167interest.
Aggregate Litigation
Managing the conflicts among
claimants and lawyers
168
Principal types of aggregate claims

Class actions (FRCP 23)
- fairness hearings
Single action with multiple

claimants
Quasi class actions/Consolidated

case management
- state mass tort case

management
169
R. 1.8 (g) Conflicts Aggregate

Litigation
A lawyer who represents two or

more clients shall not participate
in making an aggregate
settlement of the claims of or
against the clients, or in a
criminal case an aggregated
agreement as to guilty or nolo
contendere pleas, unless:
170
Aggregate Litigation:
Class Actions
Fees drawn from a common
fund
171
Florin v. Nationsbank of Ga., N.A.

(7th Cir. 1995) Class actions
attorneys' fees from a "common

fund
judge-made exception to the

"American Rule
Judicial discretion -
lodestar method
percentage of recovery method
or some combination of the two

172
Florin v. Nationsbank of Ga., N.A. (7th Cir. 1995)

Class actions
Counsel for the class sought
Lodestar $ 1,863,838.75
Enhanced by risk multiplier (1.53)
= $ 2.85 million or 18.45 % of the fund
District court on remand.... allowed the

smallest possible multiplier of 1.01
173

We review the district court's award

of attorneys' fees deferentially
plaintiff class is unrepresented in
the issue of attorneys' fees
court must jealously guard the
interests of the class.
court must also be careful to sustain
the incentive for attorneys on an
"inescapably contingent" basis
174

The risk multiplier is an effort to

mimic market forces.
The district court in essence

found that the attorneys for the
class faced no risk in taking on the
case, that in the end, they were
assured of a paycheck. We
175

the benchmark in common fund

cases is 20 % - 30 %
Usual range 13 % - 20 % for
funds of $ 51-$ 75 million
6-10 % range for funds of $ 75-$
200 million
the multiplier of 1.53 leads to
attorneys' fees of $ 2.85 million about 18.5 % of the settlement
fund
176

the benchmark in common fund

cases is 20 % - 30 %
Usual range 13 % - 20 % for
funds of $ 51-$ 75 million
6-10 % range for funds of $ 75-$
200 million
the multiplier of 1.53 leads to
attorneys' fees of $ 2.85 million about 18.5 % of the settlement
fund
177
Aggregate Tort Litigation

Private agreement or judicial
control?
178
WTC Ground Zero cases
Judge Hellerstein refused to mark

cases settled when the lawyers for
City, contractors and plaintiffs
presented their agreement.
He ordered them to continue to trial,
etc.
He said that not enough money was
going to plaintiffs and too much was
going to lawyers.
Its a quasi class action, he said
179
What should the lawyers do if they

think he is overreaching?
Did the Judge have the right to

approve or disapprove a private
settlement?
Almost all the money is federal funds

(WTC Captive) - does that make a
difference?
180
Plaintiffs lawyers: $30 Million in costs

for 8 years, plus tens of millions for
staff, etc.
Defense took 1,200 deps, spent $200

M
Clients signed standard NY retainer

agreements providing 33 1/3%
contingency
* did Judge Hellerstein have the right
181
R. 1.8 (g) Conflicts Aggregate Litigation

each client gives informed
consent, in a writing signed by
the client.
The lawyer's disclosure shall
include
the existence and nature of all
the claims or pleas involved and
the participation of each person
in the settlement
Does the WTC settlement honor
these principles?
182
Quaere
* are the plaintiffs adequately

informed of the terms of the
aggregate settlement under RPC 1.8
(g)?
* do the opt outs have a realistic

chance?
* will 95% take the settlement?

183
Apportioning fees among

lawyers in MDL litigation
Individually retained lawyers
Lead counsel
State vs. Federal litigation on

parallel tracks
184
Zyprexa
Judge Jack B. Weinstein

467 F. Supp. 2d 256 (EDNY 2006)
185
Federalism: the state court problem
State-Federal Comity
Conflicts of interest due to differing
fee structures
Equity
Litigation misconduct
- state court filings to evade MDL fee
limits and common benefit
assessments
- filings of non-meritorious new
claims
186
Common benefit work by Plaitniffs

Steering committee 1
Discovery
Bellwether trials
Settlement negotiations
8000 cases settled
Claims processing and payment
procedures and implementation
Resolving Medicare and Medicaid
liens (agreement approved by all
states and federal government)
187
Attorneys fee structure
Capping fees
20% of recovery in smaller, lumpsum claims
35% of recovery in all other claims
1% hold-back from the gross
settlement , plus interest on the
escrow fund for Plaintiff Steering
Committee I (PSC 1)
PSC II not set
188
Common benefit fund purpose
Reimburse members of PSC I and

other attorneys for the time and
funds expended by them for the
common benefit of all settling
plaintiffs in
conduct of the litigation
implementation of the
settlement
189
January 5, 2007 New York Times

Lilly Settles With 18,000 Over Zyprexa
At least 1,200 suits are still

pending, the company said.
The settlement covers cases filed

in state and federal courts by law
firms or groups of firms.
The federal suits have been

overseen by Judge Jack B.
Weinstein
190
Sources of courts authority to

control fees
Inherent authority to sanction

officers of the court
FRCP Rule 11
MDL Complex Litigation Manual
28 USC 1927
22 NYCRR 130-1
191
Manual for Complex Litigation 20.312

(4th ed. 2004) Federal Judicial Center
"MDL judges generally issue orders

directing that defendants who settle
MDL-related cases contribute a fixed
percentage of the settlement to a
general fund to pay national
counsel.
What authority does that give judge

192
VI. Equity; Avoidance of Conflict of

Interest
It would be equitable to require state

plaintiffs' attorneys to pay their
proportionate share of the time and
costs incurred by PSC II in its work for
the common benefit of all plaintiffs,
state and federal. Cf. 28 U.S.C.
1407(a) (district court's ultimate goal
in multidistrict litigation is to
"promote the just and efficient
conduct of such actions").
193
VI. Equity; Avoidance of Conflict of Interest
Such an arrangement would avoid

the troubling potential for attorney
conflict of interests that otherwise
would exist: Attorneys face distorted
incentives to file cases in state courts
without respect for the best interests
of their clients because the attorneys
can use PSC II's work without paying
for it out of their fees when in state
court, but would have to pay their
fair share if they were in federal
194
VI. Equity; Avoidance of Conflict of

Interest
In state court, they may also claim

they can escape this court's
limitation on their own direct fees,
resulting in a smaller recovery for
their state clients but an increase in
their own fees. See In re
195
Fund in court - NJ Rule 4:42-9
(2) Out of a fund in court. The court

in its discretion may make an
allowance out of such a fund, but no
allowance shall be made as to issues
triable of right by a jury.
196
Fund in court - NJ Rule 4:42-9
(2)
A fiduciary may make payments on

account of fees for legal services
rendered out of a fund entrusted to
the fiduciary for administration,
subject to approval and allowance or
to disallowance by the court upon
settlement of the account.
197
1927. Counsels liability for

excessive costs
Any attorney or other person

admitted to conduct cases in any
court of the United States or any
Territory thereof who so multiplies
the proceedings in any case
unreasonably and vexatiously may
be required by the court to satisfy
personally the excess costs,
expenses, and attorneys fees
reasonably incurred because of such
198
FRCP Rule 11
Provides for sanctions for litigation

misconduct
- costs to adverse party including
attorneys fees
199
Sanctions under New York Law
200
AWARDS OF COSTS AND IMPOSITION OF FINANCIAL

SANCTIONS FOR FRIVOLOUS CONDUCT IN CIVIL
LITIGATION - 22 NYCRR 130-1.1
Costs and reasonable attorneys

fees may be awarded TO a party
injured by frivolous litigation
conduct of
Attorneys
Parties
201

Conduct is frivolous if:

(1) completely without merit in law
and cannot be supported by a
reasonable argument for an
extension, modification or reversal
of existing law;
(2) it is undertaken primarily to
delay or prolong the resolution of
the litigation, or to harass or
202

(3) it asserts material factual

statements that are false.
Frivolous conduct shall include the
making of a frivolous motion for
costs or sanctions under this
section.
203
Who owns the fee

awarded?
Client?
Lawyer?
204
Astrue, SS Commr v. Ratliff (8th

Cir. 2008)
Attorneys fees awarded under

the EAJA are awarded to the
prevailing parties attorneys,
rather than to the parties
themselves.
Argued in SCOTUS 2/22/2010

205
Astrue v. Ratliff, 8th Cir.
The prevailing party is only

nominally the person who
receives the award
The real party in interest vis-vis attorneys fees awarded

under the statute are the
attorneys themselves.
206
Astrue v. Ratliff, 8 Cir.

th
EAJA fee awards become the

property of the prevailing partys
attorney when assessed and may not
be used to offset the claimants debt
to the United States
Are there policy considerations
that support the 8th Circuit view?
207
Astrue v. Ratliff Supreme Court

(2010)
Section 204(d) of the Equal Access to

Justice Act (EAJA), 28 U. S. C.
2412(d), provides: a court shall
award to a prevailing party . . . fees
and other expenses . . . in any civil
action . . . brought by or against the
United States . . . unless the court
finds that the position of the United
States was substantially justified.
208
Astrue v. Ratliff Supreme Court

(2010) The fee belongs to the client
We hold that a 2412(d) fees

award is payable to the litigant
and is therefore subject to a
Government offset to satisfy a
pre-existing debt that the
litigant owes the United States.
209
The Fee Belongs to the Client

Rendine v. Pantzer
Terms per retainer agreement:
50% of Baumgart and associate's then current rate
Plus 25% of recovery net of expenses
(or fees awarded by court)
Adjusted gross recovery (subject to fees)$935,000.00
Fees per retainer agreement

Rate: $68.75/hour (blended)
646.65 hours @68.75) $44,457.19
25% of net recovery $233,750.00
Total fee due to attorneys for plaintiffs per agreement
$278,207.19
Payable by plaintiffs 100%
210
Effect of fee shift by trial court

Lodestar hourly sought - and accepted by trial court
$176.81
100% enhancement of lodestar rate per trial court
$176.81
Enhanced hourly rate per trial court $353.62
Payable by Pantzer
$228,668.37
Counsel fees payable by plaintiffs $49,538.81
Effect of N.J. Supreme Court ruling

1/3 enhancement of lodestar hourly rate per Supreme
Court $235.75
646.65 hours @ 1/3 enhanced rate
Shifted fee set by N.J. Supreme Court
Payable by Pantzer
$152,445.58
Net payable by plaintiffs (after offset of Pantzer share)
$125,761.61
211
Quantum meruit
Non-contractual basis for recovery of

fees
212
Quantum Meruit -Non-contractual basis of fees
Quantum meruit is the wellestablished principle that the law

implies a promise to pay for services
performed under circumstances
disclosing that they were not
gratuitously rendered.
Strong v. Beydoun, 2008 Cal. App. LEXIS

1445 (Cal. App. 4th Dist. Sept. 19, 2008)
213
[A] party need not prove the

existence of a contract, but it
must show the circumstances
were such that the services
were rendered under some
understanding or expectation of
both parties that compensation
therefor was to be made.
214
Strong agreed with Sujanen to work on

a case and to divide counsel fees in an
agreed percentage
Sujanen promised to but did not obtain

client approval of fee division.
Sujanen fired Strong and collected all

fees including Strongs $75,000 share
Clients knew Strong was working on the

case.
Strong sued the clients when Sujanen

refused to pay her.
215
A) Strong should get nothing from

Sujanen
B) Strong should recover from the
clients who knew she wasnt working
for free
C) Strong should get nothing from
clients who did not hire her
D) Strong and Sujanen should both
be referred to the ethics committee
for entering an illegal contract
216
Allowing an attorney to recover

the reasonable value of his or
her services from a client is
premised on the services being
requested by the client.
217
Held:
Agreement unenforceable against

clients who did not consent to it
No quantum meruit recovery against

clients because no services were
performed at their request
Only remedy is against attorney Sujanen
218
Attorneys fees as a sanction
Award of reasonable attorneys

fees to a party harmed by
litigation misconduct
219
FRCP 11
b) Representations to the Court.

By presenting to the court a
pleading, written motion, or
other paper whether by
signing, filing, submitting, or
later advocating it an attorney
or unrepresented party certifies
that to the best of the person's
knowledge, information, and
belief, formed after an inquiry
reasonable under the
220
FRCP 11
(1) it is not being presented for

any improper purpose, such as
to harass, cause unnecessary
delay, or needlessly increase the
cost of litigation
221
FRCP 11
(2) the claims, defenses, and

other legal contentions are
warranted by existing law or by
a nonfrivolous argument for
extending, modifying, or
reversing existing law or for
establishing new law
222
FRCP 11
(3) the factual contentions have

evidentiary support or, if
specifically so identified, will
likely have evidentiary support
after a reasonable opportunity
for further investigation or
discovery; and
223
FRCP 11
(4) the denials of factual

contentions are warranted on
the evidence or, if specifically so
identified, are reasonably based
on belief or a lack of information.
224
FRCP 11 (c) (1)Sanctions
If, after notice and a reasonable

opportunity to respond, the
court determines that Rule 11(b)
has been violated, the court may
impose an appropriate sanction
on any attorney, law firm, or
party that violated the rule or is
responsible for the violation.
225
FRCP 11 (c) (1)Sanctions
Absent exceptional
circumstances, a law firm must
be held jointly responsible for a
violation committed by its
partner, associate, or employee.
226
FRCP 11
(4) Nature of a Sanction.

A sanction imposed under this
rule must be limited to what
suffices to deter repetition of the
conduct or comparable conduct
by others similarly situated.
227
FRCP 11
The sanction may include

nonmonetary directives
an order to pay a penalty into
court
an order directing payment to
the movant of part or all of the
reasonable attorney's fees and
other expenses directly resulting
from the violation.
228
Rule 11 FRCP - sanctions
As to Any paper a lawyer signs or

advocates for the attorney certifies
factual contentions have (or will
have) evidentiary support
denials of factual contentions are
warranted on the evidence or are
reasonably based on belief or a lack
of information
229
28 USC 1927. Counsels liability for

excessive costs
Any attorney ..who so multiplies

the proceedings in any case
unreasonably and vexatiously
may be required by the court to
satisfy personally the excess
costs, expenses, and attorneys
fees reasonably incurred
because of such conduct.
230
Truthfulness and candor
231
R. 7.1 Communications
A lawyer shall not make a false

or misleading communication
about the lawyer or the lawyer's
services.
232
R. 7.1 Communications
A false or misleading
communication
contains a material
misrepresentation of fact or law
omits a fact necessary to make
the statement considered as a
whole not materially misleading.
233
Fee Arbitration - NY
R.1.5
(f) Where applicable, a lawyer shall
resolve fee disputes
by arbitration
at the election of the client
via a court-approved program
[22 NYCRR 1230.1]
234
Resolving disputes with clients
Litigation
Fee arbitration/mediation
http://www.courts.state.ny.us/admin/feedispute/in
dex.shtml
235
Special Provisions in Domestic

Relations Cases
236
NY Domestic Relations cases

REQUIREMENTS
R. 1.5 (5)
no fees contingent upon

divorce
child custody or visitation
amount of maintenance, support,
equitable distribution, or
property settlement
237

Statement of rights and responsibilities
R. 1.5 (5) (e)
Lawyer shall provide a prospective

client statement of client's rights and
responsibilities
at the initial conference and
prior to the signing of a written
retainer agreement
238

Writing Requirement
R. 1.5 (5)
Written retainer agreement
signed by lawyer and client
stating in plain language the nature
of the relationship and
details of the fee arrangement
Minimum non-refundable fee is

permitted
239
NEW YORK CODES, RULES AND

REGULATIONS
Supreme Court Procedures for

Attorneys in Domestic Relations
Matters
22 NYCRR 1400.1
New York State Unified Court System
Matrimonial Matters Index page
http://www.courts.state.ny.us/ip/matr
imonial-matters/faqs.shtml
240

Fees & Billing - Chapter 3 Professional Responsibility - A Contemporary Approach (Pearce, Et Al.)

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Fees & Billing - Chapter 3 Professional Responsibility - A Contemporary Approach (Pearce, Et Al.)

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Chapter 3 Finding and Billing Clients

Part 2 Fees & Billing

Ch. 3 fees and billing

New York Code of Professional Responsibility

The continued existence of a free

ETHICAL CONSIDERATIONS EC 2-1

The need of members of the public

ETHICAL CONSIDERATIONS EC 2-1

The legal profession should

Ch. 3 fees and billing

New York Code of Professional Responsibility

A Lawyer Should Assist The Legal

Ch. 3 fees and billing

Financing legal representation

Direct government funding

Interest on Lawyers Trust Accounts

Rule of thumb: if administrative

The current crisis in the Legal

M.R. 6.1 Voluntary Pro Bono

Every lawyer has a professional

A lawyer should aspire to render

Ch. 3 fees and billing

Rule 6.1 Voluntary Pro Bono

Rule 6.1 (b) Additional Services

(1) delivery of legal services at no fee or

(2) delivery of legal services at a

Rule 6.1 Voluntary Pro Bono

(3) participation in activities for

Rule 6.2 Accepting Appointments

A lawyer shall not seek to avoid

Ch. 3 fees and billing

The right to counsel

The right to counsel may well be the

COMMISSION ON THE FUTURE OF

FINAL REPORT TO THE CHIEF JUDGE

(a) excessive caseloads

Ch. 3 fees and billing

Who can afford a

Ch. 3 fees and billing

Maids and housekeeping workers

Median hourly wage

Median annual earnings

Ch. 3 fees and billing

Food Prep and Serving Workers

Mean annual wage

Ch. 3 fees and billing

Family & general practitioners

The end of the Guild

Ch. 3 fees and billing

The Lot of Lawyers

Ch. 3 fees and billing

About 27 percent of lawyers are selfemployed, either as partners in law firms

Ch. 3 fees and billing

Lawyers mean earnings

Local Government Hourly: $44.34

Some data on Lawyers income

California Hourly $74.87

New York Hourly $72.36

Florida Hourly $56.75 Annual $118,040

Texas Hourly $61.85 Annual $128,650

Some data on Lawyers income

California Hourly $74.87

New York Hourly $73.79