Fee disputes can be destructive. Attorneys owe a fiduciary duty to put their clients’ interests ahead of their own. Attorneys often do difficult and stressful work, involving the application of advanced learning and skill, and have the right to be paid for their work. While a law license is not, to quote the California Supreme Court, a license “to mulct the unfortunate” attorneys deserve to be paid for their work. In California, an attorney cannot contract for, charge or collect an unconscionable or illegal fee.But that is not the only risk for attorneys. Clients who have fee disputes have the remedy of fee arbitration (Bus. & Prof. Code §§ 6200, et seq.) to ensure that the fees are reasonable. Failure to pay a fee arbitration award can now be sanctioned by the State Bar in an order placing the attorney on inactive status, unable to practice until the fee award is paid. Many State Bar complaints are triggered by fee disputes.
Fee arbitration has to be to be taken seriously. Failure to effective defend your fees in arbitration can lead not only to a judgment but a suspension of your law license!
For attorneys, properly drafted fee agreements that comply with the law are essential. This includes meticulous timekeeping in all cases, even for flat fee and contingent cases, as well as regular and informative billing practices. I can help you draft fee agreements that protect your right to fees and I can help you make sure your office procedures protect your right to fees.
Fees can be about more than just money. Attorneys need to think about fees unemotionally and make a sound business decision about the risks of pursuing collection action against a client (State Bar complaints, malpractice actions/cross-complaints, etc.) Fee arbitration is not free. While designed to be simple, it frequently involves legal issues involving the attorney-client fee agreement and a careful analysis of billing records to determine if it is likely to be successful for either party. Arbitration is mandatory for the attorney if the client requests it but it is not always the client’s best option. Reasonable compromise and settlement is frequently in everyone’s best interest. A consultation with counsel familiar with fee issues can help make that decision and avoid expense.