CHAPTER 1 - 1-6 FEES
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1-6 Fees
1-6:1 General Rules
Any fee charged by a lawyer must be reasonable.112 Factors to be used to determine whether the fee is reasonable include time, labor, novelty of the issue, and skill requisite to perform,113 the fact that the matter may preclude the lawyer from taking other work,114 fees customarily charged in the locality,115 amount involved and results obtained,116 time limitations imposed by the client117 nature and length of the professional relationship with the client,118 the experience, reputation and ability of the lawyer performing the service,119 and whether the fee is fixed or contingent.120 The evaluative factors found in Rule 1.5(a) are not exclusive.121
In determining a reasonable and appropriate fee, Connecticut courts have adopted the twelve factors set forth in Johnson v. Georgia Highway Express, Inc.122 The Johnson factors are (1) the time and labor required, (2) the novelty and difficulty of the questions, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee for similar work in the community, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the undesirability of the case, (11) the nature and length of the professional relationship with the client and (12) awards in similar cases.123 Though cases citing and employing the Johnson v. Georgia Highway Express, Inc. test are fee award cases, and not disciplinary matters, these cases are very useful to discern how courts view reasonableness in the context of fee disputes, especially in view of the fact that the Rule 1.5(a) factors are not exclusive.
1-6:1.1 Fee Letters
Except where the lawyer is charging a regularly represented client on the same basis or rate, all fee arrangements must be communicated to the client in writing before or within a reasonable time after commencing the representation.124 Note that Connecticut's rule in this regard is different from Model Rule 1.5(b) which, while requiring communication of the fee arrangement, does not require it to be written.125 The commentary to Connecticut's Rule 1.5 also provides that a reasonable time for communicating fee information is no more than 10 days after the commencement of representation. The Statewide Grievance Committee requires a fee letter even where no fee is being charged.126 An oral fee agreement may be enforced except in contingent fee matters.127
Fee communications must include the scope of representation, the basis or rate of the fee and expenses for which the client will be responsible.128 If a fee is to be shared by several lawyers not in the same firm, this information should be in the fee letter.129 Changes in the basis or rate of fees or expenses must be communicated in writing before they are billed at a higher rate.130
While lawyers often refer to fee letters as "retainers" this term is a misnomer. Retainers are either an advance deposit towards fees or a contractual agreement that the lawyer will be available when the client needs her. Thus, the authors prefer the term "fee letter" as it more accurately describes the requisite communication.131
Unlike contingent fee contracts discussed below, which must be signed by the client, a fee letter only must contain the required information (scope of work, rate or basis of fee and responsibility for expenses) and be transmitted at the beginning or within 10 days of the commencement of the representation.
Good business practice suggests including other information in the fee letter, including how and when bills will be sent, payment terms and discounts, interest on arrears, liability for fees and expenses in collection, alternative dispute resolution mechanisms, withdrawal for unpaid bills, costs, and attorneys' fees in case of collection and other such clauses ordinarily found in a good contract. Many lawyers now include arbitration clauses concerning disputes in their fee letters. This has saved much time and money, in cases big and small. Though the rule does not require the fee letter to be signed, good practice suggests that client signatures be obtained or some confirmation of receipt or agreement be sent.
Two types of circumstances consistently result in lawyer discipline complaints involving fee letters. One class of offenders labor under the misimpression that fee letters are optional, or are not required for existing clients. These provisions, though once in the rule, have been gone for over 20 years.132 While one would think that this problem would be self-limiting as the senior members of the bar either get reeducated or leave the practice, an issue may be that Connecticut's rule differs from the model rules in the requirement of a mandatory letter, and most law schools' ethics courses teach the model rules and not Connecticut-specific rules.
The other group of offenders are busy lawyers in high-volume, low dollar enterprises such as Part B criminal representation. The lawyer meeting his client at the courthouse for a quick discussion with the state's attorney and a "one and done" type of representation often will not bother to send a fee letter. Later, when questions are asked about the representation, the only disciplinary charge attaching to an otherwise adequate representation is that there was no fee letter.133
All of this could be avoided if the lawyer had in his briefcase a simple form letter containing a few blanks into which basic information (name of client, scope of representation, fee charged, and responsibility for expenses) can be easily be filled in by hand. The use of carbonized paper would result in a permanent record to protect the lawyer from a later claim, and the whole transaction could be accomplished in a minute or two.
Just how complex, detailed and involved a fee letter must be to satisfy the ethical rule is a matter of some disagreement. Though Rule 1.5(b) sets minimum standards for content, it does not deal with form. In one matter, a lawyer claimed, to no avail, that a receipt that showed what had been paid for and what work to be done was sufficient as a fee agreement. Both the Statewide Grievance Committee and a judge on appeal felt that it was not.134 Yet, in another case, the Grievance Committee felt that a document titled "Estimated Due Diligence and Pre Closing Budget" was sufficient to satisfy the requirement of a written fee letter.135
The first communication a lawyer receives about a grievance having been filed will ask the lawyer to append a copy of the fee agreement to his answer. That is because, though several decades have passed since fee letters became mandatory, the rule is often ignored. Mercifully, Disciplinary Counsel will often recommend dismissal of a case where the only sin is the lack of a fee agreement on a promise that the lawyer has now made it a practice to use fee letters in all cases. But even this disposition results in a visit to the courthouse and time spent before the grievance committee. Compliance with the rule in the first instance is the better choice.
Disputes over fees, either between lawyer and client or lawyer and successor lawyer, are dealt with in detail in Section 1-6:3 infra and in Chapter 11, Fee Disputes. Much time spent arbitrating, litigating, or resolving fee disputes might be avoided by a well-crafted fee letter in the first instance.136
1-6:2 Special Rules
1-6:2.1 Contingent Fees
Contingent fee agreements must contain information as to how the contingent fee is computed and must be signed by the client.137 Contingent fees related to personal injury, wrongful death and damage to property are subject to statutory limits.138 The limits may be waived, but only in accordance with the procedure found in the statute.139 Failure to comply with the statute may make a contingent fee agreement unenforceable and cause a forfeiture of any fees for the work, including any claims for quantum meruit.140
Contingent fees are not allowed in criminal or family matters.141 In criminal cases, the conflict inherent when an attorney's fee is conditioned upon a result is too great to allow such a fee arrangement. For example, an attorney who will be paid only upon an acquittal or who will receive a much better fee if no charges are proved has a disincentive to seek or counsel a client to accept a reasonable offer which, though involving an admission of culpability, may result in little or no jail time.
In family matters, the prohibition on contingent fees arises out of a concern that such a financial incentive might encourage lawyers to promote discord, dissolutions, and divorce.142 Bonus or alternative fee arrangement are allowed in family cases as long as they do not operate as contingent fees.143 Contingent fees may be charged to collect delinquent child support or alimony payments, as these sums have already been established and the fee arrangement will not promote discord but simply enables a person to collect something which they might not have the economic wherewithal to do otherwise.
1-6:2.2 Nonrefundable Retainers or Advanced Fees
"Lawyers in Connecticut should approach the concept of 'nonrefundability' of retainers or advances with considerable caution. The concept of 'nonrefundability' is as slippery as a watermelon seed."144 An advanced legal fee cannot be nonrefundable and cannot be considered "earned upon receipt."145 Absent a written agreement otherwise, advanced fees must be kept in the lawyer's clients' funds account and drawn down as earned.146 If the...
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