Section 13 Comments

• Library: Civil Trial Practice 2008 Supp Forms

COMMENTS I INTRODUCTION

Attached are sample lawyer-client fee agreements, drafted to comply with Rule 4-1.5 of the Rules of Professional Conduct under most circumstances.

The first two agreements are forms designed for use in non-contingent fee arrangements. They cover (1) litigation on an hourly basis, and (2) non-litigation on an hourly basis. The third form is for a contingency fee matter. Finally, there are "Other Clauses of Interest in Fee Agreements", which list optional clauses for specific circumstances.

II OVERVIEW

A. DISCLAIMER

Neither The Missouri Bar nor the Fee Dispute Resolution Committee makes any representations or warranties of any kind, express or implied, concerning the legal adequacy or enforceability of any of the accompanying forms or any part of them. Nothing in the "Comments" or in the forms shall be interpreted or construed as such a representation or warranty. The "Comments" and the forms are intended for use only by lawyers admitted to practice in Missouri, who are expected to utilize their own independent legal and business judgment when evaluating the forms and these comments.

B. INTENDED PURPOSE AND LIMITATIONS

The accompanying forms are samples only. They are not mandatory forms. They enjoy no preferred status. They create no minimum standards. They do not presume to address every setting in which the lawyer-client relationship arises, nor do they contain every term a fee agreement might include.

By enumerating certain charges and billing practices, it is not suggested that you must or should adopt them. It is simply to acknowledge that some lawyers follow them.

The agreements are in the format of a relatively formal agreement, while attempting to eliminate unnecessary "legalese." For those lawyers who prefer a more colloquial style, such as a letter-agreement, the language can be adapted to that format. Lawyers are encouraged to mold the samples to fit their needs.

C. SUMMARY OF ETHICAL RULE REQUIREMENTS

1. Non-Contingent Fee Agreements

In non-contingent matters, there is no specific requirement under the Rules of Professional Conduct that a fee agreement be in writing. However, it is highly recommended that lawyers reduce all fee arrangements to writing to avoid any misunderstanding. Supreme Court Rule 4-1.5(b) requires that when a lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation. The Comment to the rule cautions that in a new lawyer-client relationship, the fee must be promptly established.

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)] This would include providing sufficient information about the anticipated fees and costs so that the client can make an informed decision on how to proceed. Generally, it is desirable to furnish the client with at least a simple memorandum or copy of the lawyer's customary fee arrangements that states the general nature of the legal services to be provided, the basis, rate or total amount of the fee, and whether and to what extent the client will be responsible for any costs, expenses or disbursements in the course of the representation. A written statement concerning the terms of the engagement reduces the possibility of misunderstanding. [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 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 4-1.1relating 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 their duties or liability under the Rules of Professional Conduct in the fee agreement. For example, a lawyer could not undercut their responsibility to comply with the requirements of Rule 4-1.16 on terminating the lawyer client relationship, by stating in the fee agreement that he or she can withdraw from employment with or without cause at any time. This would be contrary to the rule requiring the lawyer to take steps reasonably practicable to protect a client's interest upon termination, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled, etc. [Rule 4-1.16(d)]

It is advisable to make provision for the terms of payment of the fee. (i.e. within specific time frames or within thirty days after billing) A lawyer may require advance payment, but is obliged to return any unearned portion in a prompt fashion.

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)]

2. Contingency Fee Agreements

A contingent fee must be in writing, signed by the client. A lawyer may enter into a contingent fee agreement with certain exceptions. [Rule 4-1.5(c)] The agreement shall state the method by which the fee is to be determined, including the percentage that shall accrue in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to...