Avoiding Attorney’s Fee Disputes

As chairman of the Denver Bar Association Legal Fee Arbitration Committee, I was asked to itemize steps which could be taken to avoid disputes between attorneys and their clients. The following list resulted:

1. Clients should be selective in choosing an attorney. They should not hesitate to interview several, asking pertinent questions concerning prior experience in similar matters, requesting references from among other clients, questioning the scope of legal knowledge of the particular subject matter involved, the attorney’s acquaintance with the opposing or other party’s attorney and similar questions tending to determine the attorney’s capability and whether the client would be able to work with that particular attorney.
2. Attorneys should be selective in undertaking work for particular clients and as to specific cases. Inquiry should be made of whether the client had previously used other attorneys and, if so, why those relationships had been severed. Also, the attorney should pointedly inquire into the client’s ability to pay the fees likely to be incurred in connection with the engagement.
3. Fee arrangements should be thoroughly discussed, and alternatives between hourly rates, fixed fee or contingent fee arrangements should be considered. If estimated fees are discussed, they should clearly be identified as estimates, preferably in terms of ranges rather than a fixed amount. Time for payment should also be discussed.
4. The fee arrangement should be reduced to writing in clear language and signed by both the attorney and client. In Colorado, contingent fee agreements must be written, signed by the parties and must contain certain terms dictated by a Colorado Supreme Court rule.
5. The attorney should keep accurate time records. It is mandatory when the fee arrangement is on an hourly basis and a good idea even in contingent fee cases should a dispute arise.
6. Unless otherwise specifically agreed, the attorney should render periodic billings to the client. The billings should detail the services rendered.
7. The attorney should keep the client informed of the progress of the matter as currently as possible. The client should be given photocopies of all relevant correspondence, pleadings, hearing or trial notices and the like, so that he is fully informed of the progress.
8. Both the client and attorney should promptly notify the other in the event of any change in the circumstances of either. For example, if the attorney is turning over a substantial amount of the work on the matter to someone else in his law firm, the client should be advised and consulted. Similarly, if the client’s financial circumstances have changed or his determination to proceed with the matter has changed, he should promptly notify the attorney.
9. Both the attorney and client should not be embarrassed to candidly discuss either fees or any other matters relevant to their relationship with each other.
10. The attorney must promptly advise the client of any adverse ruling in the case or of any other circumstances which might have an adverse impact upon the client’s case.
11. In the event of a fee dispute, both the attorney and client should be willing to sit down with each other and try to resolve the dispute without resorting to adversary proceedings.
12. From the attorney’s standpoint, the likelihood of a fee dispute with his client is greatly reduced by his successfully handling the client’s matter. If he wins the case, he can usually expect to be paid without much argument. Lose and beware!