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Attorney v. Client Fee Disputes
The State Bar of Nevada Fee Dispute Committee offers a free mediation and arbitration service to handle fee disputes between clients and attorneys. Because this service is free and is set up to allow individuals to represent themselves we refer most callers with complaints about attorney fees to the State Bar. We urge you to visit their website at http://www.nvbar.org/ if you have a fee dispute with a Nevada attorney. However, there have been some complaints about how long this process can take.
If you have a fee dispute with an attorney and we feel your case has merit and you will pay us an hourly rate and will give us an upfront retainer fee, we will represent you. We do not take such cases on a contingency fee basis if the claim is for money owed to the attorney and not in possession of the attorney. But if the disputed fee is held by the attorney, we will consider taking such a dispute on a contingency fee basis.
We have recently taken two such cases involving money allegedly owed to a lawyer and not in the lawyer's possession. In one case an attorney attempted to put an attorney's lien on real estate that was the subject of litigation. We successfully asked the judge to refer the fee dispute to the State Bar Fee Dispute Committee. The judge agreed, although once the case was in court the judge had discretion to decide the fee dispute.
In another case the attorney sued his client for more than $40,000 for fees allegedly owed. We agreed to defend the client. In this case both sides agreed to binding arbitration before the the State Bar Fee Dispute Committee and the client decided to have us continue to represent him in that arbitration. After the arbitration was delayed once and then set for hearing, the case settled for a large discount to the amount of fees sued upon.
We also get inquiries from clients who believe that their lawyer withheld too much money from their settlement or improperly calculated the lawyer's fee causing too much money to be taken out of the settlement for the lawyer's fee. These cases come down to different fact situations:
- The client and lawyer haven't sat down to talk about the issue. In such a case we recommend the client pursue the conversation with the lawyer.
- The lawyer never responds to the client's request for a meeting and explanation and the client has given the lawyer a fair chance to do so. In such cases the client's obvious free option is to file a complaint with the Nevada Bar. That will certainly get the attention of a lawyer who has been ignoring their client. But, this option may take some time. Alternatively, the client could also file a fee dispute with the Bar's Fee Dispute Committee at no cost to the client. Again, this will take some time.
- The client may want to hire us immediately. We will consider that after advising the client of their free options of filing a fee dispute with the Bar's fee dispute committee or filing a Bar Complaint and encouraging the client to first seek a face to face meeting with the attorney they are unhappy with. In one case involving a TV advertising personal injury lawyer, the lawyer had made a math error (in his favor) in calculating his fee. The client had on numerous occasions tried to contact the lawyer about this error but was always rebuffed. Naturally, as soon as we got involved, the lawyer immediately admitted the error and gave the client a refund. Sadly, there are some bad apple lawyers out there who think it is okay to abuse clients.
What are Good Grounds to Dispute a Fee?
The following are potential problems for lawyers defending their claimed fees:
- Is there a written fee agreement? If not, why not. Nevada, like many other states, requires a written fee agreement in certain cases such as contingent fee agreements (Nevada Rule of Professional Conduct 1.5(c). But, judges and fee dispute arbitrators expect all fee agreements to be in writing and are likely as a matter of policy to give the benefit of the doubt to the client if the fee was not in writing.
- Sometimes a lawyer will let a fee, say an hourly fee that is billed monthly (and supposed to be paid monthly), run up to a very large amount before attempting aggressive collection. This is a bad practice that in some circumstance will damage the lawyer's chance of collecting the fee, although the circumstances are all controlling. In one case the client testified that the lawyer told him, "Let's go on with this [hourly fee] case. You can pay me what you think my services are worth at the end." There was no written fee agreement, but there were monthly statements. When the case was lost, the attorney sued the client for tens of thousand of dollars in unpaid fees. A check of the Clark County District Court's website showed that this attorney had a habit of suing clients for large sums. These facts led credence to the client's claim that the lawyer was "predatory." However, in other circumstance a lawyer's patience in waiting to be paid may reflect well on the lawyer, not poorly. Many divorce lawyers get "sucked into" continuing to represent their client with a hard luck story after the initial retainer is used up and additional bills have not been paid.
- If the lawyer wants to revise the fee upward during the course of representation this is a troublesome issue. It is not uncommon for a law firm to send out a letter to its hourly clients in January that the firm is raising hourly rates for the new year. Or a lawyer may feel his or her practice is picking up and the lawyer can afford to be more selective and increase his or her hourly rate. I recommend that a client signing an hourly retainer agreement get a promise in writing that the lawyer will not raise the hourly fee on the client for the matter the lawyer is being hired for. (Of course, if the lawyer wants to charge more for a new matter that's ok because the client and lawyer aren't tied to each other on the new matter.)