1.5: Fees

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Questions and Answers

What are the factors to consider in determining the reasonableness of a lawyer's fee?

The size of the law firm, the lawyer's preferred brand of coffee, and the number of years the lawyer has been practicing.

The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly. (correct)

The lawyer's personal expenses, the amount of paperwork involved, and the location of the law office.

The lawyer's vacation time, the length of the professional relationship with the client, and the number of other clients the lawyer has.

What should a lawyer communicate to the client regarding fees and expenses?

The cost of office supplies, the lawyer's personal expenses, and the lawyer's favorite legal cases.

The client's personal matters, the lawyer's vacation plans, and the lawyer's favorite hobbies.

The number of employees in the law firm, the lawyer's mode of transportation, and the latest technology in legal services.

The scope of representation and the basis or rate of the fee and expenses. (correct)

Who should be aware of whether accepting a particular employment will preclude other employment by the lawyer?

The client (correct)

The lawyer's colleagues

The lawyer's family

The judge presiding over a case

In determining a lawyer's fee, why is it important to consider the fee customarily charged in the locality for similar legal services?

To ensure the fee is within a reasonable range compared to local standards Signup and view all the answers

What should a lawyer communicate to a client about any changes in fees or expenses?

Any changes in basis or rate of fee or expenses. Signup and view all the answers

Why is it essential to communicate the fee basis or rate to the client before or within a reasonable time after starting representation?

To prevent misunderstandings and establish transparency about costs. Signup and view all the answers

What type of fee arrangement is prohibited for lawyers in domestic relations matters?

Contingent fee arrangement based on the amount of alimony Signup and view all the answers

When can lawyers divide a fee according to the text?

Based on the proportion of services they render Signup and view all the answers

What must be confirmed in writing in a division of fee between lawyers?

The share that each lawyer is to receive Signup and view all the answers

What should a lawyer do if disputes over fees arise?

Comply with the established resolution procedure Signup and view all the answers

In what kind of matter is a division of fee typically used?

Contingent fee cases Signup and view all the answers

What type of property may a lawyer accept in payment for services?

Ownership interest in an enterprise Signup and view all the answers

When can a lawyer charge a contingent fee in a domestic relations matter?

'Sometimes', depending on the situation Signup and view all the answers

What does a lawyer need to consider before referring a matter to another lawyer?

Rule 1.1 Signup and view all the answers

Which scenario would be considered unethical according to Rule 1.8 (i)?

Entering into an agreement where services are provided up to a stated amount without informing the client of possible additional needs. Signup and view all the answers

Why does Rule 1.8 (a) apply to fees paid in property instead of money?

To prevent lawyers from exploiting clients through fee arrangements. Signup and view all the answers

What is required for a contingent fee agreement to be valid?

It must be in writing and signed by the client. Signup and view all the answers

What expenses must be clearly communicated to the client in a contingent fee agreement?

Expenses that are deductible from the recovery Signup and view all the answers

What is a restriction on contingent fees in criminal cases?

Lawyers cannot charge a contingent fee for representing a defendant in a criminal case. Signup and view all the answers

What does Rule 1.5(a) require regarding lawyer fees?

Fees charged should be reasonable under the circumstances. Signup and view all the answers

In a new client-lawyer relationship, how should fees and expenses be handled according to the text?

Should be promptly established and understood by both parties. Signup and view all the answers

Why are written statements concerning engagement terms recommended?

To reduce the possibility of misunderstanding between lawyer and client. Signup and view all the answers

When can a lawyer seek reimbursement for in-house services performed?

By charging an amount agreed upon with the client in advance. Signup and view all the answers

How should a lawyer handle advance payments of fees according to Rule 1.16(d)?

The lawyer should return any unearned portion of advance payments. Signup and view all the answers

What factors should a lawyer consider when determining if a particular contingent fee is reasonable?

The factors specified in Rule 1.5(a) paragraph (1) through (8) Signup and view all the answers

Study Notes

Contingent Fees

A contingent fee may be charged except in matters where it is prohibited by law or paragraph (d).
A contingent fee agreement must be in writing, signed by the client, and state the method of fee determination, including percentages and expenses.
The agreement must notify the client of any expenses they will be liable for, regardless of the outcome.

Reasonableness of Fees and Expenses

A lawyer must charge fees and expenses that are reasonable under the circumstances.
Factors to consider when determining reasonableness include:
- Time and labor required
- Novelty and difficulty of the questions involved
- Skill required to perform the service
- Likelihood of precluding other employment
- Fee customarily charged in the locality
- Amount involved and results obtained
- Time limitations imposed by the client or circumstances
- Nature and length of the professional relationship
- Experience, reputation, and ability of the lawyer
- Whether the fee is fixed or contingent

Basis or Rate of Fee

A lawyer must establish an understanding with the client regarding the basis or rate of the fee and expenses.
This understanding should be promptly established in new client relationships.
A written statement concerning the terms of the engagement reduces the possibility of misunderstanding.

Terms of Payment

A lawyer may require advance payment of a fee, but must return any unearned portion.
A lawyer may accept property in payment for services, but this may be subject to Rule 1.8(a) requirements.
An agreement may not be made whose terms might induce the lawyer to improperly curtail services or perform them in a way contrary to the client's interest.

Prohibited Contingent Fees

A lawyer may not charge a contingent fee in a domestic relations matter when payment is contingent upon the securing of a divorce or upon the amount of alimony or support or property settlement.
This provision does not preclude a contract for a contingent fee for legal representation in connection with the recovery of post-judgment balances due under support, alimony or other financial orders.

Division of Fee

A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm.
The division of fee must be in proportion to the services performed or based on joint responsibility for the representation.
The client must agree to the arrangement, including the share each lawyer will receive, and the agreement must be confirmed in writing.
Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership.

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Description

Test your knowledge on legal ethics by exploring the factors to be considered in determining the reasonableness of a fee for legal services. Learn about the importance of time, labor, skill, and other key considerations in fee agreements.