People in the U.S. spend over $100 billion in legal fees each year. Most of these legal fees are collected by ethical attorneys. Unfortunately, however, some lawyers take advantage of their clients by charging them more than what is warranted under the circumstances. A client who believes that his or her attorney’s legal fees are unreasonable may take legal action. Below are 7 things clients should know about legal fee disputes.
A retention letter or agreement can’t be used to justify an unreasonable legal fee
Lawyers often attempt to justify their fees by pointing to agreements they have with clients. Courts will enforce these types of agreements—but only if they are fairly negotiated and the fees are reasonable. If an agreement contains unreasonable fees or wasn’t negotiated in a fair manner, or if the bills by the attorneys are beyond the scope of the negotiated terms of the retainer agreement, the court may invalidate all or part of the agreement and return funds to the client.
Court have invalidated several common billing practices
Certain types of billing practices are more likely to be invalidated by courts than others. While this is obviously a case-sensitive situation, courts and fee arbitration panels have invalidated various types of improper billing practices when the circumstances warrant it. If the terms of an agreement between an attorney and client contains a disfavored billing practice, the court may invalidate it.
A lawyer can’t necessarily quit representing a client due to a legal fee dispute
Lawyers often threaten to withdraw from a case after a client misses a few payments. When this happens, the client usually either pays the lawyer what may be an unreasonable fee or spends additional money to hire a new lawyer to continue the case. However, another option available to the client in this situation is to state a written objection to the reasonableness of the fee, pay the portion of the fee that is reasonable, and request that the attorney continue with the representation. If the original fee was unreasonable, the attorney will be obligated to continue to represent the client.
Lawyers are limited in their legal fee collection methods
Attorneys are permitted to take certain steps to collect accounts receivable. However, lawyers have more limitations placed on their conduct in this area than other professionals. For example, attorneys cannot resort to “self-help” by taking actions that prejudice their own clients or place the attorneys in an impermissible conflict of interest between themselves and their clients. Therefore, if an attorney uses a prohibited method to collect a fee, the client may not have to pay it.
There is incentive for lawyers to avoid legal fee disputes
For attorneys, the stakes are high in legal fee disputes. An attorney’s professional judgment and reputation are called into question in every fee dispute case. Moreover, if an attorney acts improperly to extract a fee from a client, the attorney’s fee may be subject to forfeiture, either in whole in part. As a result, it is often in an attorney’s best interests to reach a compromise with a client rather than face the uncertainties of a legal fee case.
The client may be entitled to a refund
Fee disputes sometimes occur after a client has advanced money to an attorney in anticipation of the services to be provided or after full payment for legal services was already provided. In either situation, the client may be entitled to a refund if the attorney has charged an unreasonable fee.
Legal fee disputes often require new legal representation
Finally, if you are involved in a legal fee dispute with your attorney in New Jersey, you need an experienced Hackensack legal malpractice attorney on your side. At Rosenblatt Law, our experienced legal team will determine the best course of action based on the unique circumstances of your case and will work diligently to ensure that you receive a just outcome in your legal fee dispute. Please contact our office today to schedule a consultation.