Resolving Fee Disputes: It's in Your Best Interest, Too

Questions about the fee are proportional to the client's perception of the result achieved. To get out in front of this, as soon as a negative result is anticipated, the lawyer should make sure to inform the client, with the goal of managing the client's expectations and avoiding the surprise of an adverse outcome. Clients ambushed by a loss are even more likely to question the value of their lawyer's services.

Fee questions often become problematic in cases where a flat fee is involved. Flat fees have a certain market advantage both for the attorney and the client. A flat fee guarantees income to the attorney and caps the fee for the client, no matter if the matter takes longer than originally anticipated. Attorneys with experience can generally gauge the amount of time a particular matter will take, know what the local market with bear and charge accordingly. A client who questions a flat fee at the end of the representation may need to be reminded about the attorney's skill in the particular area, the amount of time and work necessary to achieve the result, and that the client had agreed to the fee at the outset of the representation.

If the lawyer in a flat fee case is discharged before the representation is complete, the lawyer will need to review the time spent on the file with the client to determine how much of any fee paid in advance has been earned. Any unearned fee will need to be refunded. It is a basic principle of legal ethics that lawyers may not keep fees they have not earned, thus the reason for the general rule against nonrefundable fees. As I explain to clients, Stop & Shop doesn't get to keep your money if you don't walk out with your groceries.

In anticipation of such a scenario, the fee agreement should provide some way of calculating the unearned fee if the relationship ends before the representation is completed. A wise lawyer deals with this up-front by having a clause in the fee agreement providing that, in the event of a premature termination, the amount of time spent on the file will be valued at a specific hourly rate with the balance of any fee paid in advance to be refunded. This, of course, requires the attorney to keep some track of the time spent on the file. I can hear the moaning and groaning now, but a rough record of time into the file will be worth its weight in gold if there is a fee dispute later.

If the dispute cannot be resolved, there are two options: buying peace by refunding some portion of the fee, even though it was earned, or by applying to the Connecticut Bar Association's fee dispute resolution program. This is a service of the CBA at no cost to either party. If buying peace is not an option, a preemptive strike by applying to this program may result in a resolution of the client's problems short of a grievance.

We should never underestimate the value to an unhappy client of the opportunity to tell their story to a third party. The lawyers who volunteer to assist the CBA with this program are good listeners.

The statewide grievance committee can summarily dismiss a grievance that is clearly only a fee dispute. Unfortunately, a client dissatisfied with the fee will usually find other faults, such as failure to answer phone calls, so grievances that are at their essence fee disputes often survive the summary dismissal screening.

In the end, a grievance may be inevitable. We know that there are a certain small percentage of clients who will never be happy. But an attorney who can file an answer showing a record of good-faith efforts to address the client's questions will be in a much-improved position with the local panel counsel. To this end, the lawyer should keep records of all attempts to address the client's concerns, such as appointments and phone calls, and preferably follow up with correspondence reviewing what was discussed.

Killing these clients with kindness is tough; it goes against our strongest urges to wring their necks, or inflict some other more grievous bodily harm. But lawyers who fail to respond to these clients with lingering questions and doubts may wind up unnecessarily on the receiving end of a grievance complaint, and it may be a self-inflicted wound.

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Patricia King, a former chief disciplinary counsel for Connecticut, is now with Geraghty & Bonnano in New London, CT. She can be reached at [email protected].