What You Need to Know About Attorney Fee Agreements
If a lawyer wants to take your money without providing you with a written Fee Agreement, there is good reason to be concerned.
The only reason a lawyer would not want to have a written Fee Agreement is so that they can take advantage of an unwitting client.
When hiring an attorney, it is imperative to have a written fee agreement. Criminal attorney fee agreements set out the services the attorney will perform for you and the type and amount of fees and costs you are obligated to pay for the services rendered.
When discussing fee agreements with an attorney, remember that many factors are considered when selecting the type and amount of the fees. These factors include the attorney’s experience and background and the required time and attention needed in your case. Therefore, fees vary from attorney to attorney.
Michigan Rule of Professional Conduct 1.5(b) states a strong preference by the State Bar of Michigan that Fee Agreements be in writing. However, this rule is not mandatory for criminal defense cases (non-contingent fee arrangements). Clients who fire their previous attorney regularly hire me. The most common problems in those situations are that there is no written fee agreement, and the lawyer and the client can’t agree on how the fees were structured, what was paid, or how much should be reimbursed. Almost all criminal defense attorneys in Michigan charge flat, non-refundable legal fees. Legal fee structures are more complex than you may think. A misunderstanding or miscommunication will invariably result in a fee dispute without a written Fee Agreement.
No written criminal attorney fee agreement? Time to find a new lawyer.
If you are going to hire a criminal defense attorney and they do not offer you a written fee agreement, leave immediately and seek out a more ethical lawyer. Reluctance to provide a written Fee Agreement is a sure sign that the lawyer may intend to take advantage of you or desire to keep you in the dark regarding the actual costs of the legal services. Some attorneys will try to get a client to agree to hire the lawyer without a written fee agreement and will only provide one if asked.
Frequently Asked Questions
What is a fee agreement?
A Fee Agreement or Retainer Agreement is a contract between a lawyer and a client. The Fee Agreement specifies the parameters of the work to be done on behalf of the client and the cost of the legal services. The Fee Agreement further specifies the cost of legal fees and how the lawyer earns the fees.
What percentage do most lawyers take as a contingency fee?
A lawyer in a criminal case is ethically prohibited from charging a contingency fee under the Michigan Rules of Professional Conduct. Specifically, the amount of legal fees cannot correspond to the case’s outcome in a criminal matter. For example, a criminal defense attorney cannot enter into a Fee Agreement with a client that provides for one fee to take the case and a second fee depending on whether the client is acquitted or the charges are dismissed.
What is the most a lawyer can charge?
Attorney fees in Michigan must not be excessive, meaning that the amount of the legal fees must not shock the conscience. A fee is clearly excessive when, after reviewing the facts, a lawyer of ordinary judgment would unequivocally conclude that the fee is far higher than a fair fee. The factors that determine if a fee is excessive include:
- the time required, the complexity of the case, and the skill necessary to perform the legal service;
- if apparent to the client, the need for the lawyer to give up other work, so they have enough time to dedicate to the case;
- the fee customarily charged in the locality for similar legal services by similarly experienced and skilled lawyers;
- the importance of the case and the results obtained;
- the time limitations imposed by the client or by the circumstances;
- if the lawyer has provided work for that client in the past; and
- the experience, reputation, and skill of the lawyer or lawyers performing the services.
What type of fee agreements must be in writing?
Michigan does not require written Fee Agreements; however, the State Bar of Michigan strongly encourages written Fee Agreements to ensure that the lawyer and the client clearly understand the legal fees charged and the scope of legal representation.
How are legal fees calculated?
Generally, fees are calculated in a criminal Fee Agreement based on the severity of the charge, the importance of the outcome, the experience and reputation of the lawyer, and the case’s complexity. A legal fee should be fair and affordable, yet accurately reflect the attorney’s experience, reputation, and skill.
What is the meaning of a retainer fee?
A retainer fee is similar to a down payment. A retainer payment is the first payment made on the total legal fees charged by the lawyer or law firm. For example, if the legal fee is $10,000.00 and the retainer is $5,000.00, the retainer fee must be paid upfront to start representation, and then the $5,000.00 balance would be due in an agreed upon time-frame.
What is an engagement fee?
An engagement fee is an amount paid when a client hires a lawyer that guarantees that the attorney will make themselves available to represent the client.
Should legal fee agreements be in writing?
Fee Agreements used to hire a lawyer should be in writing to protect the client and the attorney. A Fee Agreement should clearly specify the amount of legal fees to be charged and what services the lawyer will provide. A well-crafted, enforceable, and ethical Fee Agreement will plainly demonstrate the lawyer’s fees and the scope of their representation.
How do lawyers bill their clients?
The Fee Agreement should specify when and how the client must pay legal fees if a lawyer charges a flat fee. In many cases, the entire flat fee is paid to initiate representation, and there will be no future bills. If a retainer is paid and there is a balance due, it is helpful if the Fee Agreement specifically indicates when the lawyer expects to be paid the balance of the legal fees.
No Fee Agreement is a Red Flag
When a lawyer doesn’t want to put something in writing, it is a red flag. The only way to be assured that you and the lawyer have a clear meeting of the minds on legal fees and costs is if the agreement is in writing. Make sure you keep a copy of the fee agreement for your records.
Once your questions are answered, be certain you understand everything in the agreement before signing it – READ THE AGREEMENT! Again, if the lawyer rushes you or doesn’t seem to want you to look too closely at the contract, you have good reason to be concerned.
The attorneys with LEWIS & DICKSTEIN, P.L.L.C. always use written Fee Agreements, and we take the time to review the contracts with every prospective client. Our attorneys will not ask you to sign the Fee Agreement until you’ve expressed a good understanding of the document and all of your questions have been answered.
Call us today at (248) 263-6800 for a free consultation or complete a Request for Assistance Form. We will contact you promptly and find a way to help you.