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NEW FEE PROPOSALS CONFIRM: LAWYERS ARE ICKY

By Lisa Scott, Family Law Attorney
Bellevue, Washington

Well, it’s finally happened.  Due to the misdeeds of a few bad apples who took money from clients and ran off, or inconsiderately upped and died before the work was done, the RPC’s on retainers and advance fees are being revised.  The new fee rules were proposed by a task force called TARRTF, which apparently stands for:  Too bad, Attorneys are Rarely Responsible enough to be Trusted with Funds.  In conjunction with the new rules, new fee agreement provisions are being mandated, as part of the continuing “Micromanagement of Lawyers Campaign” by the Board of Governors (BOG); Motto: “How can we BOG down overworked attorneys this week?”  For example:

ATTORNEY agrees to represent CLIENT in [insert type of case here].  ATTORNEY is too tempted to run off to the Cayman Islands with the money, and cannot be trusted to deposit prepaid fees into ATTORNEY’S own account, so ATTORNEY must deposit said funds into ATTORNEY’S trust account.  ATTORNEY can only draw out funds as they are earned, but no more frequently than once per week, unless ATTORNEY needs to buy multiple daily lattes to help stay awake while working long hours on CLIENT’S case, or for gas money to drive to court every other day responding to opposing counsel’s frivolous motions. 

The proposed rules are inherently illogical:  you can charge an “availability retainer” and do nothing for your pay, but you can’t get paid first then do the work if it’s prepaid hourly fees.  Apparently the average lawyer can’t be trusted with advance fee payments, but the average contractor, landscaper or dentist can be.  What contractor will start a major remodel without an advance on fees?  And last time my dentist constructed a crown for me, he required an up-front fee payment because he can’t sell the crown to someone else if I fail to pay up after he’s put time and money into the custom work.   These business people do not maintain their customers’ money in trust accounts. 

I find it highly demeaning and insulting to be told, in essence, that I am too dishonest or incompetent to accept fees in advance of the work I have promised the client I will perform.

And what’s this deal about an availability retainer?  What client will pay an attorney to just sit around doing nothing?  Come to think of it, what a great idea.  But what if you’re not available when the client calls (because you’re on the beach in the Caymans).  Do you have to give them a refund? 

The proposed rules invite operation of the law of unintended consequences.  Hourly fees encourage the lawyer to do a thorough job for the client, because we know we will be paid for all our hard work.  Working off of a fixed or flat fee encourages lawyers to “phone it in” and minimize the time actually spent on the case.  While “access to justice” is a buzzword we are constantly admonished to consider, I can see no other alternative as a family law attorney than to raise my rates to cover the increased administrative costs associated with these convoluted rules.  The extra time necessary to deal with trust account deposits and accounting will take time away from the work my clients have hired me to do. 

While flat fee advances may be deposited in the attorney’s own account, if there is a dispute about the fees, a refund may be required.   If you take a flat fee and underestimate the time needed, too bad, you lose and must eat it, no matter how much more time you spent on the client’s case.  Therefore, it will become increasingly crucial for attorneys to accurately estimate the time needed for particular tasks involved in cases, and price them accordingly. 

As a family law attorney going on 20 years, I have handled hundreds of cases, both contested and uncontested, flat fee and hourly, many with prepaid retainers for the time estimated for the case or portions of the case.  I have never hesitated to refund the unused portion of an “earned upon receipt/non-refundable” retainer.  More often than not, in contested family law cases with hourly fees, once the initial retainer is exhausted, it is a matter of chasing after the fees already earned, not refunding unused ones. 

While the TARRTF rules are currently only proposals, their adoption may be a foregone conclusion.  It is therefore prudent for practitioners to be prepared for this sea change in our daily lives.  As an alternative, we can all just quit and go to work at Wal-Mart, or switch to a less stressful and demanding profession, say air-traffic control.  In order to head off such a stampede and assist lawyers in setting reasonable fixed fees for various services, I offer the following chart of services and suggested fees.  Each individual is of course encouraged to tailor the tasks and fees to his or her own unique situation.

FAMILY LAW ATTORNEY SCHEDULE OF SERVICES AND FEES

CAN THIS FREIGHT TRAIN BE STOPPED?

These rules are still only proposals at this point, and must be approved by the Washington State Supreme Court to be adopted.  Whether you are a lawyer who believes these rules micromanage you and interfere with your ability to practice law, or a client who feels these rules will interfere with your ability to agree on fee terms with your lawyer, please let your voice be heard.  You can send your comments, by regular mail or e-mail, with a copy of or link to this article, to: 

Clerk of the Supreme Court
P.O. Box 40929
Olympia, WA  98504-0929

By e-mail (limit 1500 words):

Camilla.Faulk@courts.wa.gov

Deadline for comments is April 30, 2008

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