Attorneys have an ethical and legal duty to clients to abide by the codified rules of professional standards and criminal and civil laws. They also have a duty of care that means exercising the skills and knowledge reasonably expected of attorneys. One of those duties is adhering to the retainer agreement executed between the attorney and client.
A retainer agreement will establish the attorney-client relationship wherein the attorney agrees to represent the client in a particular legal matter in return for compensation. Some matters, such as personal injury claims, are taken on a contingency basis where the attorney is only paid legal fees if the case settles for or results in compensation for the client by a court or jury verdict. Others, though, require the client to pay an upfront fee that represents the expected amount the case will cost, including the number of anticipated hours and the hourly rate of pay. Pay rates vary depending on whether a partner or associate is billing the client or whether a legal assistant or paralegal is performing the work, which can be substantially less than the attorney’s hourly rate.
Attorney expenses are also included in the retainer agreement, which the client is expected to pay, such as court costs for filing a complaint, serving parties with a complaint or witnesses with a subpoena, deposition costs, expert witness fees, printing and postage, transportation, hotel accommodations, and meals.
When a Retainer Violation May Constitute Legal Malpractice
There are several ways that a retainer violation is an ethical violation and can form the basis for a legal malpractice claim:
- Commingling of Client Funds
All retainer fees paid by the client are to be deposited in the attorney’s trust account, which is separate from the attorney’s or law firm’s business account or personal accounts. These fees cannot be commingled with other accounts, or the attorney faces disciplinary action by the state bar association and a possible malpractice claim by the client whose funds were taken.
Attorneys are expected to account for each billable hour and to send at least monthly statements to clients who have paid a retainer fee detailing the hours spent by the attorney or other staff and the rate charged.
- Refusing Continued Representation for Unpaid Legal Fees
Attorneys often advise a client that no further work can be performed on the case if the initial retainer fee has been exhausted and until further fees are paid. However, attorneys can find themselves in jeopardy with the court if they refuse to continue work on a client’s case because of unpaid fees. This is primarily because an attorney has a fiduciary duty towards the client to act in the client’s best interests. Refusing further work may violate that duty.
An attorney may refuse to continue work under certain conditions and not be in violation of the retainer agreement:
- If no formal working agreement or retainer exists, then the attorney may refuse to work on the matter
- If the attorney has not been paid for work already performed, especially if fees and expenses have been advanced by the attorney
- There are fundamental differences between the client and attorney in how the case is being handled and where the attorney feels that further work on the case will not be in the client’s best interests
- Further work on the case would be unethical if the client had asked the attorney to commit an illegal or unethical act or was engaged in a continuing criminal enterprise.
- There is a conflict of interest where the attorney once represented an opposing party or client, or further representation may compromise the client’s or the attorney’s interests.
- The attorney becomes incapacitated or is otherwise incapable of continuing the representation
In cases where your retainer fee has been exhausted, your attorney generally cannot simply refuse to represent you further by not continuing discovery, responding to the opposing party, not appearing in court, or adhering to court and other deadlines. For example, suppose your attorney has neglected to file your claim in court before the statute of limitations expired or your case is dismissed for not appearing or not complying with court rules. In that case, you will likely have a valid legal malpractice claim.
- Excessive Fees or Work Not Performed
Some attorneys take advantage of clients by charging excessive fees for simple tasks or work that a paralegal or legal assistant could have performed. For instance, they may charge hundreds of dollars for a form letter or email or for one only a few sentences long. Simple research on a matter that only took a few minutes may be billed for several hours of work.
Your attorney may have charged you for 5-star hotel stays, first-class airline flights, or high-class meals costing hundreds of dollars or more where legal strategies were allegedly discussed. Unless you specifically agreed to such extravagance in your retainer fee, you should certainly dispute these costs.
At times, attorneys will charge for services not performed, including research, meeting with witnesses or experts, and other services that an attorney might be expected to do but which were never made.
Steps to Take in Retainer Violation Matters
If you suspect that you were overcharged for fees, are being threatened by your attorney to pay further fees or are not accounting for how retainer fees were or are being spent, schedule a meeting with your attorney to discuss the matter. Many disputes can be resolved by having the attorney present you with an itemized statement, by compromising on certain fees, or by agreeing to a payment plan to continue further work.
However, if your attorney is not responsive or you are dissatisfied with the attorney’s explanations, you may contact your local bar association. This can often cause the attorney to explain his conduct or face disciplinary action.
But if funds were mishandled or commingled, the billing practices were unethical, your attorney refused to further represent you unless you immediately paid further fees, or you are being charged excessive sums for services performed or for services not performed, you could have a legal malpractice claim. This is especially true if the attorney’s actions in your case violated your best interests and led to an adverse outcome.
Consult a Legal Malpractice Attorney from Burns and Jain
Do not hesitate to contact a legal malpractice attorney from Burns and Jain if your attorney refuses to account for how your retainer fees were spent, is charging unreasonable fees or costs, or refuses further work on your case for unpaid fees. You may have a valid malpractice case that can compensate you for your losses.