While most all of my blog posts have been directed to the corporate world and to lawyers, I thought it about time to write something for those individuals who have incurred large legal bills. For, in addition to doing fee bill reviews for corporations and governmental entities, I also do fee bill reviews for individuals.
Legal fees that individuals incur are usually much more modest than those incurred by large corporations. Nevertheless, I have reviewed legal bills for individuals who have incurred in excess of $1 Million in legal fees for probate and estate matters, real property disputes, business deals gone bad and yes, even for divorces.
In this post as well as a follow-up post, I want to discuss the sensitive subject of how to discuss fee bill issues with your lawyer. I say that this is a sensitive subject because I find that while many individual clients are often downright angry about their high fee bills, many are at the same time downright reluctant – even downright fearful – about approaching their lawyer with their concerns about his fee bills.* In some cases, when clients have questioned their legal fees, their lawyers have bristled with some even threatening to withdraw their representation. (More in a subsequent post about what to do if your lawyer threatens to quit if you question her fee bills.)
So for all individual clients out there I will in this post and a subsequent post, provide you with a step-by-step guide on how to go about discussing legal fee billing issues with your lawyer.
Determine the Billing Issues & Your Grounds for Objection
First things first. Prior to discussing fee billing issues with your lawyer, you must be prepared to state specifically what it is you object to or are concerned about (i.e., the billing issues) and why (i.e., the grounds for your objection). In this regard, note that conclusory statements that you feel that the fees are too high are not going to be enough to convince your lawyer or a court. See Zest IP Holdings, LLC v. Implant Direct Mfg., LLC, No. 10-cv-0541-GPC-WVG (S.D. Cal. Dec. 3, 2014)(“[C]onclusory and unsubstantiated objections are insufficient to warrant a reduction in fees.”).
Thus, the first step to take before approaching your lawyer to discuss your concerns about the billed for fees and/or costs is to narrow you focus in on exactly what it is you are objecting to and why.
- Is it that certain billed for fees or costs do not seem appropriate?
- Is it that the descriptions of work in the billing entries are not clear?
- Is it the fact that the total amount exceeded the lawyer’s initial cost estimate?
- Is it that you question why so many firm attorneys are involved in your matter?
- Is it a combination of these issues or is it another billing issue?
No matter what the issue or issues are that you have with your lawyer’s billed for fees and/or costs, you must realistically assess whether you have adequate grounds for pursuing any of those issues with the lawyer. Only after this realistic assessment can you can you decide if there are adequate grounds to approach your lawyer on her legal bills. For just complaining to your lawyer about your legal costs without adequate grounds could unnecessary damage the relationship.
The best way to make sure you know whether or not you do have real issues with regard to your lawyer’s bill is to have your bill or bills reviewed by an experienced legal bill auditor. Of course, I or my company, LegalBillAudit.com, can perform this service.
At LegalBillAudit.com we offer a free preliminary evaluation on submitted legal bills of $50,000 or more. The reason we do this preliminary evaluation is to see if there is enough in the way of billing irregularities which would justify the cost of a legal bill audit. This is because we have found that although some legal bills seem high, there may be no or only minor billing irregularities. If you are interested in this free preliminary evaluation, you can go to the “request an evaluation” page on our LegalBillAudit.com website and follow the instructions on how to send the bills to us for evaluation.
So much for the infomercial. Now back to how to discuss fee bill issues with your lawyer.
Examine Fee Agreement or Retainer Letter on Fees & Costs
Once you have determined the billing issues and your grounds for objection, you should next look to any fee agreement that you may have signed or engagement letter sent to you or oral representations from your lawyer at the start of the representation on how the lawyer intended to bill you for fees and costs. It could be that what you are now objecting to had been clearly explained and fully understood by you.
Note that I use the terms “clearly explained and fully understood by you” because this is what the ethics of the legal profession require. See ABA Model RPC 1.5(b). Also see Marathon Oil, S.A. v. Morrissey, 982 F.2d 830, 838 (2nd Cir. 1993)(lawyer has burden to establish that fee agreements are “fully known and understood by their clients”). So if what you are objecting to now was fully explained to your understanding (either in writing or orally) and it is not otherwise unreasonable, you may not have adequate grounds to support what you are now objecting to.
I use the term “not otherwise unreasonable” because it may be that while all the terms of a fee agreement were clearly explained and understood by you, certain terms may have resulted in unreasonable fees being billed. If this occurs, the ethics of the profession do not allow a lawyer to bill unreasonable fees even if the client signed an agreement that permitted it. See ABA Annotated Model RPC (8th ed. 2015), Comments to RPC 1.5 at p. 82, Client’s Agreement citing In re Sinnott, 845 A.2d 373 (VT 2004) (“It is unethical for lawyers to charge unreasonable fees even if they are able to find clients who will pay whatever a lawyer’s contract demands.”) Of course, if you have LegalBillAudit.com do a legal bill review, any fee agreement or retainer letter will be examined to determine whether or not it contains any unreasonable terms.
There are other points to be made about examining a lawyer’s fee agreement or oral representations made about billing for fees and cost to see if it is acceptable or not. (Note to self: write a future blog post on fee agreements.) But for the purposes of discussing fee billing issues with your lawyer, we will just assume that there was nothing in your lawyer’s fee agreement or other communications on how she intended to bill for fees and costs that would affect your ability to raise certain billing issues with her.
In a follow-up post I will go over the other issues come into play when approaching your lawyer on fee billing problems. These issues includes steps you can take at no cost or low cost if your lawyer is unresponsive to your concerns.
* To read about one client who was not fearful about approaching his lawyers about his high legal bills, see my post entitled “CEO Vows To Fight Back Against Inflated Legal Bills.”