Legal Malpractice – Excessive Billing
Is it malpractice for a lawyer or law firm to overcharge? Under Rule 1.5 of Supreme Judicial Court Rule 3:07, Massachusetts Rules of Professional Conduct states that a lawyer shall not enter into an agreement with a client for, charge, or collect an illegal or clearly excessive fee. While in some matters setting fee parameters is relatively easy – an uncontested divorce, a no asset personal bankruptcy, an uncontested will, in other cases the legal fees will be a function of the demands of the client, the actions and behavior of the opposing party and the rules of court.
But is it malpractice or a breach of contract?
Written Fee Agreements
Written fee agreements should state what the legal matter is, what the fees are, and the expectations regarding payment. Out of pocket costs should be addressed in writing.
Contingent fee agreements are common in motor vehicle, personal injury and wrongful death cases. They are required to be in writing and it is required that you receive a copy of the written fee agreement.
Legal malpractice can often be found when the lawyers exceeded the scope of the fee agreement; or failed to perform the tasks outlined in the fee agreement.
Fee Contests Without Fee Agreements or Engagement Letters
Any case where there is no written fee agreement or engagement letter is suspect. Why would either party enter into such an agreement? While written agreements are absolutely required in contingent fee cases we see many potential legal malpractice clients whose attorneys never presented such an agreement.
Notwithstanding the nature of your legal matter, to some degree the decisions you make are business decisions and the legal fee is a factor, or should be, in making those decisions.
Legal malpractice can often be found where there was no fee agreement and inadequate work for what should have been expected was the result.
Retainers and Legal Malpractice
Retainers are a regular business practice; the attorney requests a set amount to be paid prior to undertaking the legal work. That money should be put into the attorney’s IOLTA account (Interest On Lawyer’s Trust Account). A bill from the attorney should state that a specific amount of the retainer is being removed from the IOLTA account in payment for the bill; or, that a specific amount is due and owing.
There is often a violation of ethical rules when clients’ monies are involved. Legal malpractice is often found in these cases.
Are Credits or Fee Reductions Valid in Legal Malpractice Cases?
Law firms often will reduce a bill, especially a final bill, to get paid and complete a matter. Law firms are not permitted to request a release of malpractice claims in exchange for a reduced final payment, absent clearly informing the client, in writing, that they should seek independent counsel.
Law firms that issue credits for a portion of a bill cannot request the full fee when sued for legal malpractice. See BOURGEOISWHITE v. STERLING LION, 91 Mass. App. Ct. 114 (2017). In that case, the law firm issued clear credits for bills, on a regular basis, however attempted to rescind those credits when they filed suit for their fee.
Retain Experienced Counsel for a Contested Legal Bill
The attorneys at Burns & Jain have represented victims of overbilling in many instances. Often times there is legal negligence as well. Contact us for a free consultation.