When interpreting and enforcing attorney-client fee agreements, Texas courts take into account not only the contract itself but also the ethical considerations overlaying the contractual relationship. Therefore, a client can dispute a lawyer's fee. A lawyer cannot enter into a fee agreement that is "illegal or unconscionable." A fee is "unconscionable" only if a competent lawyer could not form a reasonable belief that the fee is reasonable. Several factors determine reasonableness, including: time, labor, novelty of issues, required skill, preclusion of other employment, as well as the experience, reputation, and ability of the lawyer.
If the client enters into a contingency fee agreement with a lawyer and the arrangement is not put in writing, the contract is void. A contingent fee must also comply with the general requirement that the fee not be illegal or unconscionable. A contingent fee must specify the percentage of any recovery that the attorney will receive as fees, and identify the expenses that will be deducted from the recovery. Upon the conclusion of a contingency fee case, a lawyer must provide the client with a written statement describing the outcome and calculation of recovery.
Although often mistaken as a fee, a "retainer" utilized as prepayment for services is not a fee. The attorney has not earned the fee and, therefore, the retainer is refundable. By contrast, a "flat fee," which is often used in criminal defense agreements, is a non-refundable fee advanced to secure a lawyer's services and remunerate him for the loss of opportunity to accept other employment. Texas courts carefully scrutinize the language of a lawyer's contract that includes the word "retainer" to determine if it is a true retainer versus a prepayment for services. Simply labeling funds as a "retainer" or as "nonrefundable" does not necessarily make it so.
If you have a fee dispute regarding your lawyer's fee, you may contact the Dallas Bar Association Fee Dispute Committee at (214) 220-7400 or www.dallasbar.org. The Committee has set up a voluntary program in which the client and lawyer, by mutual agreement, can resolve their dispute by binding arbitration. This process can reduce legal costs; however, it also largely eliminates any real prospect for appealing an adverse decision. A client can also contact the State Bar of Texas for other cost-effective fee dispute processes.
If you have questions about a potential fee dispute, do not hesitate to contact one of the experienced attorneys at Nowak & Stauch. We can examine your fee agreement and the facts of your situation, and assist you in exploring your options and remedies.
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