Tag Archives: retainer agreement

The Florida Bar’s Rules Committee will propose additional changes to Bar Rules related to resolution of extraordinary liens in contingency matters

Hello and welcome to this Ethics Alert blog which will discuss the recent activity of The Florida Bar and the Board of Governors (BOG) related to the requirement that lawyers be required to resolve outstanding liens as part of the representation in contingency matters.  I previously blogged about the BOG’s approval of proposed revision to Bar Rule 4-1.5 to require lawyers to resolve the liens in my June 6, 2013 Ethics Alert.  The BOG initially approved the proposed rule revision at its meeting on May 31, 2013 and would add new subdivision (E) to Rule 4-1.5(f)(4) if approved by the Florida Supreme Court.

According to an article in the September 1, 2013 issue of The Florida Bar News, the Bar Rules Committee is revising the language of the revised rule which would allow the retention of another law firm to handle medical lien resolutions in contingency cases under certain circumstances.  The chair of the Bar Rules Committee told the Board of Governors (BOG) at its July 2013 meeting that questions came up after the BOG approved the amendments at its May 31, 2013 meeting, including when an outside attorney could be retained by the client to handle lien resolutions.

The chair stated that “(i)t was recognized that there were some extraordinary things that came into play with Medicaid and Medicare, and sometimes the lawyer is in over his head, and there are professionals who do that sort of thing.”  The change would clarify that the original lawyer may not receive any additional fee for handling lien resolutions under the original contingency fee agreement and also cannot split fees or receive any extra payment if lien resolutions are turned over to another lawyer.

The BOG had previously proposed an amendment to the rule allowing the retention of attorneys to handle medical and other liens under a reverse contingency fee with the consent of the client; however, the Florida Supreme Court rejected that rule amendment and opined that it is the responsibility of the lawyer as part of the original contingency contract to resolve the liens. The new proposed rule would permit the liens to be handled by another lawyer in extraordinary circumstances since the client would benefit by having those liens resolved by a lawyer concentrating in that area.  The revised rule will be placed on the BOG’s October 2013 meeting agenda for review and potential approval.

The current proposed rule revision language is as follows:

RULE 4-1.5 FEES AND COSTS FOR LEGAL SERVICES

 

4-1.5(f)(4)

 

1.  a lawyer in a personal injury or wrongful death case charging a contingent fee must provide ordinary lien resolution as part of the lawyer’s representation under the fee contract may not charge any additional fee to the client for providing such services, if all fees for the personal injury matter plus lien resolution exceed the contingent fee schedule;

 

2.  extraordinary services for subrogation and lien resolution may be referred to another only with the client’s informed consent, that additional fees by the other lawyer must comply with all provisions of the fee rule and,

 

3.  the lawyer providing the extraordinary subrogation and lien resolution services may not divide fees with the lawyer handling the personal injury or wrongful death claim. The comment explains what lien resolution services are required as part of the original fee contract and what extraordinary services include. 

Bottom line:  As I previously stated, it is the general practice of lawyers in Florida to resolve client liens on behalf of the client as part of the representation; therefore, this revision will not generally impact lawyers in most cases; however, if there are extraordinary circumstances, the proposed rule revision will detail the circumstances which would permit the client to retain separate counsel to handle and resolve those liens and provide guidance regarding those circumstances.

I will keep you posted and be careful out there!

Disclaimer:  this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Leave a comment

Filed under Contingency fee agreements, Florida Bar, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer fee agreements, Lawyer lien resolution in contingency cases, Lien resolution

Massachusetts Supreme Judicial Court amends Massachusetts Bar Rules to require most fee arrangements to be in writing effective January 1, 2013

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent Order issued by the Massachusetts Supreme Judicial Court which will amend the Massachusetts Bar Rules to require most fee arrangements to be in writing effective January 1, 2013.  The Order is  online at: http://www.mass.gov/obcbbo/SJCRPC10-24-12.pdf.

The Supreme Judicial Court Order amends Massachusetts Bar Rule 1.5(b) and will require that the scope of the representation and basis or rate of the fee and expenses be communicated to the client in writing in most circumstances.  This amendment is a major change from the current version of the Bar Rule, which states that only contingent fee agreements must be in writing and other types of fee arrangements should “preferably” be communicated in writing.  The section as amended provides:

(b)(1) Except as provided in paragraph (b )(2), the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client in writing before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated in writing to the client.

A new comment to the Massachusetts Bar Rule explains what is required and states that “a simple memorandum or copy of the lawyer’s customary fee schedule is sufficient if the scope of the representation and the basis or rate of the fee is set forth.”  The comment also notes that the lawyer ordinarily should send the written fee statement to the client before any substantial services are rendered.  Section (b)(2) of the revised rule creates exemptions to the requirement of a written statement for a single-session legal consultation and for a situation in which the lawyer reasonably expects the total fee to the client will be under $500. This section additionally states that, where an indigent representation fee is imposed by a court, a writing is not required because no fee agreement has been entered into between a lawyer and a client.

Whether the writing is a fee agreement executed by both parties or is a letter or memorandum from the attorney to the client, it must set forth the scope of the representation and the basis or rate of both the fee and expenses.  In addition to describing the services to be provided, the agreement should also specify, the limitations on the services, if any, such as the exclusion of an appeal from the representation or if other  types of potential relief will not be pursued.  The writing must also state whether the fee is a flat/set fee or a retainer against hourly charges and, if it is an hourly retainer, it must disclose the hourly rate.  The writing must also disclose how expenses will be billed.

Bottom line:  As of 1/1/13, Massachusetts lawyers will be required to put most fee agreements/arrangements in writing.  The rationale underlying this requirement that fee and expense arrangements be in writing is to avoid disputes between the lawyer and client; however, the lack of a writing can also form the basis of a charge that the lawyer violated the Bar Rules.  Which state will be next?

Be careful out there!

Disclaimer: this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Leave a comment

Filed under Attorney Ethics, Bar rules fee agreements, joe corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer fee agreements, Lawyer written fee agreements