California Bar Journal
OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA - OCTOBER 2001
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California Bar Journal

The State Bar of California


REGULARS

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Front Page - November 2001
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News / News Briefs
Applicants sought to oversee bar's diversion program
Let's have another cup of - legal advice
Foundation leads students to capital
Six honored for professional service
Warwick, six others named to California Judicial Council
Several thousand lawyers suspended for failing to pay dues, certify MCLE
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Trials Digest
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Opinion
From the President - Remembering the fallen
The rule of law is our strongest weapon
Pro bono work is lawyers' duty
Letters to the Editor
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Law Practice - Success: The top eight requirements
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You Need to Know
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MCLE Self-Study
Planning for education expenses
Self-Assessment Test
MCLE Calendar of Events
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Discipline
Ethics Byte - Lawyers move on in usual way despite disaster
Former city councilman spent his son's settlement
Attorney Discipline
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Public Comment

ETHICS BYTE

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Lawyers move on in usual way despite disaster

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By DIANE KARPMAN
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Diane KarpmanWhile writing this column under the pall cast by the unspeakable horrors of recent events, I am reminded that if we are diverted from our goals, the forces of evil prevail. Lawyers are trained to deal with the unfathomable. The media has reported that the firm of Sidley Austin Brown & Wood will reopen in a new location, less than a week after their offices in the World Trade Center were destroyed. That indomitable spirit is what makes me proud to be a lawyer.  We have major problems and once again, it is the lawyers who will provide the solutions. So, moving on . . .

This past July, the ABA's House of Delegates rejected a proposed modification of the Model Rules that would require a written fee agreement. Those lawyers do not realize that written fee agreements protect against the selective memory demonstrated by our occasionally forgetful clients. The problem with the ABA proposal is that the absence of a writing would have been disciplinable, as opposed to California's fee statutes, which limit the lawyer's recovery to the reasonable value of the services.

This foundational principle (that the attorney-client relationship is inherently contractual) was reaffirmed recently by the Supreme Court.  In Flannery v. Prentice (2001) 26 Cal. 4th 572, a case involving a lawyer's right to attorney fees (FEHA Sec. 12965) absent a written fee agreement, the client's claims of legal malpractice and breach of fiduciary duty was based upon the lawyer's failure to advise and obtain her consent to the terms of the agreement. The court soundly rejected the client's argument. The client claimed all the fees, which would have been a windfall. The court found that "could make sense only if the law treated attorneys who fail to secure fee agreements as deserving of such punishment." Id at Lexis page 35. 

"The well-established rule is . . . '[the client] must be deemed to have promised to pay [the attorney] the reasonable value of the services performed in his behalf and with his consent and knowledge. [citation omitted]' " The Legislature "expressly has declined to sanction failure to obtain a written agreement as plaintiff proposes." Id at 36.

Remember that the negotiation of a fee agreement is an arms-length transaction. But, it is not quite the same as buying a used car because of statutory limitations, such as Rule 4-200 (unconscionable fees), and the impending fiduciary duties that will thereafter cloak the relationship.

The court recognized there are many situations in which it is "impractical" to obtain a written fee agreement: "noncontingency fee representation when the client is a corporation" (Id at page 37); where based upon past representation a promise to pay can be implied;  where the fee is less than $1000; and obviously, during emergencies. In the midst of a horrible catastrophe, lawyers are not about to refuse to help people because they don't have a written fee agreement. We are a helping profession, and the Supreme Court has recognized that we should not be penalized for giving aid to those needing assistance.

In terms of our own emergencies, be certain that when you back up your computer, you remove your back-up from the office so that it is available if you or your clients need it.