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.