Legal Question in Real Estate Law in California

early settlement allowance

In my attorney-client fee contract there was a clause that stated: Early settlement allowance. In awarness of the fact that preparation for trial is the most costly phse of litigation to the Client, Attorney makes every effort to strategize and effect settlement of Client's case, to Client's agreed benefit, without going through the expense of trial. Accordingly, Attorney shall be provided additional compensation for effecting settlement, after the Court first sets the matter for trial, in the amount of $5,000. Said sum is due and payable in addition to payment for all outstanding billing for services rendered by Attorney, and is expressly agreed to be additonal consideration for Attorney's expertise in resolving the matter without incurring the expense of trial. Upon reaching an agreement after 7 months of litigation my attorney kept the $5,000, which ironically was the amount awarded to me. I paid my attorney $45,000 for a complaint I had filed against my former boyfriend for nonpayment of a $10,000 debt he had incurred on my credit card. Is this kind of nonrefundable, unearned fee legal in Ca?


Asked on 1/03/07, 3:45 pm

4 Answers from Attorneys

Larry Rothman Larry Rothman & Associates

Re: early settlement allowance

You may have a claim against your attorney, but we would need to review the work he did including all paperwork, and fees. If you feel that he overcharged, a claim with the local bar association fee dispute may be proper. Please call me if you have any questions.

Read more
Answered on 1/04/07, 8:14 am

Re: early settlement allowance

My suggestion to you is that you contact the State Bar of California. If the attorney's conduct is, in fact, unethical, they will file a complaint against the attorney.

Read more
Answered on 1/03/07, 4:58 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: early settlement allowance

First, I would suggest approaching this not as a matter of an unearned fee but as a matter of earning an excessive fee. Technically, the fee is "earned" when the conditions set forth in the contract happen, as they did here.

On the other hand, a fee of $45,000 for a "limited civil" complaint on a matter as simple as collecting a debt is unconscionable, in my opinion. What could possibly have cost so much? What issues needed to be researched, or what truckload of discovery documents needed to be reviewed and analyzed? Indeed, unless there is a whole lot more to this case than you describe or can be inferred, the fee is grossly out of line with ethics and fairness rules imposed on the legal profession.

I would suggest the following: (1) don't pay any more than you already have; (2) if you live, or the attorney practices, in Humboldt County, you may want to contact the Humboldt County Bar Association at 4454140 to discuss their fee dispute arbitration program; and (3) since the charging of excessive fees is of concern to the disciplinary folks at the State Bar, I'd suggest reviewing their Web site at calbar.ca.gov.

I'll do a little research on the general subject of excessive fees and post a supplemental response.

Read more
Answered on 1/03/07, 6:35 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: early settlement allowance

To supplement my previous answer:

Rule 4-200 of the Rules of Professional Conduct forbids an attorney to charge, collect or contract for an illegal or unconscionable fee. This $45,000 fee on a $10,000 plain-vanilla complaint certainly seems to be unconscionable. Therefore, as an alternative to a fee arbitration, or in addition, you might consider lodging a complaint with the State Bar.

I gave you their Web address; once on the site, go to the Public Service page, then to filing a complaint against a lawyer.

Pursuing both routes may be your best bet; the fee dispute arbitration demand may be the best way to get your money back, while the State Bar ethics complaint may be effective in getting this lawyer disciplined. Note that there may be a time limit for initiating a feww dispute, so maybe you should contact the Humboldt County Bar Association promptly.

Good luck, and let me know how it turns out.

Read more
Answered on 1/03/07, 7:56 pm


Related Questions & Answers

More Real Estate and Real Property questions and answers in California