Legal Question in Business Law in California

You have to look at the terms of teh agreement with the law firm. Immediately contact them, thank them, and then see if they will let you out of the contract as they did not have to do any work, no costs, it is now impossilbe for them to complete the contract as that has already occurred, agreement contigent [at least implied] on the bannk not giving the loan modifiction, etc. If they are a legitimate company then should let you go without charge.

I think Mr. Shers has overstated matters a bit. I can imagine plenty of circumstances in which the law firm would be justified in keeping some or all of your fee if the contract allowed it to do so. But I also think he is right that most firms would offer at least a partial refund even if they didn't have to.

Certainly reading and understanding your contract is Step One to determining the strengths and weaknesses of your position. Also, make sure you have notified them promptly that their (further) services are unneeded.

An attorney is forbidden under the rules of ethics to charge an unconscionable fee. A $5,000 fee where the attorney has done little or no work on your project, has not re-arranged his or her schedule to accommodate you, and has not turned down other work because of calendaring time for your job, is very likely to be considered "unconscionable" especially if the law office is kind of a loan-modification mill where little individualized research, writing and thinking is required.

Attorney-client fee disputes must go to arbitration if the client so demands. Ask your county bar association for a copy of their fee-arbitration rules and any pamphlets they may have to explain the process to aggrieved clients. Before asking for arbitration, you might mention to the firm that you are planning to request arbitration if you don't get a substantial refund. Do, however, read your contract carefully beforehand.

Write them certified mail RRR and tell them to stop work immediately and refund your money. Probably they will claim they did $3,999 worth of work the first day, so you will have to take them to state bar fee arbitration.