Legal Question in Family Law in California
In a divorce case, paid $6,000 up front with time billed at $350 per hour. Only expended 12 hours on my case, leaving a remaining balance of approximately $2,000, which now the firm is claiming a minimum fee of $6,000 rather than paying me the remainder, like some kind of freaking bonus or something. Is this proper billing practice? Don't they owe the $2,000 to me? No wonder lawyers get a bad rap.
3 Answers from Attorneys
You will need to look at your retainer agreement. Many attorneys, especially those handling a large volume of smaller matters, like divorces, can only take a case if they make a certain minimum amount on it, to justify the cost of getting the file set up, staff time, overhead, etc. In that case, the retainer agreement will provide that the fee paid up front is earned when the engagement starts, but it is a credit against fees billed. I use that form of retainer agreement myself in smaller cases. If that is what your retainer agreement provides, then the attorney earned the fee.
I agree with Mr. McCormick, in that you need to read your retainer agreement carefully.
I disagree with him to the extent that he thinks his billing arrangements are OK. When a client pays a "retainer" for advance fees, it is required to be placed in an attorney client trust account. It has not been earned, and should not be placed in the attorney's general account.
The only type of retainer that is earned at the time of paying is what is known as a "true retainer." This is a payment for the attorney to be available, and is not an advance for future fees. Many attorneys make this mistake, and their names appear in disciplinary news in our State Bar monthly journal. When I attended ethics school for MCLE, I noted that many attorney were confused (either willingly, or unwillingly) between an advance for fees and a "true retainer."
The bar rules are incredibly clear that unearned fees must be returned to the client.
You definitely need to review your retainer agreement carefully to see if the $6,000 was a "true retainer", or just an amount which was to be billed against. If it was just an amount to be billed against, and they spent 12 hours at $350/hr., that would total $4,200.00, which would leave a balance owed back to you of, $1,800.00