April 2003  Volume 29, Issue 3
April 2003 Issue
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Build a Better Fee Agreement

A comprehensive written fee agreement between lawyer and client should do the following:

  • Define the scope of your services. Expressly state in the agreement the legal matter in which you are representing the client. Be specific.
  • Define the timing of your services. Make your services contingent on cooperation and payment from the client. If you want payment before commencing work, clearly state to the client that your services start after the client has paid the advance or the flat fee. State that your services may cease if the client fails or ceases to pay your bill.
  • Explain the fee arrangement. For your client's edification, explain the type of fee arrangement you are using.
  • State examples of the services to be billed to the client. For clients who are billed on an hourly rate basis, explain that they will be billed for your time on all aspects of the case. Cite several types of billable services, such as depositions, phone calls, drafting correspondence, pleadings and trial preparation. State the amount of your minimum time increment: one-tenth of an hour, one-quarter of an hour or the like.
  • Explain the client's obligation for costs. There are two types of costs often billed to the client: costs incurred in your office, such as copying charges, postage fees and long-distance phone charges; and costs billed by outside vendors, such as court filing fees, messenger services and process fees. Some lawyers pay all costs and pass them along in their bills to clients. Other lawyers charge clients for the in-office costs and have the clients directly pay the costs incurred by outside entities. Still other lawyers require funds in advance from clients to pay for costs incurred during the course of the matter. Decide how you want to do it and clearly say so in your agreement.
  • Explain your billing practices. Let clients know how often they can expect to receive your bill (preferably monthly), then make sure you stick to the promised schedule. And explain when payment is due.
  • Allow your client time to question your bill. Let clients know in the fee agreement that they can discuss the bill with you at any time.
  • Consider a fee arbitration provision. More and more lawyers and clients are using arbitration to resolve fee disputes. You may want to consider such a provision in your agreement.