September 12, 2012

Attorney-Client Fee Agreements

Generally speaking, an attorney is required to execute a written fee agreement with his or her client prior to rendering services. The pertinent statute reads "in any case not coming within Section 6147 in which it is reasonably foreseeable that total expense to a client, including attorney fees, will exceed one thousand dollars ($1,000), the contract for services in the case shall be in writing." Bus & P C § 6148(a). For reference, Section 6147 relates to contingency fee matters which essentially mean that the attorney will not receive a fee unless the client prevails in their matter, e.g. a personal injury lawsuit.

  1. Any basis of compensation including, but not limited to, hourly rates, statutory fees or flat fees, and other standard rates, fees, and charges applicable to the case.
  2. The general nature of the legal services to be provided to the client.
  3. The respective responsibilities of the attorney and the client as to the performance of the contract.
A recent California Court of Appeal case seemingly carved out a probate exception to the rule that a written fee agreement is required in most cases. 

Estate of Wong (2012) 207 CA4th 366

In Estate of Wong, Donna Wong hired an attorney to represent her in a trust and probate matter regarding the estate of her late husband, Dennis. The couple had executed a living trust but had not properly funded it. For reasons unknown, the Ms. Wong and her original attorney never executed a written fee agreement. Years later, Ms. Wong fired her original attorney and hired substitute counsel. When substitute counsel completed the probate, original attorney submitted an invoice for the work they previously did for Mr. Wong's estate. The trial court granted original attorney's request for fees and Ms. Wong appealed this decision arguing that a written fee agreement was required.

The appellate court affirmed the trial court's decision, holding that because the estate is paying the attorney fee rather than the client, Bus & P C § 6148 is not applicable and hence no written fee agreement is required. In other words, since the focus of the written fee agreement is to protect the client, no trouble arguably arises for the client because the client is not responsible for payment of attorney fees, the decedent's estate is instead.  

Furthermore, the court noted that in cases where an attorney seeks compensation for extraordinary services on a contingent fee basis, a written fee agreement is required. Prob C § 10811(c). Conversely, compensation for ordinary services does not explicitly reference Bus & P C § 6147 or Bus & P C § 6148, the sections which explain the necessity of a written fee agreement in certain situations. Prob C § 10810. Consequently, if a written fee agreement was required, the California legislature would have referenced Bus & P C § 6147 or Bus & P C § 6148 in Prob C § 10810. Since the statute did not, no written fee agreement is required.