What Is A Lawyer Representation Agreement?
A lawyer representation agreement can be thought of as an agreement between a prospective client and law firm which sets the stage for the legal services to be performed. If an individual decides to move ahead with the representation, he/she retains the particular lawyer. The lawyer thereafter provides services to the individual under the terms of the lawyer representation agreement . The lawyer representation agreement serves a number of functions, which usually will include the following: The goal of a typical lawyer representation agreement is to clarify and provide a framework for the professional relationship between the lawyer and the client. It does not need to be burdensome or create inefficiencies but should nonetheless be effective.
What are The Key Parts Of A Representation Agreement?
At its essence, a lawyer-client representation agreement is a business contract between the two of you. To be enforceable, the terms have to be clear, unambiguous, and complete. Below are examples of some of the key elements that should be in a well-drafted representation agreement:
Fee Structure for Legal Services: Will you be charged for every minute the lawyer or staff spends on your case? Does the fee include costs such as court filing fees? Are there circumstances in which the lawyer can charge for other services, such as photocopying or travel? If so, how much?
Scope of Representation: Does the lawyer represent you in all matters in any jurisdiction that affects your rights? Or is the lawyer only providing services in a discrete matter? Does the lawyer represent you with respect to only litigation or also with respect to contract negotiations and drafting, as needed?
Termination Clause: Under what circumstances can you terminate the lawyer or the lawyer terminate you? What happens to the lawyer’s fees if you terminate and the lawyer has not yet been paid for work already done? Does the lawyer have a retaining lien for unpaid fees? Do you have to pay the outstanding balance owed to the lawyer upon termination? If you want a refund for unearned fees, does the lawyer agree?
Different Types Of Lawyer Representation Agreements
With respect to a written retainer agreement, a lawyer is obliged to provide a client with a copy at or before the time the agreement is entered into. The rules changed in recent years to allow lawyers to provide them with the agreement after, however, which is not ideal from the clients’ perspective and from the perspective of those who want to enforce legal rights. The most basic form of representation agreement is the standard retainer agreement where there is a hybrid of an hourly fee and a fixed fee. It usually provides for a minimum amount to be paid at the outset and which is applied to fees as the work is done. The hourly rate kicks in as that advance has been depleted. The difference between this sort of agreement and a standard hourly rate agreement is the notion of a fixed fee at the outset. There is almost always room to negotiate on these agreements and the need to negotiate depends on the strength of the case and nature of the issues to be dealt with. Contingency fee agreements are also prevalent in personal injury matters as are fixed fee agreements. For instance, a fixed fee divorce agreement whereby all services are provided for one flat fee paid up front is fairly common but there may also be a contingency fee element where support issues are involved. Contingency fee agreements tend to be uncommon in family law matters but sometimes can be found. Contingency fee agreements vary as well but are typically based on a percentage of the amount of the claim recovered in a settlement or judgment or sometimes the value of property obtained as a result of the settlement or judgement. Contingency fee agreements, even in personal injury matters, are becoming less common as the costs bear to be legalized in different ways through the Arbitration Act and the CPA. In family law matters, expensive expert witnesses are nonetheless often paid for on a contingency basis where there is a potential recovery. Fixed fee agreements are becoming more common where the parties agree at the outset on the maximum amount to be paid. In that way, the parties can agree on a figure to be paid and the lawyer will write off any excess. This is more common in areas like the real estate market and might be seen in a residential real estate transaction.
The Advantages Of Having A Representation Agreement
The most significant benefit of having a representation agreement, for you and your lawyer, is that it sets out the terms, responsibilities, and expectations of you both – in writing – before you start working together. Ideally, every new relationship between a lawyer and a client will begin with a meeting in which you discuss and agree upon what points of law you wish the lawyer to address, what results you expect and what results the lawyer expects, and how the two of you will jointly work towards achieving those results. When that conversation and agreement are reduced to writing and signed by the lawyer and you, the strengthened relationship (in theory) should be more solid, more durable, and more successful than one that is not.
A written representation agreement is also designed to protect the lawyer, as it permits the lawyer to do the work or research that he or she has agreed to do without the fear of legal repercussions (a malpractice lawsuit, for example) should that work result in outcomes that are less than satisfactory to the client. In other words, your contract with the lawyer creates a safety barrier for the lawyer that allows the lawyer to do his or her job without fear of being held personally responsible should they, for example, overlook a few sales receipts in a family business, which then leads to a favourable judgment for the opposing counsel and an unfavourable outcome for the client. What is the lawyer supposed to do in such a case? If, before this disagreement occurred, you and the lawyer had signed a written representation agreement, and if that agreement contained a clause in which you clearly understood (and agreed to) that one of the lawyer’s duties was to ask for, review, and inform you of the necessity of maintaining and preserving all business and financial records during the phase of the engagement related to the seller’s purchase of business, then you could not successfully sue the lawyer for malpractice on the basis that the lawyer overlooked your sales receipts – you had agreed yourself to that residential property being in good condition under the terms of that specific agreement!
Common Errors In Lawyer Representation Agreements
Clients often miss important details when hiring a lawyer that can set their case or representation off on the wrong foot. Failing to take time to read the fine print of a clause in a retainer or fee agreement, or not understanding how the billing works in a particular arrangement can lead to trouble later. For example, if you don’t understand how the firm bills for work, or you don’t understand what expenses may be charged to you, fees can quickly add up and leave clients frustrated and confused.
Indicating clients are responsible for all "fees and costs". Many clients think that they are only responsible for fees for their own lawyer, but in reality they can owe fees to other lawyers and law firms and expenses, like court filing fees and service of process fees, or even such things as the costs of a private investigator, or expert witness . Not adding a clause for fee-shifting, the ability to recoup fees from the other side if you win the case. Not providing for a retainer – a retainer protects the lawyer from turning over work product and preventing the client from paying bills, at least until the work is done and the lawyer can turn over their file to the client who may then have to pay a court to turn over pleadings to them or pay a vendor to index the file for them, etc. Clients may not know that with some fee arrangements, they could owe the lawyer a significant amount for work that is done and not paid for yet, so a retainer protects that.
Negotiating a Lawyer Representation Agreement
When it comes to legal representation agreements, the initial contract that prospective clients sign with their attorney is sometimes not a true representation of the parties’ ultimate agreement. In such situations, the lawyer may draft another contract at the conclusion of the case, which the client would then sign. The additional contract could purport to provide or limit the attorney’s entitlements in a way the client did not anticipate at the outset of the representation.
Clients should be aware of the following advice before they retain the services of counsel in order to ward off unpleasant surprises further on in the legal proceedings. First, each client needs to know it is permissible to negotiate for better contract terms and conditions. Similar to any other negotiated contract, a lawyer’s representation agreement can be amended to include the provisions that both sides mutually agree to, and the contract can be re-executed by the parties thereafter.
Second, clients need to fully understand how their attorney will be paid and whether the arrangements are even reasonable for the work that will be performed. For instance, if an attorney charges an hourly fee of $350, and the case requires 70 hours to conclude, then the total legal bill will amount to $24,500. Before signing the contract, the client must ask whether the legal fee is so high because the attorney is spending more time than he should to perform the work, or whether the fee is from the mediation process because the lawyer will devote his full attention to the matter once litigation begins.
If the latter were true, then clients are being charged an unjustifiable amount for what they initially believe is competent representation. Furthermore, one must also question why, if mediation is intended to resolve a dispute, attorneys still pursue litigation, if they hand over the mediation case to someone else when it fails?
Likewise, if the lawyer’s hourly fee is contingent on whether the case reaches trial, and if the client’s expectation is that the case will be settled prior to litigation, then it makes much more financial sense for the client to ask the lawyer to reduce the rate. Conversely, if the parties agree to sign a hybrid contract, whereby a lesser amount will be charged until a settlement offer is received, which, if not accepted, would then result in the lawyer charging an hourly rate, then the client has to understand how that alternative will impact overall costs.
How will the lawyer’s fees be affected if the mediation process fails? When will the two sides convene again to make a decision about whether the mediation process should continue or whether the case should proceeded to litigation? A written contract will only protect the parties if the right questions are asked and answered.
Ending a Lawyer Representation Agreement
Separating from your Lawyer Representation Agreement
Your lawyer represents you in a family law matter in accordance with Family Law Rules 13.01 to 19. They must abide by those rules to provide competent and proper representation. However, there are many occasions in which the client-lawyer relationship can break down requiring either the client or the lawyer to terminate the lawyer representation agreement. This is not an uncommon dilemma in Canada.
The question remains: how does one proceed in breaking up with their lawyer? Some clients believe it is sufficient to send a letter stating the reasoning behind the termination of a lawyer representation agreement. While it is true such a letter serves as basic notice of the termination, it is not sufficient. You must notify your lawyer of the termination in writing and ensure that your lawyer acknowledges this change. The requirements of a lawyer representation agreement are detailed in the Practice Direction Number 1 of the Family Court of the Superior Court of Justice. This is what it states:
A lawyer must notify the client in writing if he/she no longer represents the client. A lawyer must write the former client when the client owes him/her money and explain the options available for recovering the amount and other options that may be available to the client. A lawyer must respond appropriately if a client changes lawyers in a case. A lawyer should not obstruct a former client’s timely access to justice. A lawyer should not require a retainer and seek to charge fees to forward a file to a new lawyer. A lawyer must not refuse to release a file to a former client simply because she/he has not been paid or because there are outstanding fees. Once a client has a new lawyer and the new lawyer provides written notice of their retainer to the first lawyer, the first lawyer must deal with the former client’s new lawyer without interfering in the matter. A lawyer cannot and should not attempt to recover money owed by the former client from the proceeds of a settlement or a court order for costs. A lawyer must be aware that fees may be ordered or agreed to be paid from the proceeds, but they are not entitled to that money until a determination is made about the quantum, manner of payment, and points of payment (e.g. fourth from the top). A lawyer must not make a complaint to a law society about a former client unless required to do so by law, such as where there are reasonable grounds to suspect that the conduct of a former client constitutes unprofessional conduct.
As you can see, it is not as simple as sending a letter and moving on. Like most things in the legal world, there is more paperwork required when such a decision is made. This of course means more time and money.
The reasons we see such changes in client-lawyer representation agreements are bountiful. The published data shows us that "The 2017 Justice System Report indicates that the top five issues for lawyers under the Family Law Service Area were: Lack of communication/information (19%) Lack of capacity (16%) Lack of Federation/Resource problems (14%) Lack of judicial resources (11%) Lack of staff resources (8%)". Humans are notoriously fickle and changes are inevitable and expected. The most mundane of interactions can be more than what we bargained for or imagined. No one is perfect, even lawyers.
Whether or not you choose to terminate your lawyer representation agreement is up to you. It is not an overly pleasant process, but if you are unhappy, the choice is yours.
The Legal Ramifications of Breaking A Lawyer Representation Agreement
A lawyer must abide by the terms of a representation agreement unless the terms are modified by the parties or the agreement is terminated by agreement, operation of law or by the death, incapacity or bankruptcy of the client. If the terms of a representation agreement are breached by a lawyer, the client may have a cause of action against the lawyer in breach of contract.
In Canada, lawyers are governed by the rules and regulations of each of the provinces. Most provinces prohibit lawyers from charging clients or third parties for service not rendered or in respect of which the lawyer has not performed a service. These rules and guidelines generally contain a few required terms that must be contained in agreements. Assuming the fee arrangement does not contravene the provincial law, there are few restrictions placed on lawyers in Canada to modify the terms of a representation agreement. Many attorneys contemplate the possibility that the client’s matter might be transferred to another attorney for some period of time, especially when a client is in jail or out of province. Therefore, the payment contingency requirement is carefully thought out and considerably expressed so that transferring the account to another attorney will not dangerously jeopardize the attorney’s ability to collect the unpaid balance as it becomes due.
Similarly, clients must comply with the terms of a representation agreement or they too could be subject to liability for breach of contract . Generally, if a client fails to cooperate with the attorney, fails to answer questions, fails to render information or resides out-of-state, the client is in breach. If the fee agreement contains a demand for full payment up front and the client refuses, then the attorney is entitled to sue for the unpaid fees if the client has not exhibited good cause for not complying. In some instances, the representation agreement contains a clause in which the attorney agrees to compensate local attorney’s fees in the event that a non-South Carolina attorney is engaged to handle the matter, however, the attorney must be aware of the restrictions and limitations the South Carolina Supreme Court has noted in the fee agreements. If the attorney has failed to comply with the enforcement restrictions, they are precluded from any enforcement by law and, therefore, such action would be prohibited in a court of law.
The law in South Carolina prohibits attorneys from paying retainers to be held pending the completion of the case. The lawyer may withdraw from a case and move the case to the next attorney in line but the lawyer cannot get back his retainer.
If an attorney terminates his representation, he must attempt to resolve any issues relating to the withdrawal agreement and notify the court (where applicable). Upon termination, the attorney must promptly refund any unearned portion of any fee paid in advance for services.
As is evident above, both clients and lawyers need to adhere to properly drafted representation agreements and comply with its terms.
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