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B.  Hiring a Lawyer and Establishing Fees

Few legal problems disappear at a lawyer's touch, and lawyers cannot significantly reduce the time you must wait before receiving your day in court.

What a lawyer can and should do is zealously protect your interests. He or she should represent you competently, keep you informed, and bill reasonably for services. The good lawyer fights for you and protects you.

Lawyer-client disputes sometimes arise because:

• Fee arrangements are not spelled out.
• Clients are not consulted regarding settlement negotiations.
• Phone calls are not promptly returned.
• Work on legal matters is put off.
• Potential conflicts of interest are not fully disclosed.
• Client funds are used improperly.

Laws are complicated, and people need lawyers to guide them properly. We are exposed to hundreds of different commercial transactions (buying a house, signing contracts, divorce, etc.) that require legal services. In addition, lawyers advise us about taxes and labor regulations, social security, and administrative and other legislative enactments. Some people experience financial difficulties or run afoul of the law. Others require estate planning, including the preparation of wills. Thus, the services of a lawyer are often required.

The best way to determine if you have a problem requiring legal attention is to speak to a lawyer. He or she should be selected with care. A lawyer who competently represents clients in contract law may not be qualified to represent the same client in a personal injury lawsuit.

• Call your own lawyer, if you have one, and ask what he or she thinks about your problem and whether a meeting should be scheduled.
• f you have never dealt with a lawyer, ask friends, relatives, or business associates if they can recommend someone.
• Call your local bar association and ask for the names of lawyers who specialize in your particular problem. Some of these associations maintain lists of lawyers who do not charge more than $25 for the first half-hour of consultation (some lawyers will give you a free 30-minute consultation). Both prominent and neophyte lawyers list their names with the bar association. If experience is important, be sure to say so.

Be careful not to automatically choose a lawyer solely on the basis of his or her advertising. Claims about fees, expertise, and success rates can be misleading. Also, don't seek recommendations from bail bondsmen or hospital personnel: They may not be objective.

The initial interview serves several important purposes: It helps you obtain a sound evaluation about your legal problem, and it helps you decide if you should hire this lawyer. The initial interview is also the time to discuss important working details, such as the fee arrangement.

Bring all pertinent written information with you, such as copies of employment contracts, checks, letters, bills of sale, photographs. Tell the lawyer everything related to the matter. Try to communicate relevant information without inhibition-your discussion is confidential. All of this will facilitate the lawyer’s work and time.

Once the lawyer has the facts and a lawsuit is considered, he or she will:

• decide whether your case has a fair probability of success after considering the law in the state where the suit will be brought
• give you some estimate as to how long the lawsuit will last
• estimate the legal fees and disbursements
• tell you what legal papers will be filed, when, and what their purposes are
• discuss the defenses your opponent will probably raise and how you will deal with them

If the lawyer sees weaknesses in your case or believes that litigation will be unduly expensive, he or she may advise you not to sue.

One of the best ways to protect yourself is to request an opinion letter. Opinion letters spell out the pros and cons of a matter and help you evaluate whether you should proceed and spend money to accomplish your objectives. Even though you will probably be charged for the time it takes to draft the letter, it is usually worth the fee.

It is important to feel that the lawyer is open and responsive to your needs, that he or she is genuinely interested in helping you, that he or she will answer your inquiries promptly, and that your case will be prepared and handled properly. Although it is difficult to predict how well the lawyer will perform, there are certain clues to look for at the interview.

• Are you received on time?
• Does the lawyer leave the room frequently during the interview, or permit telephone calls to intrude?
• Does he or she demonstrate boredom or lack of interest by yawning or finger-tapping?
• s he or she a clock watcher?
• Does he or she discuss the fee arrangement with you up front?

• What is this lawyer's reputation? Ask if you can talk to a previous client. Don't be impressed by the law school he or she attended; most do not give their graduates practical experience. In fact, many less-prestigious schools offer superior nuts-and-bolts training.
• Be sure that the lawyer you interview will be the one working on your case. People often go to prestigious firms expecting their problem to be handled by a partner. They pay large fees but wind up being represented by a junior associate.
• Will the lawyer be available? Ask what his or her normal office hours are. Request that he or she return phone calls within 24 hours, or that a secretary or associate return your phone calls if the lawyer will be unavailable for an extended period. In return, make it clear that you will not call unnecessarily.
• Will the lawyer work on your matter immediately? The legal system is often a slow process and there are statutes of limitations. Insist that the lawyer begin working on your case as quickly as possible.
• Are there conflicts of interest? One of the rules of professional ethics, which lawyers are bound to follow, states that a lawyer should avoid even the appearance of impropriety. Always ask the lawyer up front if he or she perceives any potential conflict of interest.
• How will your funds be handled? Lawyers are obligated to keep client funds in separate accounts. This includes unearned retainer fees. The rules of professional conduct state that a lawyer cannot "commingle" client funds with his or her own. A lawyer must notify you immediately when funds are received on your behalf You must also receive an accurate account of these funds-a complete explanation of the amount of money held by the lawyer, its origin, and the reason for any deductions. Tell the lawyer to place your funds in an interest-bearing escrow account. Later on, when your funds are remitted, be sure that the interest is included in the amount returned to you.

The major factor in determining whether you should hire a lawyer is the amount of experience and expertise he or she has handling legal problems similar to yours. Use a lawyer who devotes at least 30 percent of his or her practice to your area.

Many lawyers charge a nominal fee, if any, for a first meeting; after that, fees should be charged only for actual time spent working on the matter. Charges are based on the amount of time and work involved, the difficulty of the problem, the dollar amount of the case, the result, the urgency of the problem (a real estate closing the lawyer must handle the next day should command a higher fee than the same closing that takes place in a month), and the lawyer's expertise and reputation.

Costs are expenses that the lawyer incurs while preparing your case or working on your matter. These include photocopying, telephone, mailing expenses, and court filing fees. Be certain you know which of these costs you must pay. Frequently, a lawyer cannot tell you exactly how much his or her services will cost because he or she is unable to determine the amount of work that is involved. Ask for an estimate. If the figure seems high, consider speaking to another lawyer.

Flat fee. In a flat fee arrangement, you pay the lawyer a specified sum to get the job done. Preparation of a simple will, handling of an uncontested divorce, the forming of a small corporation, adoption, and certain commercial contracts are often performed for a flat fee.

Flat fee plus time. Here, a sum for a specified number of hours is charged. Once the lawyer works more hours than are specified, you are charged on an hourly basis (see Figure 6.2).

Hourly rate. Most lawyers bill on an hourly basis. This can range from $75 to $300 or more an hour.

Contingency fee. Here the lawyer keeps a specified percentage of any money recovered via a lawsuit or settlement. Contingency fee arrangements are common in personal injury and medical malpractice lawsuits. Many people favor contingency fee arrangements because they are not required to pay legal fees if their case is unsuccessful.

Some types of contingency fees are not permitted. For example, a lawyer cannot structure the size of his or her fee on the type of verdict obtained for a client in a criminal matter. Contingency fees are also looked upon unfavorably in matrimonial actions (because they are viewed as encouraging divorce). Nor are contingency fees that exceed maximum allowable percentages (typically 45 percent) permitted in personal injury suits.

There are distinct advantages and disadvantages to each fee arrangement. When you pay a flat fee, you know how much you will be charged, but you do not know how much care and attention will be spent on your matter. The hourly rate might be cheaper than a flat fee for routine work, but a lawyer can "pad" timesheets to increase the fee. In addition, although contingency fee arrangements are beneficial if your case will be very expensive to try, the arrangement can encourage a lawyer to settle for less money rather than go to court (see Figure 6.3).

Insist that your fee arrangement be spelled out in writing and that all provisions be clearly explained. The lawyer may ask for a retainer at the interview. This guarantees the availability of the lawyer to represent you and is an advance paid to demonstrate your desire to resolve your problem via legal recourse.

Ask whether the retainer is to become part of the entire fee and whether any unused part is refundable. Be sure that interest will not be imputed if you are late paying fees. Request that all fees be billed periodically and that billing statements be supported by time records that include the number of hours (or partial hours) worked, the people contacted, and the services rendered. Some lawyers may be reluctant to do this, but by receiving these documents and statements on a regular basis, you will be able to question inconsistencies and errors before they get out of hand. You will also be aware of the amount of the bill as it accrues, and can pay for it over time if you choose (see Figure 6.4).

Civil actions usually take up to five years. By accepting a fair settlement early on, you have use of the money, and the proceeds can be invested to earn more money. You eliminate large legal fees, court costs, and the possibility of eventually losing the case at trial.

However, if you have a good case, you may get a larger settlement by waiting before accepting a settlement. This is especially true in personal injury lawsuits. Most trial lawyers believe that larger settlements are obtained by waiting until a case reaches the courthouse steps. The reason seems to be that insurance companies do not negotiate in earnest until the moment before a case is tried. Time is on the side of the insurance company. It makes money by holding settlement funds and investing them.

The decision to accept a settlement should be made jointly with your lawyer. He or she knows the merits, pitfalls, and true value of the case better than you. However, do not be pressured into accepting a smaller settlement than you think you deserve.

Instruct your lawyer to provide you with a detailed explanation of the pros and cons of settling your case. Inform him or her that you prefer to control your affairs, including the decision of settling your claim. Your lawyer cannot settle or compromise the case without your approval. If he or she does, you can sue for malpractice.

You have the right to change lawyers at any time if there is a valid reason. These reasons include improper or unethical conduct, conflicts of interest, and malpractice. However, you cannot change lawyers merely to stall for time.

If you are dissatisfied with your lawyer's conduct or the way the matter is progressing, consult another lawyer for an opinion. Do this before taking action, because you need a professional opinion to know whether your lawyer acted correctly or improperly. Never fire your lawyer until you have hired a replacement. Otherwise, you may be unrepresented, and your case could accidentally be dismissed. If you fire your lawyer, you may be required to pay for the work rendered. You may also have to go to court to settle the issue of legal fees. However, this should not stop you from taking action if it's warranted.

If you have evidence that your lawyer misused your funds for personal gain or committed fraud, immediately file a complaint with the grievance committee of your state or local bar association. All complaints are confidential, and you cannot be sued for filing a complaint if it is later determined that the lawyer did nothing wrong. In some states, clients can be reimbursed up to $100,000 for funds stolen by lawyers.

In New York, for example, the state legislature has enacted a Lawyer's Fund for Client Protection. AU practicing lawyers in the state are required to pay an annual registration fee of approximately $300 for use by the fund. When lawyers bilk clients out of money due (e.g., money given by the client to the lawyer for security deposits in real estate transactions, money paid by insurance companies to lawyers on behalf of their clients for personal injury settlements, etc.), administrators of the fund determine who is entitled to receive reimbursement and for how much (up to a $100,000 limit).

Many states have enacted similar plans to protect consumers from disreputable lawyers, since the number and size of client complaints has increased dramatically. However, in most of these states you are not entitled to reimbursement for any money misused or lost by your attorney engaged in a business transaction with you as a partner; you are entitled to reimbursement only for money lost as a client.

Another alternative is to commence a malpractice suit against your lawyer. Legal malpractice arises when a lawyer fails to use "such skill or prudence as lawyers of ordinary skill commonly possess and experience in the performance of the tasks they undertake." This doesn't mean that you can sue if your lawyer loses your case. You can sue only if he or she fails to render work or assistance of minimal competence and you are damaged as a result. You can also sue for malpractice when there is a breach of ethics (such as the failure to remit funds belonging to a client) in addition to suit for breach of contract and/or civil fraud.

Speak to another lawyer before embarking on any of these courses of action.

The following are examples of lawyer malpractice:

• settling a case without your consent
• procrastinating (e.g., neglecting to prepare a will and the client dies)
• charging improper fees
• failing to file a claim within the requisite time period (the statute of limitations)
• failing to competently and aggressively represent you in a criminal matter
• failing to inform you of a material point to your detriment (e.g., neglecting to advise you or failing to include language in a separation agreement giving the wife a portion of her husband's military pension in a divorce settlement in a community property state)

The vast majority of lawsuits never go to trial; they are discontinued or settled. However, every case that is tried has a loser, and the losing party must decide whether to appeal the decision. Talk to your lawyer immediately if you receive an unfavorable verdict. You have a limited period of time in which you can file a notice that you intend to appeal.

The appeals process works this way: Appeals judges read the transcript of the trial, together with legal documents (called "briefs"), to determine if the trial judge or jury erred in their decision. This rarely happens. Less than 20 percent of all criminal cases and 30 percent of all civil cases are reversed on appeal. However, some decisions are reversed. If you have spent several years and thousands of dollars pursuing or defending a valid claim, the additional money spent for an appeal may be worthwhile (particularly if the delay caused by the appeal process works to your advantage).

To evaluate the chances of a successful appeal, carefully reconstruct the reasons why you lost the case. You must also decide whether to hire your present lawyer or one who specializes in appeal matters. Although your lawyer is familiar with your case, there is much to be said for hiring a lawyer who makes his or her living writing briefs and arguing appeals.

Be certain you know how much the appeal will cost, and sign a new agreement that spells out lawyer fees, costs, and disbursements.