July 1993, Question 4 [Professional Responsibility]
Attorney's refusal to perform
Duty of care: L shall represent the client with the legal knowledge, skill, thoroughness and preparation reasonably necessary. L may not withhold work for nonpayment of fees.
Permissive withdrawal: L may request withdrawal from representation where there is no material adverse effect to the client. L must give reasonable notice (ABA rule).
Attorney has threatened to stop providing legal services to Wife if she does not pay her outstanding bill for the work he has provided for her on her divorce case. Here, since Wife has failed to pay fees, attorney may request withdrawal from the court provided such withdrawal does not materially harm wife's case.
Attorney has already performed $1000 in legal services, but it is unclear what stage of litigation the proceedings are at. If the case is in an early stage, withdrawal may be less harmful than if the case is close to trial. Wife's financial problems may also prevent her from hiring another attorney, which could materially harm her case. However, she told Attorney she had decided to retain another lawyer so perhaps not. Attorney's threat not to perform puts Wife at unfair disadvantage, which is contrary to her interests. The proper steps to withdraw would have been for Attorney to give her notice and request withdrawal from the court, which Attorney did not do here so he is subject to discipline.
Attorney's request for 25% additional payment
Generally, L may not have a proprietary interest, or stake in a cause of action. However, contingency fees may be allowed subject to the following limitations.
Contingency fees in domestic cases:
ABA rule prohibits.
ABA Code rarely allows.
California rule only prohibits if it causes marriage to break up. Such an agreement must be in writing with the percentage clearly identified.
Attorney fees must be reasonable. Unconcionable fees are prohibited.
Here, Attorney seeks 25% of Wife's property settlement, which is essentially a contingency fee in a divorce case since Attorney is representing Wife in divorce proceedings.
Under the ABA rule this is not allowed in any circumstances.
Thus, as to the contingency fee: ABA: subject to discipline. Cal: acceptable. As to the unreasonable fee: Subject to discipline.
However, under California rules, a contingency fee is acceptable so long as it does not cause a salvageable marriage to break up. Since the couple was already engaged in a divorce proceeding and Wife had already engaged in a divorce proceeding and Wife had already incurred $11,000 in legal bills before the idea of a contingency fee payment scheme was proposed, this fee structure would likely be acceptable since it would likely not be contributing to the marriage's demise. However, such an agreement is required to be in writing and here, Attorney "stated" his proposal so the writing requirement is not satisfied, assuming this proposal becomes their fee agreement.
Wife still owes Attorney $5,000 in fees, and Attorney wants payment of the $5,000 and an additional 25% of any property settlement Wife receives in the divorce. While the size of the estate is unclear, Attorney has refused to perform further services for Wife without receiving a substantial part of the property settlement. This creates an overall compensation package that is unreasonable and unconscionable and subjects Attorney to discipline.
Retention of files
L who withdraws must return all of client's papers and property, even if owed money. Attorney must return Wife's client file so she can continue her case. Attorney may not refuse to do so until he is paid. Attorney improperly informed Wife he would not return her file without the payment of fees, which is a clear ethical violation, and Attorney is subject to discipline. Subject to discipline.
Malpractice
ABA rule: L may not agree to limit L's liability to the client without advising the client in writing to seek independent legal counsel regarding settlement. ABA Code and California rules do not allow L to prospectively limit liability to a client. Here, Attorney's attempt to have Wife sign a general release of liability is an ethical violation since L may not attempt to limit malpractice liability unless the client is advised in writing to seek independent legal counsel. Attorney failed to advise Wife in writing to seek outside legal counsel before obtaining a release of liability, as is required and Attorney is subject to discipline.
February 1993 Question 5 [Torts] [Professional Responsibility]
July 1993 Question 6 [Wills] [Professional Responsibility]