In this case, the retainer agreement will likely be rendered invalid. In medical malpractice cases, section 6146 requires a statement that the rates set forth are the maximum allowable rates, and the attorney and client are free to negotiate lower rates. See NYSBA Formal Opinion 719. %JcCY~{)Uu;4zgQZ\T ?LP}~v%-pq!LKwqcwrm5jj)t97iU!#ED~ 6Xrsradma'hY8zFhT*]Lg( Attorneys in Beach Whitman Cowdrey, LLP v. Robertson, Case No. Letter/Agreement 6 . Fee-for-service contracts, whether hourly or flat fee, are governed by section 6148. & Prof. C. 6147(b). , }`sW!G:Kr2GT4Br50CDPt *{P #u}I%j0'YIWg74Zfkni5>#L.tOUi,I'X;5?IM&a /}aH{iI* ~@E;H(rrK%h[WEzizjM$vC HA>~$~a: Ka:SSxpjtl5gg+G,0Gzw>0Ay It is important to ensure the client understands all components of the total fee calculation at the outset of the representation. Because a previous version of the statute referred to plaintiffs rather than clients, the statute had previously been limited to agreements to represent plaintiffs in litigation matters. & Prof. C. 6148(a). 4th at 371, the court held that the requirements of both section 6146 and section 6147 applied to a hybrid fee agreement. Given these demographics, it is no wonder many California attorneys seek to advertise their services to non-English speaking prospective clients. There is also a separate code section that sets out a fee limit schedule for medical negligence cases (section 6146). The attorney must tell the client in the retainer agreement itself whether costs will come off the top before the contingency rate is calculated or if the contingency rate will be calculated based on the gross recovery. separation agreements and court orders or judgments; all financial papers; and insurance policies. If there was no written retainer agreement, the debt could be based on an agreement you had over emails or something similar. A statement of how costs will affect the contingency rate. At the time the contract is entered into, the attorney shall provide a duplicate copy of the contract signed by both the attorney and the . When Fletcher filed suit to collect his share of the judgment, the question was raised as to whether a charging lien against a judgment or settlement was enforceable in the absence written consent from the client. Letter/Agreement 3 . In 1872, however, California adopted a public policy that promoted open competition, thus rejecting the common law rule of reasonableness. Sometimes, an attorney will find it necessary to obtain a lien against a clients interest as a means of securing payment of fees. Cal. Engagement Letter and Fee Agreement - Basic . Fee Splitting With Other Attorneys
California's Home Solicitation Sales Act - allows the buyer in almost any consumer transaction involving $25 or more, which takes place in the buyer's home or away from the seller's place of business, to cancel the transaction within three business days after signing the contract. 510 (App. An executory contract means that the contract terms have not yet been satisfied by one or both parties. & Prof. C. 6147-48. If any section of this Agreement is found to be invalid, illegal, or unenforceable, the rest of this Agreement will still be enforceable. Taking these precautions will work in your favor should a dispute arise, and will help prevent disputes from surfacing in the first place. The attorney is required to provide a fully executed copy of the agreement to the client at the time the contract is signed. Clients opposed on the basis that the fees being claimed were not reasonable under a lodestar analysis (despite the existence of a retainer contract with specified rates). & Prof. C. 6146 Cal. Client declares under penalty of perjury under the laws of the State of California that Client does not own more than one piece of real property, or one piece of real property with more than three units in it. This legal agreement allows customers to pay early for professional services that will be specified afterward. Cal. All fees for service contracts must contain the following provisions: Each of the above referenced Business & Professions Code sections also requires the attorney to give the client a fully executed copy of the retainer agreement. Unless you indicate the effect of a statutory award of attorneys fees in the retainer agreement, the award will automatically be credited toward the total amount owed by the client under the contract. 214 0 obj
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While an attorney's lien may be used to secure either an hourly fee agreement or a contingency fee agreement, hourly fee agreements purporting to create an attorney's lien must comply with Rule 1.8.1 of the California Rules of Professional Conduct. Because the companys equipment was the only source of income, Master Washer did not have cash to pay the Fletchers costs upfront. Rule of Professional Conduct 4-200(A) prohibits attorneys from entering into an agreement that calls for charging or collecting an illegal or unconscionable fee. Attorneys should also be aware that attorney charging liens fall within the ambit of California Rules of Professional Conduct Rule 3-300 which governs an attorneys acquisition of interests adverse to the client. See Fletcher v. Davis, 33 Cal.4th 61, 68 (2004). See Fletcher v. Davis, 33 Cal. A clear delineation of the services to be provided in this part of the retainer can be very important in heading off disputes as the representation progresses. Bus. Type of Insurance Case: LifeHealthAutoN/A, Shernoff Bidart Echeverria LLP is a Limited Liability Partnership, DOS AND DONTS FOR RETAINER AGREEMENTS: YOU CANT DO IT ON A HANDSHAKE. The absence of a signed fee agreement was not dispositive given the other circumstances of what was reached between attorneys and clients, with clients citing no authority for the proposition that a terminated attorneys destruction of a signed fee agreement with a client precludes the attorney from claiming the agreement existed, and from recovering fees and costs for the client pursuant to the terms of the agreement. (Slip Op., p. you need to retain the Law Offices of Ron A. Stormoen by a signed written retainer agreement. All amounts for time and charges are taken from the retainer, and the attorney should give you an accounting of activities each month, including the amount left on the retainer. E062781 (4th Dist., Div. If you are asking for a retainer deposit from your client, the engagement agreement should include language reminding the client that the retainer payment is not an estimate of what the total fee will be and that he or she will be responsible for any amounts owed over the amount of the deposit. 2. Despite these exceptions, the best practice is to always get a retainer agreement in writing. 4th 453, 462-63 (2004). . A true Ch. The firm primarily represents plaintiffs with a focus on legal malpractice cases. Only the service provider and the client are legally required to sign the document. Bus. The disclosure should be made in clear and simple terms so there is no question of the clients misunderstanding the nature and existence of the lien. App. 3d 153 (1979). If the requirements are not met, the lien will not be enforceable. (a).) As such, if the client voids the agreement, the attorney will no longer be entitled to a contingency fee, but only to a "reasonable fee." Gutierrez v. Girardi (2011) 194 Cal.App.4th 925; Flannery v. Prentice (2001) 26 Cal.4th 572.. ]?~=*2'$,*P(
4
=5[@"w;O2R?oj Spe"KmxH:H`c a0 ~2 In addition, lawmakers authorized courts to order restitutionary relief in instances where money was unlawfully, unfairly or fraudulently obtained from consumers in violation of section 17200. (Flahavan, et al., Cal. Conclusion
Charging Liens
However, there is no bright line test for unconscionablity. However, not all contingency fee agreements include costs as part of the contingency. What do California employers need to know about this new law? A client may Rules Governing the Use of Contingency Fee Contracts. & Prof. C. 6148(c.) Cal. Cannon & Nelms, APC v. St. Andrews Development Corp. Fee Clause Interpretation, Retainer Agreements: Broad Retainer Attorneys Fees Clause Encompassing Any Dispute Allowed For Fee Recovery In Legal Malpractice Action, GoTek Energy, Inc. v. SoCal IP Law Group, LLP, 4/3 DCA Trifecta: Appellate Court Issues Three Fee Unpublished Decisions, Goldenwest Plaza, LLC v. The Frank and Gertrude R. Doyle Foundation, Sanctions: Valtierra v. Wengs Enterprises, Bienert, Miller & Katzman PLC v. Patwardhan, Appealability/Retainer Agreements: Attorney Failing To Get Fee-Splitting Written Consents Knocked Out Of The Box, Arbitration/Retainer Agreements: July 2016 Issue Of Orange County Lawyer Has Interview With Orange County Bar Associations Mandatory Fee Arbitration Committee Co-Chairs, Retainer Agreements: Attorney Retainer Agreement Secured By Real Property Did Not Prevent Firm From Seeking Fraud-Based Fees From Client After Making Full Credit Bid, Retainer Agreement/Section 1717: Unsigned Retainer Agreement, With Explanation, Justified Fee Recovery By Attorney Under Civil Code Section 1717 Based Upon Dismissal Of Legal Malpractice Tort Claims. Again, in certain types of cases this decision is made by law. C. 1021.5. 11.) Attorneys who use such agreements, though, must ensure that each requirement contained in all statutes pertaining to fee agreements is met. The retainer agreement, also called the fee agreement or engagement letter, contains the terms for your engagement with the lawyer. Rptr.3d 58, (Cal. As the attorney works on your case, they will keep track of every letter written, every document researched, and every 10 minutes spent on your case. Performance Under Retainer Agreement, Retainer Agreements: 4/2 DCA Unpublished Decision Holds That B&P 6147 Voiding Of Contingency Agreement Is Subject To One-Year Legal Malpractice Statute Of Limitations, Ethics, Retainer Agreements: December 2020 Article In The Orange County Lawyer Has Nine Practical Tips To Increase Collections And Avoid Costly Fee Disputes, Retainer Agreements, Trade Secrets: In The Absence Of An Express Retainer Agreement Otherwise, Fees Earned Under Uniform Trade Secrets Act Belong To The Attorney, Not The Client, Retainer Agreements: Trial Court Erred In Narrow Interpretation Of Retainer Agreement That Did Not Hold Client Responsible For Unpaid Fees/Costs, Reasonableness Of Fees, Retainer Agreements: Lower Court Properly Denied Attorneys Fees And Costs For Winning $7,580 Against Ex-Client In Fee Collection Case, Retainer Agreements: Third District Rebuffs B&P 6147(b) Challenge To Related Matters Retention Language In Contingency Agreement, Deadlines, Retainer Agreements, Section 1717: 4/1 DCA Affirms $108,848.50 Attorney Fees Award To Prevailing Plaintiff Attorney For Work In Seeking Unpaid Fees And In Defending Against Former Clients Cross-Complaint, Arbitration, Nonsignatories, Quantum Meruit, Retainer Agreements: Judgment Confirming Arbitration Award Of $1,273,765.91 In Fees Owed To Two Law Firms Plus Another $508,678.82 For Fees And Costs Incurred In The Arbitration Affirmed, Liens For Attorney Fees, Retainer Agreements: Broad Retainer Lien Language Relating To A Lien For General Representation Did Allow For Attorneys Lien Claim Work, Liens For Attorney Fees, Retainer Agreements: ABAs Formal Opinion 487 Clarifies Successor Counsel Duties In Contingency Case To Notify Client About Potential Repercussions With Respect To Original Counsel, Ethics, Retainer Agreements: On Remand, Trial Court Properly Found Equitable Estoppel Did Not Alter The Rule Invalidating Fee Sharing Among Attorneys, Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler, Ethics, Retainer Agreements: California Supreme Court Decides That Undisclosed Conflict Of Interest Rendered Retention Agreement And Arbitration Award Unenforceable, But Remands For Trial Court To Consider If Quantum Meruit Recovery Was Permissible. Call us at 1-800-519-0562 to confirm your interest. Engagement Letter - Existing Client with New Matter . The attorney should clearly and explicitly describe to the best of his or her ability which services fall within the contract and which do not. In those situations, the client is first handed their copy and then asked to initial both the copy and the original in the attorneys presence. RETAINER AGREEMENTS If you are ready to collect your money. Arbitration Was Properly Ordered Because The Claims Between Client And The Two Law Firms Arose Out Of The Underlying Retainer And Arbitration Agreements Client Signed With The First Law Firm. Clients appeal of the fee recovery was unsuccessful on appeal. Formal Opinion") 440 (1976). A statement concerning the duties of the attorney and the client. (b). Without proof that the fee arrangement was disclosed to the client in writing and the client consented, the non-retained attorney will not be able to enforce the agreement. If the attorney is to be paid for defending a cross-complaint in a contingency fee case, or for undertaking post-judgment collection efforts, that compensation must be set forth clearly in the retainer agreement. (c).) A retainer is defined as a fee that a client pays upfront to an attorney before working for the client. See id. Client is aware that Client will not be entitled to compensation for any recovery obtained by attorneys on behalf of the General Public, and Client is aware that attorneys will be entitled to fees pursuant to California Code of Civil Procedure section 1021.5, for any recovery obtained on behalf of the General Public. All potential clients must waive the conflict before the attorney begins working on the case. Fee agreements in medical malpractice cases are addressed in Business & Professions Code 6146 (West 2013). It falls between a one-off-contract and a permanent employment contract . This becomes increasingly important should another dispute arise that requires separate representation for the client. Such agreements can work to the clients advantage by resulting in a lower overall fee, particularly if a case is settled early in the litigation process, while still ensuring the attorneys will receive some compensation for their efforts regardless of the ultimate outcome. In an expert witness retainer agreements, the parties (you, the expert, and your attorney client) delineate work expectations . However, attorney did say that he adopted a California State Bar template which had a fees clause allowing recovery to the prevailing party in any action or proceeding arising out of or to enforce any provision in the retainer agreement. So, in essence, the contractual terms prevailed unless the fees were unconscionable, which was not the case. If the retainer is 'pay for access', it will allow the client to services on a recurring basis for a set number (#) of hours every month. In contingency cases, many attorneys do not keep careful records of the time they put in. California Rules of Professional Conduct Rule 4-200(A)(3) does allow the attorney to make reimbursement for costs contingent upon the outcome of the litigation. & Prof. C. 6148(a)(1). The Court found a charging lien could significantly impair the clients interest by delaying payment of the recover or settlement proceeds until any disputes over the lien can be resolved. Conflicts
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Most lawyers have a reasonably clear understanding of what is required of them when they agree to represent a clientthey make sure to obtain a written Fee Agreement, signed by both attorney and client, defining the parties' respective rights and obligations with respect to the assignment. SAMPLE RETAI NER AGR EE M EN T W I LLI CK L A W G RO UP 3591 East Bonanza Road, Suite 200 Las Vegas, NV 89110-2101 AGREEMENT TO EMPLOY ATTORNEY This AGREEMENT TO EMPLOY ATTORNEY is entered into between X XX ("Client"), and the HSn@}]),{aHT*jQmca*bDT!-{srfYUyp{:IyY_39.0_N't"O@(EO'6|NV+,M'bZ]VDFL}k^xxZ =^E,Eye@13)4
Q>1"'B^V= See Huskinson & Brown v. Wolf, 32 Cal. This public policy is manifested in California Business and Professions Code Section 16600, which states: . It does not cover the work to prepare With respect to fee recovery for the dismissed tort claims, the appellate court found that the retainer fees clause was broad enough to encompass legal malpractice and fiduciary breach claims, all the more so given the arising out of languagedistinguishing this from more severe on the contract language cases. Waiver. For example, caps apply to cases on behalf of minors and federal tort claims. Box 6130 | Newport Beach, CA 92658 | 949.440.6700, Young Lawyers Division Education Programs, Expert Witness & Attorney Support Directory, Community Opportunities - How to Help with COVID-19 Relief Efforts, Italian American Lawyers of Orange County, Orange County Asian American Bar Association, Orange County Criminal Defense Bar Association, Orange County Korean American Bar Association, Centennial - Reaching Toward the New Millennium, Centennial - From Frontierland to Tomorrowland, December 2013 - Requirements for Client Retainer Agreements, http://www.ocbar.org/forms/facebook.asp?article=1207. 0 found this answer helpful | 0 lawyers agree Helpful Unhelpful 0 comments Sagar P. Parikh View Profile 136 reviews Avvo Rating: 9.3 Business Attorney in Beverly Hills, CA Reveal number Private message 1. In some cases, the authors have included an acknowledgement in the retainer agreement for the client to initial to indicate they have received a copy. The fee is deemed earned upon payment, and no other payment shall be due unless called for by this agreement or by separate agreement. Retainer Agreements: ABA Formal Opinion 475 Explains How To Treat Received Fees Where Different Attorneys Have Disparate Interests In The Funds, Deadlines/Equity/Retainer Agreements: Invalid Attorney-Client Retention Agreement Meant Attorney Collection Suit Was Subject To 2-Year Quantum Meruit Statute Of Limitations, Retainer Agreements: 15-Day Objection Clause Found Unenforceable By 4/3 DCA. It is best practice to make sure the client clearly understands this issue. Summary Judgment Reversed Based On Alliance Credit Bid Fraud Exception. 6 May 18, 2016) (unpublished) likely were bummed when the lower court granted a summary judgment in ex-clients favor and also awarded ex-client $61,208 based on an attorneys fees clause in a retainer agreement securing the payment of attorneys services under a deed of trust against clients real estate. Consequently, the Court held that the oral retainer agreement was unenforceable. As with all contractual agreements, you should always get a retainer agreement in writing. A _LF
PIROgyRpUWUHP,k&JBXALRF3R*"o^L-fr{\744).ua;_O*DZ81I1mR|}O/c5vh3f`?6 }qc=] Because defendants cousin, who was not a party to the underlying action, verbally agreed to pay defendants fees, the retainer agreement contained a Payment by Other Party clause that allowed the firm to invoice and collect from cousin, and held defendant responsible for any fees/costs not paid by cousin. On the ethics of expert fee arrangements, compensation of expert witnesses, and the recovery of expert fees as costs, check out CEB's California Trial Practice: Civil Procedure During Trial 4.43-4.44 , 16.48-16.49 , 27.59 . (Fletcher v. Davis, supra, 33 Cal.4th at p.67.). California Rules of Professional Conduct Rule 3-410 requires attorneys to disclose to their clients at the time of the engagement, in writing, the lack of professional liability insurance. Retainer agreements are usually entered into between attorneys and clients in contingent fee cases. California, the only state that has not adopted the model rules, contains a similar provision in its rules of professional conduct. A true retainer is a retainer that is paid solely for the purposes of ensuring the availability of the member, a definition which was adopted by the California Supreme Court in Baranowski v. State Bar, 24 Cal. This made sense because lodestar analysis is really aimed at what, The Third District, drawing from analogous reasoning in. 600 S. Indian Hill Blvd Ex-attorney did comply with the MFAA by participating in the MFAA arbitration and then demanding contractual arbitration, as allowed under, The attorney sued based on the retainer agreement and an implied-in-fact agreement that further work was encompassed within the retainer terms (the latter theory permissible under section 6148(d)(2)). Cal. Free Consultation: (800) 553-8082 . Attorneys should exercise billing judgmentwriting off hours and reflecting that in billings for both the benefit of the client and a possible future fact finder. Posted at 12:28 PM in Cases: Arbitration, Cases: Retainer Agreements | Permalink & Prof. C. 17200, et seq Cal. In order to be able to enforce a charging lien, the attorney must disclose the lien provisions to the client in writing, and advise the client of the opportunity to seek independent legal counsel. Keep your agreements healthy and your practice happy by subjecting them to an annual checkup. Attachment A: Sample Fee Agreement Forms: Instructions and Comments (Clean and Redline) agreement. Without proof that the fee arrangement was disclosed to the client in writing and the client consented, the non-retained attorney will not be able to enforce the agreement. These are maximums, and the attorney and client are free to negotiate lower rates. This Agreement supersedes any other written or verbal communications between the Parties. Earned On Receipt Fee Agreement . In an interesting twist, the attorney conceded not having an original fee agreement because it had been purged after the malpractice statute of limitations had expired. If this is not done, the client will have the option to void the agreement. 1. Be sure to indicate what the fee percentage(s) are, whether the agreement includes an hourly rate component, statutory fees, or any other expenses that a client will be liable to pay. That section requires a written agreement in all cases where it is reasonably foreseeable that the total fee will exceed $1,000. To get a refund for your lawyer's retainer fee, you need to know that there are two types of retainer fees: Earned retainer fees; Unearned retainer fees; You also need to know the difference between an operating and a trust account. 2013) at 5:283. This writing should be referred to in the retainer, but should be separate from the retainer itself. A clear statement about the nature of the conflict, and an explanation as to the attorneys inability to favor one client over another in the event the potential conflict does arise, are musts. While there is more to a calculation of the reasonable value of services than the normal hourly rate multiplied by the number of hours spent, being forced to prove the reasonable value of services in a contingency matter is generally more difficult if the attorney is unable to show how much time was spent on the case. Anytime an attorney represents multiple clients, the clients must be apprised of any potential conflicts in writing at the outset of the litigation. Often, an attorney will request some type of security, such as a lien against the clients cause of action or a promissory note to real property as a guarantee on the clients promise to pay. HTMo0W>b>+UC!X" Attorneys who fail to adhere to the statutory requirements will not be given any slack from a court or arbitrator in the event of a dispute. Just recently, in Fletcher v. Davis (2004), 33 Cal.4th 61, Cal. A reasonable non refundable retainer can probably exceed the attorney's normal hourly rate for whatever time the attorney spent actually spent giving advice, etc. The leading decision on Rule 2-200 is by the California Supreme Court in Chambers v Kay (2002) 29 Cal.4th 142. For example, you may want to disclose that any statutory recovery of attorneys fees does not relieve a client of his or her own obligation to pay. Retainer Fee: A retainer fee is an upfront cost incurred by an individual in order to pay for the services of a consultant, freelancer , lawyer or something similar. When the terms of the retainer agreement are agreed upon by all parties, it's time to sign the agreement. Posted at 08:52 PM in Cases: Retainer Agreements, Cases: Section 1717 | Permalink Tuesday, October 26, 2021. If the attorney expects to be reimbursed for costs regardless of the outcome, a clear and prominent statement to that effect should be included in the section of the retainer dealing with costs. endstream
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Alpert, Goldberg, Butler, Norton & Weiss v. Quinn, 410 N.J. Super. This should be as clear and detailed as possible. hj0_Ert- J6c-KGVGDMYICKn}VDI JRM) '-40+ry _m+l]Drmr5HU2BIJ1!GLuJXP Section 6148 applies to all California attorney fee retainer agreements. Compliance with the rule's requirements is particularly important to the non-retained attorney. If the attorney is not going to handle such matters as part of the retainer agreement, or if no additional compensation is to be paid, that should also be clearly set forth. The purpose of the agreement is to protect both parties. & Prof. Code, Sec. Cal. 85 0 obj
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In enacting the law, legislators sought to protect all California consumers by permitting actions to be brought on behalf of the general public and by giving courts the authority to enjoin businesses from further engaging in unfair competition. After the agreement has been signed, it's time for the client to pay the retainer amount. If a matter is particularly risky or complicated, a higher contingency fee may well be justified and reasonable. A recently enacted California law will require companies to refrain from including such provisions in most instances. 301 N. Canon Drive #200 Not only will specificity on this issue enable the attorney to comply with the statute, it will also help avoid disputes with the client later. (Bus. Comments (0), 2008-2009-2010-2011-2012-2013-2014-2015-2016-2017-2018 Marc Alexander & William M. Hensley, The Law Firm of Kallis & Associates v. Padgett, The trial court confirmed the award and denied a petition to vacate it, determinations affirmed on appeal. Toll Free: (800) 458-3351 However, the majority then remanded to the trial court to determine the equitieswhether the conflict of interest was egregious and intentional enough to preclude quantum meruit recovery. This contract is enforceable but is not yet considered executed. 6148, subd. If coverage lapses during the representation, the client must be informed in writing. Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler, 212 Cal. If rates for different people within those categories are different, this should be clearly explained. Although the client received a written retainer agreement from Fletcher reflecting the terms of the fee contract agreed upon, including the lien agreement, the contract was never executed by the client. After subsequent counsel obtained a favorable judgment for the company in the conversion action, Master Washer entered into a stipulated disbursement of the judgment. The attorney contended that the provision constituted a legitimate waiver of the client's right to statutory arbitration. 17200, et seq.). If you already have a judgment. 6148, subd. View Our Terms of Use - Privacy Policy. What You Need to Know About Alternative Means of Securing Payment. You must be given a copy. Arnall v. Superior Court, 190 Cal. The core provision of AB 749 specifically prohibits "an agreement to settle an . However, it is also important to note more specific items such as whether the client will locate or select an expert, or whether the attorney or client will advance funds to pay the bill for extraordinary expenses. [{MS0muopc It is alluded to in the Rule Ainsley quoted. 68 0 obj
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Because Section 6148 expressly allows a client to void a fee contract if the statutory requirements of the retainer are not satisfied, it is crucial to comply with the rules. HTMo0#hW"c]{P,~g8hfgObq R|jEt_dn3=Y;*2lB0QxX\$L|/$2 Therefore, the remedies available to an injured party under section 17200 are limited to injunctive and restitutionary relief and do not include compensation for attorney costs and fees. There is no practical reason the same analysis would not apply to any other statutory requirements. A statement of the rate to be charged, whether hourly, flat fee, statutory fee, costs, or any other charges that can reasonably be anticipated. . However, in the course of their practice, the authors still run across uninsured attorneys whose fee agreements fail to alert the clients to their status. Always get your clients informed consent to a retainer agreement in writing. | It is unethical for family law attorneys to fail to present to you, and sign, a retainer fee agreement.