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Rules of Professional Conduct |
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What follows are the primary provisions in the Florida Bar Rules of Professional Conduct dealing with attorneys fees. These rules govern all Florida lawyers.
RULE 4-1.5 FEES FOR LEGAL
SERVICES
(a) Illegal, Prohibited, or Clearly Excessive
Fees. An attorney shall not enter into an
agreement for, charge, or collect an illegal, prohibited, or clearly excessive
fee or a fee generated by employment that was obtained through advertising or
solicitation not in compliance with the Rules Regulating The Florida Bar. A fee
is clearly excessive when:
(1) after a review of the facts, a lawyer of
ordinary prudence would be left with a definite and firm conviction that the fee
exceeds a reasonable fee for services provided to such a degree as to constitute
clear overreaching or an unconscionable demand by the attorney; or
(2) the fee is sought or secured by the attorney by
means of intentional misrepresentation or fraud upon the client, a nonclient
party, or any court, as to either entitlement to, or amount of, the fee.
(b) Factors to Be Considered in Determining
Reasonable Fee. Factors to be considered
as guides in determining a reasonable fee include:
(1) the time and labor required, the novelty,
complexity, and difficulty of the questions involved, and the skill requisite to
perform the legal service properly;
(2) the likelihood that the acceptance of the
particular employment will preclude other employment by the lawyer;
(3) the fee, or rate of fee, customarily charged in
the locality for legal services of a comparable or similar nature;
(4) the significance of, or amount involved in, the
subject matter of the representation, the responsibility involved in the
representation, and the results obtained;
(5) the time limitations imposed by the client or by
the circumstances and, as between attorney and client, any additional or special
time demands or requests of the attorney by the client;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, diligence, and
ability of the lawyer or lawyers performing the service and the skill,
expertise, or efficiency of effort reflected in the actual providing of such
services; and
(8) whether the fee is fixed or contingent, and, if
fixed as to amount or rate, then whether the client's ability to pay rested to
any significant degree on the outcome of the representation.
(c) Consideration of All Factors.
In determining a reasonable fee, the time devoted to the representation and
customary rate of fee need not be the sole or controlling factors. All factors
set forth in this rule should be considered, and may be applied, in
justification of a fee higher or lower than that which would result from
application of only the time and rate factors.
(d) Enforceability of Fee Contracts.
Contracts or agreements for attorney's fees between attorney and client will
ordinarily be enforceable according to the terms of such contracts or
agreements, unless found to be illegal, obtained through advertising or
solicitation not in compliance with the Rules Regulating The Florida Bar,
prohibited by this rule, or clearly excessive as defined by this rule.
(e) Duty to Communicate Basis or Rate of Fee to
Client. When the lawyer has not regularly
represented the client, the basis or rate of the fee shall be communicated to
the client, preferably in writing, before or within a reasonable time after
commencing the representation.
(f) Contingent Fees.
As to contingent fees:
(1) A fee may be contingent on the outcome of the
matter for which the service is rendered, except in a matter in which a
contingent fee is prohibited by subdivision (f)(3) or by law. A contingent fee
agreement shall be in writing and shall state the method by which the fee is to
be determined, including the percentage or percentages that shall accrue to the
lawyer in the event of settlement, trial, or appeal, litigation and other
expenses to be deducted from the recovery, and whether such expenses are to be
deducted before or after the contingent fee is calculated. Upon conclusion of a
contingent fee matter, the lawyer shall provide the client with a written
statement stating the outcome of the matter and, if there is a recovery, showing
the remittance to the client and the method of its determination.
(2) Every lawyer who accepts a retainer or enters
into an agreement, express or implied, for compensation for services rendered or
to be rendered in any action, claim, or proceeding whereby the lawyer's
compensation is to be dependent or contingent in whole or in part upon the
successful prosecution or settlement thereof shall do so only where such fee
arrangement is reduced to a written contract, signed by the client, and by a
lawyer for the lawyer or for the law firm representing the client. No lawyer or
firm may participate in the fee without the consent of the client in writing.
Each participating lawyer or law firm shall sign the contract with the client
and shall agree to assume joint legal responsibility to the client for the
performance of the services in question as if each were partners of the other
lawyer or law firm involved. The client shall be furnished with a copy of the
signed contract and any subsequent notices or consents. All provisions of this
rule shall apply to such fee contracts.
(3) A lawyer shall not enter into an arrangement
for, charge, or collect:
(A) any fee in a domestic relations matter, the
payment or amount of which is contingent upon the securing of a divorce or upon
the amount of alimony or support, or property settlement in lieu thereof; or
(B) a contingent fee for representing a defendant in
a criminal case.
(4) A lawyer who enters into an arrangement for,
charges, or collects any fee in an action or claim for personal injury or for
property damages or for death or loss of services resulting from personal
injuries based upon tortious conduct of another, including products liability
claims, whereby the compensation is to be dependent or contingent in whole or in
part upon the successful prosecution or settlement thereof shall do so only
under the following requirements:
(A) The contract shall contain the following
provisions:
(i) "The undersigned client has, before signing
this contract, received and read the statement of client's rights and
understands each of the rights set forth therein. The undersigned client has
signed the statement and received a signed copy to refer to while being
represented by the undersigned attorney(s)."
(ii) "This contract may be cancelled by written
notification to the attorney at any time within 3 business days of the date the
contract was signed, as shown below, and if cancelled the client shall not be
obligated to pay any fees to the attorney for the work performed during that
time. If the attorney has advanced funds to others in representation of the
client, the attorney is entitled to be reimbursed for such amounts as the
attorney has reasonably advanced on behalf of the client."
(B) The contract for representation of a client in a
matter set forth in subdivision (f)(4) may provide for a contingent fee
arrangement as agreed upon by the client and the lawyer, except as limited by
the following provisions:
(i) Without prior court approval as specified below,
any contingent fee that exceeds the following standards shall be presumed,
unless rebutted, to be clearly excessive:
a. Before the filing of an answer or the demand for
appointment of arbitrators or, if no answer is filed or no demand for
appointment of arbitrators is made, the expiration of the time period provided
for such action:
1. 33 1/3% of any recovery up to $1 million; plus
2. 30% of any portion of the recovery between $1
million and $2 million; plus
3. 20% of any portion of the recovery exceeding $2
million.
b. After the filing of an answer or the demand for
appointment of arbitrators or, if no answer is filed or no demand for
appointment of arbitrators is made, the expiration of the time period provided
for such action, through the entry of judgment:
1. 40% of any recovery up to $1 million; plus
2. 30% of any portion of the recovery between $1
million and $2 million; plus
3. 20% of any portion of the recovery exceeding $2
million.
c. If all defendants admit liability at the time of
filing their answers and request a trial only on damages:
1. 33 1/3% of any recovery up to $1 million; plus
2. 20% of any portion of the recovery between $1
million and $2 million; plus
3. 15% of any portion of the recovery exceeding $2
million.
d. An additional 5% of any recovery after
institution of any appellate proceeding is filed or post-judgment relief or
action is required for recovery on the judgment.
(ii) If any client is unable to obtain an attorney
of the client's choice because of the limitations set forth in subdivision
(f)(4)(B)(i), the client may petition the court in which the matter would be
filed, if litigation is necessary, or if such court will not accept jurisdiction
for the fee division, the circuit court wherein the cause of action arose, for
approval of any fee contract between the client and an attorney of the client's
choosing. Such authorization shall be given if the court determines the client
has a complete understanding of the client's rights and the terms of the
proposed contract. The application for authorization of such a contract can be
filed as a separate proceeding before suit or simultaneously with the filing of
a complaint. Proceedings thereon may occur before service on the defendant and
this aspect of the file may be sealed. A petition under this subdivision shall
contain a certificate showing service on the client and The Florida Bar in
Tallahassee. Authorization of such a contract shall not bar subsequent inquiry
as to whether the fee actually claimed or charged is clearly excessive under
subdivisions (a) and (b).
(C) Before a lawyer enters into a contingent fee
contract for representation of a client in a matter set forth in this rule, the
lawyer shall provide the client with a copy of the statement of client's rights
and shall afford the client a full and complete opportunity to understand each
of the rights as set forth therein. A copy of the statement, signed by both the
client and the lawyer, shall be given to the client to retain and the lawyer
shall keep a copy in the client's file. The statement shall be retained by the
lawyer with the written fee contract and closing statement under the same
conditions and requirements as subdivision (f)(5).
(D) As to lawyers not in the same firm, a division
of any fee within subdivision (f)(4) shall be on the following basis:
(i) To the lawyer assuming primary responsibility
for the legal services on behalf of the client, a minimum of 75% of the total
fee.
(ii) To the lawyer assuming secondary responsibility
for the legal services on behalf of the client, a maximum of 25% of the total
fee. Any fee in excess of 25% shall be presumed to be clearly excessive.
(iii) The 25% limitation shall not apply to those
cases in which 2 or more lawyers or firms accept substantially equal active
participation in the providing of legal services. In such circumstances counsel
shall apply to the court in which the matter would be filed, if litigation is
necessary, or if such court will not accept jurisdiction for the fee division,
the circuit court wherein the cause of action arose, for authorization of the
fee division in excess of 25%, based upon a sworn petition signed by all counsel
that shall disclose in detail those services to be performed. The application
for authorization of such a contract may be filed as a separate proceeding
before suit or simultaneously with the filing of a complaint, or within 10 days
of execution of a contract for division of fees when new counsel is engaged.
Proceedings thereon may occur before service of process on any party and this
aspect of the file may be sealed. Authorization of such contract shall not bar
subsequent inquiry as to whether the fee actually claimed or charged is clearly
excessive. An application under this subdivision shall contain a certificate
showing service on the client and The Florida Bar. Counsel may proceed with
representation of the client pending court approval.
(iv) The percentages required by this subdivision
shall be applicable after deduction of any fee payable to separate counsel
retained especially for appellate purposes.
(5) In the event there is a recovery, upon the
conclusion of the representation, the lawyer shall prepare a closing statement
reflecting an itemization of all costs and expenses, together with the amount of
fee received by each participating lawyer or law firm. A copy of the closing
statement shall be executed by all participating lawyers, as well as the client,
and each shall receive a copy. Each participating lawyer shall retain a copy of
the written fee contract and closing statement for 6 years after execution of
the closing statement. Any contingent fee contract and closing statement shall
be available for inspection at reasonable times by the client, by any other
person upon judicial order, or by the appropriate disciplinary agency.
(6) In cases in which the client is to receive a
recovery that will be paid to the client on a future structured or periodic
basis, the contingent fee percentage shall be calculated only on the cost of the
structured verdict or settlement or, if the cost is unknown, on the present
money value of the structured verdict or settlement, whichever is less. If the
damages and the fee are to be paid out over the long term future schedule, this
limitation does not apply. No attorney may negotiate separately with the
defendant for that attorney's fee in a structured verdict or settlement when
separate negotiations would place the attorney in a position of conflict.
(g) Division of Fees Between Lawyers in Different
Firms. Subject to the provisions of
subdivision (f)(4)(D), a division of fee between lawyers who are not in the same
firm may be made only if the total fee is reasonable and:
(1) the division is in proportion to the services
performed by each lawyer; or
(2) by written agreement with the client:
(A) each lawyer assumes joint legal responsibility
for the representation and agrees to be available for consultation with the
client; and
(B) the agreement fully discloses that a division of
fees will be made and the basis upon which the division of fees will be made.
(h) Credit Plans.
Charges made by any lawyer or law firm under an approved credit plan shall be
only for services actually rendered or cash actually paid on behalf of the
client. No higher fee shall be charged and no additional charge shall be imposed
by reason of a lawyer's or law firm's participation in an approved credit plan.
STATEMENT OF CLIENT'S RIGHTS
FOR CONTINGENCY FEES
Before you, the prospective client, arrange a
contingent fee agreement with a lawyer, you should understand this statement of
your rights as a client. This statement is not a part of the actual contract
between you and your lawyer, but, as a prospective client, you should be aware
of these rights:
1. There is no legal requirement that a lawyer
charge a client a set fee or a percentage of money recovered in a case. You, the
client, have the right to talk with your lawyer about the proposed fee and to
bargain about the rate or percentage as in any other contract. If you do not
reach an agreement with one lawyer you may talk with other lawyers.
2. Any contingent fee contract must be in writing
and you have 3 business days to reconsider the contract. You may cancel the
contract without any reason if you notify your lawyer in writing within 3
business days of signing the contract. If you withdraw from the contract within
the first 3 business days, you do not owe the lawyer a fee although you may be
responsible for the lawyer's actual costs during that time. If your lawyer
begins to represent you, your lawyer may not withdraw from the case without
giving you notice, delivering necessary papers to you, and allowing you time to
employ another lawyer. Often, your lawyer must obtain court approval before
withdrawing from a case. If you discharge your lawyer without good cause after
the 3-day period, you may have to pay a fee for work the lawyer has done.
3. Before hiring a lawyer, you, the client, have the
right to know about the lawyer's education, training, and experience. If you
ask, the lawyer should tell you specifically about the lawyer's actual
experience dealing with cases similar to yours. If you ask, the lawyer should
provide information about special training or knowledge and give you this
information in writing if you request it.
4. Before signing a contingent fee contract with
you, a lawyer must advise you whether the lawyer intends to handle your case
alone or whether other lawyers will be helping with the case. If your lawyer
intends to refer the case to other lawyers, the lawyer should tell you what kind
of fee sharing arrangement will be made with the other lawyers. If lawyers from
different law firms will represent you, at least 1 lawyer from each law firm
must sign the contingent fee contract.
5. If your lawyer intends to refer your case to
another lawyer or counsel with other lawyers, your lawyer should tell you about
that at the beginning. If your lawyer takes the case and later decides to refer
it to another lawyer or to associate with other lawyers, you should sign a new
contract that includes the new lawyers. You, the client, also have the right to
consult with each lawyer working on your case and each lawyer is legally
responsible to represent your interests and is legally responsible for the acts
of the other lawyers involved in the case.
6. You, the client, have the right to know in
advance how you will need to pay the expenses and the legal fees at the end of
the case. If you pay a deposit in advance for costs, you may ask reasonable
questions about how the money will be or has been spent and how much of it
remains unspent. Your lawyer should give a reasonable estimate about future
necessary costs. If your lawyer agrees to lend or advance you money to prepare
or research the case, you have the right to know periodically how much money
your lawyer has spent on your behalf. You also have the right to decide, after
consulting with your lawyer, how much money is to be spent to prepare a case. If
you pay the expenses, you have the right to decide how much to spend. Your
lawyer should also inform you whether the fee will be based on the gross amount
recovered or on the amount recovered minus the costs.
7. You, the client, have the right to be told by
your lawyer about possible adverse consequences if you lose the case. Those
adverse consequences might include money that you might have to pay to your
lawyer for costs and liability you might have for attorney's fees, costs, and
expenses to the other side.
8. You, the client, have the right to receive and
approve a closing statement at the end of the case before you pay any money. The
statement must list all of the financial details of the entire case, including
the amount recovered, all expenses, and a precise statement of your lawyer's
fee. Until you approve the closing statement you need not pay any money to
anyone, including your lawyer. You also have the right to have every lawyer or
law firm working on your case sign this closing statement.
9. You, the client, have the right to ask your
lawyer at reasonable intervals how the case is progressing and to have these
questions answered to the best of your lawyer's ability.
10. You, the client, have the right to make the
final decision regarding settlement of a case. Your lawyer must notify you of
all offers of settlement before and after the trial. Offers during the trial
must be immediately communicated and you should consult with your lawyer
regarding whether to accept a settlement. However, you must make the final
decision to accept or reject a settlement.
11. If at any time you, the client, believe that
your lawyer has charged an excessive or illegal fee, you have the right to
report the matter to The Florida Bar, the agency that oversees the practice and
behavior of all lawyers in Florida. For information on how to reach The Florida
Bar, call 850/561-5600, or contact the local bar association. Any disagreement
between you and your lawyer about a fee can be taken to court and you may wish
to hire another lawyer to help you resolve this disagreement. Usually fee
disputes must be handled in a separate lawsuit, unless your fee contract
provides for arbitration. You can request, but may not require, that a provision
for arbitration (under Chapter 682, Florida Statutes, or under the fee
arbitration rule of the Rules Regulating The Florida Bar) be included in your
fee contract.
_____________________ _____________________
Client Signature Attorney Signature
_____________________ _____________________
Date Date
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