Fee Disputes and Why Lawyers Should Care
by Linda Oligschlaeger
There was a time when most of the general public held a high regard for doctors, clergy, lawyers, and most all professionals. Back then a client wouldn't even think about disputing a lawyer's fee, although most were simple, flat fees. This was also a time when most clients took pride in paying their just debts. If the means to pay was an issue, debts would often be paid by bartering in some fashion. Not all clients today maintain that same pride in paying their way.
Today, clients are not shy about making it known if they feel they've been unfairly charged by their lawyer. They're not likely to simply pay the bill especially when they perceive little value for the service. And, clients are not as intimidated by collection efforts even if it means facing a lawsuit especially if they believe they are right. Clients have armed themselves with information about their options, which may include a disciplinary complaint or malpractice action. The fact is: unresolved fee disputes contribute to the gloomy image of the legal profession, and the lawyer's reputation. Consequently,it's an important reason why lawyers' should care.
Common Reasons Why Fee Disputes Happen
"Betrayed", "let down", "taken advantage of", "cheated, just out for money" - these are harsh words often used by both sides - clients about lawyers and lawyers about clients when a fee disputes arises. So, how does a lawyer-client relationship deteriorate to this extent?
Some common reasons that may cause clients to dispute their lawyer's fee:
- Lack of a written fee agreement spelling out exactly how the client will be charged, or not clearly communicating the fee structure to the client
- Not clearly communicating the fee structure to the client even if there is a fee agreement
- Not regularly communicating with the cient concerning their matter
- Little perceived value - the outcome was not worth the cost
- Not billing regularly resulting in a "surprise" bill
- Not aggressively working on the client's case
- Perception that the lawyer has purposely "run up" the bill
What can (should) you do when a client disputes your fee?
The wrong answer is to ignore the issue even if the client has paid in advance. Suing clients for unpaid balances could also be the wrong answer, depending upon the circumstances. (Risk managers advise against suing for fees because they often trigger malpractice claims or disciplinary complaints.)
In the Bar's economic survey, the majority of lawyers responded that they handle fee disputes by negotiating with the client, which often results in an adjustment of the fee. That might be one of the right answers in some situations. Slow payment or the lack of payment by a client could also signal a client's concern about the fee. When a client disputes a fee or is slow to pay, it's certainly a time to review the file thoroughly and to do some self-examination. You may conclude that you poured your heart and soul into the matter, and the fee is justified. You might conclude that the client may have at least some justification for a fee adjustment. Or, you might conclude that you're on firm ground, but you would welcome a neutral view without consuming a lot of time or expense.
You might consider referring your client to the Bar's fee dispute resolution program as an alternative to suing your client and risking a disciplinary complaint or malpractice action. Fee dispute resolution programs are offered by The Missouri, and the Kansas City Metropolitan Bar Association at no cost to either party. The Missouri Bar's program offers mediation and binding arbitration, while the KCMBA program offers non-binding arbitration heard by a hearing panel. For more information, contact Lucas Boling, the program administrator at The Missouri Bar, at (573) 638-2276 or lboling@mobar.org.
What You Can Do
The next time you hear a cruel lawyer joke or you're teased about being a lawyer at a cocktail party you might consider what you as an individual can do. One by one you can help chip away at the dismal image of the legal profession by providing the best service possible to your clients, billing fairly, and resolving fee disputes when they occur. When it comes to fee disputes, both lawyers and clients do have options. And, lawyers should care.
Linda Oligschlaeger served as the Membership Services Director at The Missouri Bar from 1991-2012 where she administered the Fee Dispute Resolution Program.