“Did my attorney charge me an unfair fee?”

Question: Alan, I have been in the process of suing my past employer based on an equal pay violation. Recently I attended my settlement/mediation hearing. Before this meeting I spoke with my attorney briefly in regard to my desired monetary outcome. At the time of our conversation and in an email I told him that I looked to him for his guidance on what he thought a fair number should be and I wanted to ensure that his attorney’s fees were covered, more importantly I expressed that I did not want to go to trial unless absolutely necessary and wanted to settle as quickly as possible (we had been in this painstaking process for years).

We did not speak immediately before the hearing but at the hearing he presented to the judge and the defendant a proposed settlement amount and then there was a discussion about his hourly rate etc. He was provided with a document of which I did not receive a copy. As he and I were outside discussing the possible outcome, we discussed the amount the judge thought would be “reasonable” and what my lawyer’s thoughts were if we went to trial. It was during this discussion my attorney indicated he felt that he spent too much time on the case to settle and that he would need to go to trial, UNLESS I agreed to pay him half of the settlement amount on the table. The amount he requested was double our original signed agreement (which was 25%).

I panicked – the thought of this dragging on any longer was inconceivable to me. To move this process along, I said that “I want to settle, and if the only way we can avoid a trial is for me to agree to change your fee, then fine”. When we went back into the courtroom, we had to confirm that we would not be asking for more money from my previous employer in the future and we also had to reveal to the judge the amount that I would be receiving from the settlement and the amount my attorney would be receiving (i.e. 50/50).

He is supposed to receive a check from my past employer and in turn, give me my portion. Now (2 days later) I am annoyed that my attorney would take the day of the settlement to “hold me up”. He changed the “rules” of our signed agreement because he felt he was not getting his fair share of the deal. More importantly, he knew that I wanted to get this finalized.

I had been ill for the past couple of days and I was not in the right frame of mind to make such a decision. The stress of the process, being in the courtroom with my previous employer, having a headache which made me feel like I couldn’t even see straight, and then him proceeding to tell me that he could not settle below a certain amount because he had too much time invested, led me to make a hasty decision to which I would never have agreed if all of these factors weren’t in play.

Is there anything I can do at this juncture to make my attorney honor the terms of his original contract (I am fine with the settlement amount we received from my past employer)? I really feel that my attorney should accept his payment based on our signed agreement. Is there anything I can do?

New York, New York

Question: Dear Disgruntled: 

It is unfortunate, but sometimes things don’t go well between attorneys and their clients. It is very unfortunate when attorneys act in improper or unethical fashion. While I do not know all of the facts of your matter, it seems to me that your attorney may have acted unethically. From the facts you presented, I cannot disagree with your feeling that you were “held up.”

Sometimes, cases settle quickly. If an attorney is working for a “percentage” or “contingency” fee, when that happens, the attorney gets paid a lot of money for not too much work. On the other hand, sometimes a case does not settle quickly. In that event, an attorney does an awful lot of work for the fee. Sometimes the case ends up with no recovery at all; in that case the attorney did a lot of work for no fee. No matter what, the attorney must honor his or her agreement with his or her client.

In every state I know of, there is an Attorney Ethical Rule that requires that an attorney does not charge or collect an “excessive” fee. What is “excessive?” That depends on a lot of factors. However, what happened to you makes me believe  he took advantage of you, and that the 50% your attorney now wants is, without question, on that basis alone, excessive, and therefore against the Attorney Ethical Rules.

Here is what I suggest:

a. First: Object to your Attorney, in writing, either by Email or Certified Mail, Return Receipt Requested. What you wrote to me, you should write to him, because you did a very good job of laying out the facts of what happened to you. Right now you need to make a written record of (i) what happened, (ii) your objection to it, and (iii) your bringing your objection to the attention of your attorney.  As an attorney, he will know exactly what you are doing, and this will – hopefully – make him carefully reconsider what he did. It is necessary for you to say, very clearly, “I believe you must honor our written agreement, and if you do not I will file a complaint against you with the Departmental Disciplinary Committee in the County in which your office resides.”  Hopefully, this will make him understand that he will not get away with anything improper.

If your attorney truly believes that his fee is proper, then you and he can both find out by the following steps. If he is not confident that what he did was proper, he would be wise to honor your initial agreed fee of just 25% of the settlement amount.
b. Second: You can file a Complaint against your attorney with what we call in New York the “Departmental Disciplinary Committee.” If you are unsuccessful in your effort to get your attorney to accept the 25% fee you and he initially agreed to, one step is to file a complaint against him with the agency that ensures ethical conduct by attorneys. In New York, there are several such committees; which one you should send your Complaint to depends on where your attorney’s office is located. However, if you call (212) 401-0800, Monday through Friday, 9:00 am to 5:00 pm, you can both get a Complaint Form and find out to which office to send your Complaint.

The Departmental Disciplinary Committees have the authority to address the matter, and punish, suspend or even disbar your attorney. They can also order him to return to you any excessive fee. I should add that, even if your attorney does decide to accept the originally agreed 25% fee, you have every right to file a Complaint against him, anyway, for what he tried to do to you.

c. Third: Disputes regarding legal fees, depending on the amount, may be legally required to be resolved by informal arbitration. New York legal authorities have required that legal fee disputes of a certain amount be arbitrated – that is, resolved informally, in which the client does not have to hire another attorney or go to court. You can ask the people at the Departmental Disciplinary Committee about this when you call, and how you can start that process if your dispute qualifies.

I am sorry to hear of what happened to you. Rest assured, though, that the law and the Attorney Ethical Rules do not let attorneys get away with the kind of thing you have described. My personal view is that attorneys are human, and whatever percentage of humanity acts unethically, probably the same percentage of attorneys do, too. However, attorneys are in a position to take advantage of people more than most other people are, and so we have special rules for their conduct. Unfortunately, there is no “honesty test” to get a license to practice law.

I’d very much appreciate it if you would let us know what happens here. I am confident that, if you follow the procedures above, you will end up being treated fairly. I really do mean that.

Hope this provides some good measure of reassurance. Please consider telling your friends about our blogsite. 

My best to you,
Al Sklover

© 2011 Alan L. Sklover, All Rights Reserved.