Attempted Unreasonable Fee Draws Reprimand

The Vermont Supreme Court affirmed findings that an attorney had attempted to charge an unreasonable fee and failed to reduce the fee agreement to writing. The court imposed a public reprimand and probation.

The attorney represented the client in two family court matters. The client suffered a serious and permanent injury on a trampoline. The client obtained a Burlington lawyer for the ensuing high-risk personal injury action. The retained attorney brought in an out-of-state specialist in such cases. The two entered into a written fee sharing agreement.

The client discussed the trampoline case with the attorney, who facilitated communication with Burlington lawyer. Matters were complicated by the client’s ongoing divorce, a matter in which the Burlington lawyer represented his wife. As a result, the client wanted the attorney to help in asking the Burlington lawyer to withdraw from the domestic case. A meeting was arranged.

The attorney agreed to do so for 12% of the gross recovery from the trampoline case. He continued to charge by the hour for the domestic case. While the chances of recovery were slim, the payoff potential was significant.

The agreement was never reduced to writing. While the attorney did facilitate communication, he did little else. When the case settled for $682,500, he would have been entitled to $81,900 for such services.

The court found the fee unreasonable:

…the hearing panel concluded that because complainant’s case required specialized legal skills and legal experience and contained a high degree of risk of no recovery, an overall high contingent fee for the legal team in complainant’s case was not unreasonable.  As related particularly to respondent, however, the panel concluded that his communication role did not justify such a large fee. 

 We discern no clear error in the panel’s finding.  Under the above-listed [Rule 1.5] factors, respondent’s agreed-upon services provided an insufficient basis for such a large percentage of complainant’s recovery.  Respondent’s role did not require a large investment of time or labor.  In addition, although he is an experienced lawyer, his tasks did not require specialized legal knowledge or legal experience.  Further, facilitating communication would not preclude respondent from accepting other employment.  The fee was excessive compared to the work that respondent was to perform…

Respondent attempts to distinguish his fee from other cases involving unreasonable fees on the bases that in his case his recovery was not certain, he performed useful work, and he did not ultimately bill complainant for his time and therefore caused no harm to his client.  The risk of no recovery was not enough to justify respondent’s fee.  In addition, we have already considered the nature of respondent’s work and do not find that it warranted a significant fee.  Respondent’s role was to facilitate communication.  No extensive legal work, specialized research, or preparation of legal documents was required.  We reject respondent’s contention that there was no violation because he caused no harm to his client.  The extent of harm caused is a factor to be considered at the sanction phase of our analysis…

The court found it irrelevant that the attorney did not actually bill the client for the 12%. (Mike Frisch)