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IBA: Eliminate Surprises; Use Caution and Care When Changing Fee Agreements

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Bell James Bell

By James J. Bell

It’s a typical case and the potential client and you have agreed to a flat fee of $10,000 for the entire representation. However, as the case trudges through the system, the case requires more work than expected. You should get paid for the extra work, right?

You awkwardly approach the client, explain the situation and ask for an additional $5,000. There is a pause and then a smile creeps across your client’s face. “Of course you can have an additional $5000!” the client exclaims. After all, the client loves you. He agrees that the case has become a bear, that you are doing an outstanding job and that you have earned even more than the requested $5,000. In fact, he is willing to give you $6,000.

The client dives for his checkbook and hastily writes you a check. You memorialize the entire transaction in writing, it is signed by your client and the additional $6,000 is yours. Just to make sure there are no hard feelings, the client even gives you a hug. Everyone is happy. So there is no way you just violated the Rules of Professional Conduct, is there?

Unfortunately, you have violated the Rules if you failed to advise the client to seek the advice of independent legal counsel before agreeing to the new fee agreement and if you did not otherwise fulfill the requirements of Rule 1.8(a) pertaining to “business transactions” with your client. Some lawyers may be surprised to learn that changing a fee in the middle of a case is considered a “business transaction” by our Supreme Court and Disciplinary Commission. However, because you are about to endure this entire article, you will not be one of those “surprised lawyers.”

The first “surprising” aspect of Rule 1.8(a) is that it never specifically mentions anything about the modification of a fee agreement. That language is reserved for the Comment. Furthermore, the language pertaining to modifications of a fee agreement does not appear in the Comment to the Model Rules of Professional Conduct and therefore, it is unlikely you were taught this topic in law school or tested on this subject on the MPRE. Aren’t surprises wonderful?

The language of Comment states that 1.8(a) “applies when a lawyer seeks to renegotiate the terms of the fee arrangement with the client after representation begins in order to reach a new agreement that is more advantageous to the lawyer than the initial fee arrangement.” Comment to 1.8[1]. To be clear, Rule 1.8(a) “does not apply to ordinary initial fee arrangements between client and lawyer” because there is no established attorney-client relationship. Id. However, once a trusting relationship is established, the Comment to 1.8(a) serves to curb the “possibility of overreaching” by sophisticated lawyers. Id.

So if you still want to change the fee to one that is more advantageous to you, then you must follow 1.8(a) to the letter. This includes “advising the client in writing of the desirability of seeking… the advice of independent legal counsel” and giving the client “informed consent, in a writing signed by the client.” See Rule 1.8(a)(2) and (3) of the Indiana Rules of Professional Conduct. “Informed consent” is a term of art and it is defined in Rule 1.0(e).

Must your client actually get advice from another lawyer? No. The client just has to be advised in writing that it is a good idea to do so. If you are really doing a good job for your client and have truly earned the additional fee, there is no reason to fear that independent counsel will inadvertently interfere with your relationship with your client.

What if the new deal is not more “advantageous” to the lawyer? My advice is to follow 1.8(a) anyway. The practice of law is unpredictable. Cases that are certain to go to trial often settle on the courthouse steps. Difficult transactions can turn out to be simpler than anticipated. When the unexpected happens, it is difficult to look backwards and assess whether a new fee was more “advantageous” to the lawyer. If you follow 1.8(a) before the unexpected happens, you will not have to quibble about who got the better deal.

Unfortunately, if you care about your clients and your reputation, there are many ways to have sleepless nights while engaging in the practice of law. Avoiding the surprises and pitfalls of 1.8(a) is one way to avoid a few of those sleepless nights.•

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  1. Call it unauthorized law if you must, a regulatory wrong, but it was fraud and theft well beyond that, a seeming crime! "In three specific cases, the hearing officer found that Westerfield did little to no work for her clients but only issued a partial refund or no refund at all." That is theft by deception, folks. "In its decision to suspend Westerfield, the Supreme Court noted that she already had a long disciplinary history dating back to 1996 and had previously been suspended in 2004 and indefinitely suspended in 2005. She was reinstated in 2009 after finally giving the commission a response to the grievance for which she was suspended in 2004." WOW -- was the Indiana Supreme Court complicit in her fraud? Talk about being on notice of a real bad actor .... "Further, the justices noted that during her testimony, Westerfield was “disingenuous and evasive” about her relationship with Tope and attempted to distance herself from him. They also wrote that other aggravating factors existed in Westerfield’s case, such as her lack of remorse." WOW, and yet she only got 18 months on the bench, and if she shows up and cries for them in a year and a half, and pays money to JLAP for group therapy ... back in to ride roughshod over hapless clients (or are they "marks") once again! Aint Hoosier lawyering a great money making adventure!!! Just live for the bucks, even if filthy lucre, and come out a-ok. ME on the other hand??? Lifetime banishment for blowing the whistle on unconstitutional governance. Yes, had I ripped off clients or had ANY disciplinary history for doing that I would have fared better, most likely, as that it would have revealed me motivated by Mammon and not Faith. Check it out if you doubt my reading of this, compare and contrast the above 18 months with my lifetime banishment from court, see appendix for Bar Examiners report which the ISC adopted without substantive review: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS

  2. Wow, over a quarter million dollars? That is a a lot of commissary money! Over what time frame? Years I would guess. Anyone ever try to blow the whistle? Probably not, since most Hoosiers who take notice of such things realize that Hoosier whistleblowers are almost always pilloried. If someone did blow the whistle, they were likely fired. The persecution of whistleblowers is a sure sign of far too much government corruption. Details of my own personal experience at the top of Hoosier governance available upon request ... maybe a "fake news" media outlet will have the courage to tell the stories of Hoosier whistleblowers that the "real" Hoosier media (cough) will not deign to touch. (They are part of the problem.)

  3. So if I am reading it right, only if and when African American college students agree to receive checks labeling them as "Negroes" do they receive aid from the UNCF or the Quaker's Educational Fund? In other words, to borrow from the Indiana Appellate Court, "the [nonprofit] supposed to be [their] advocate, refers to [students] in a racially offensive manner. While there is no evidence that [the nonprofits] intended harm to [African American students], the harm was nonetheless inflicted. [Black students are] presented to [academia and future employers] in a racially offensive manner. For these reasons, [such] performance [is] deficient and also prejudice[ial]." Maybe even DEPLORABLE???

  4. I'm the poor soul who spent over 10 years in prison with many many other prisoners trying to kill me for being charged with a sex offense THAT I DID NOT COMMIT i was in jail for a battery charge for helping a friend leave a boyfriend who beat her I've been saying for over 28 years that i did not and would never hurt a child like that mine or anybody's child but NOBODY wants to believe that i might not be guilty of this horrible crime or think that when i say that ALL the paperwork concerning my conviction has strangely DISAPPEARED or even when the long beach judge re-sentenced me over 14 months on a already filed plea bargain out of another districts court then had it filed under a fake name so i could not find while trying to fight my conviction on appeal in a nut shell people are ALWAYS quick to believe the worst about some one well I DID NOT HURT ANY CHILD EVER IN MY LIFE AND HAVE SAID THIS FOR ALMOST 30 YEARS please if anybody can me get some kind of justice it would be greatly appreciated respectfully written wrongly accused Brian Valenti

  5. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

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