RULES OF ENGAGEMENT: APPLYING THE DISCIPLINARY RULES TO YOUR PROBATE AND ESTATE PLANNING PRACTICE DON T COME TO MY OFFICE WITH SUING ME ON YOUR MIND ETHICAL ENGAGEMENT LETTERS Written and Presented by: R. HAL MOORMAN Moorman, Tate, Urquhart, Haley, Upchurch & Yates, L.L.P. 207 East Main Street P.O. Box 1808 Brenham, Texas 77834 Telephone: 979-836-5664 Fax: 979-830-0913 hmoorman@moormantate.com www.moormantate.com Presented by MARK D. WHITE, Amarillo Sprouse Shrader Smith State Bar of Texas 35 th ANNUAL ESTATE PLANNING AND PROBATE COURSE June 8-10, 2011 Fort Worth CHAPTER 27
TABLE OF CONTENTS I. INTRODUCTION AND WARNING.... 1 II. FEE CONTRACTS.... 1 A. The Attorney-Client Relationship.... 1 B. All Things Being Equal, The Lawyer Loses - Sometimes. Independent Attorney Review of Contract.... 3 C. Contract Construction... 3 D. Court Review of Attorney s Fees.... 4 1. General Rule... 4 2. Statutory Regulation... 4 3. Fraud and Breach of Fiduciary Duty... 4 4. An Unconscionable Fee or Breach of Fiduciary Duty... 4 5. No Attorneys Fees Allowed for Time Spent on Motion to Withdraw... 6 6. Modern Court s Review of Attorney s Fees... 6 7. Depositing Disputed Fee in an Escrow Account.... 6 8. Multi Plaintiff Litigation... 6 9. Contingent Fee Contract as Evidence of Reasonable Fee... 6 10. Non-Refundable Retainer or Prepayment of a Fee... 6 E. Alternatives to Billable Hour... 7 F. Matters to Think About Before Accepting Representation.... 7 1. Evaluate the Client Personally.... 7 2. Reasonableness.... 8 3. Motive.... 8 4. Willingness to Go to Trial.... 8 5. Ability to Accept the Rigors of Litigation.... 8 6. Mental Capacity.... 8 7. Financial Ability... 8 G. Understanding the Fee Agreement.... 9 H. Withdrawal-The Remedy for Failure to Pay or Cooperate.... 9 III. STATUTES, DISCIPLINARY RULES AND OTHER SOURCES OF REGULATION OF FEE CONTRACTS.... 9 A. Contingent Fee Contracts.... 9 B. General Attorney s Fees Provisions.... 10 C. Arbitration, Waiver of Jury Trial Mediation, Limitation of Liability, and Indemnity.... 10 D. Texas Disciplinary Rules of Professional Conduct (DR) and the RESTATEMENT.... 14 1. Limiting The Scope of Representation.... 14 2. Fees.... 14 3. Limitation of Liability and Releases.... 15 4. Conflict of Interest.... 16 5. Withdrawal.... 16 6. Security for Payment of Fees and Attorney s Lien.... 17 7. The Attorney s Common Law Lien.... 18 8. Payment for Fees Due After the Lawyer Withdraws.... 18 9. Withdrawal Without Good Cause.... 19 10. Adding Quantum Merit to Your Fee Contract in Contingent Fee Case.... 19 11. Costs and Attorney s Fees as Damages.... 20 12. Charging Interest and Using Credit Cards.... 20 13. Charging the greater of the fee that would be charged for the same circumstance on an hourly basis or a percentage of the amount recovered for the client.... 20 14. Notice of Complaints.... 21 15. The Texas Lawyers Creed.... 21 16. Third Party Guarantee of Fees.... 21 17. Referral Fees.... 22 18. Circular 230 Concerns.... 23 i
IV. DRAFTING TIPS.... 25 A. Examples.... 25 B. General Comments.... 25 1. Make the Contract Clear.... 25 2. Cover Every Contingency.... 25 3. Make it Fair.... 25 4. Add the Texas Lawyer s Creed.... 25 5. Complaint Notice... 25 6. Fee is Negotiable.... 25 7. Independent Attorney Review.... 25 8. Withdrawal.... 26 9. Conflicts of Interest.... 26 10. Sign the Agreement.... 26 11. Arbitration.... 26 12. Venue.... 26 13. Client Responsibilities.... 26 C. Hourly Rate Contracts.... 26 1. Be Specific.... 26 2. Interest.... 26 3. Credit Cards.... 26 4. Third Party Guarantee.... 26 5. Attorney s Fee Recovery by the Court.... 26 D. Contingent Fee Contracts.... 26 1. Put in Writing.... 26 2. Expenses and How to Calculate.... 26 3. Shifting to Higher Percentages Upon Specified Events.... 26 4. Calculation of the Recovery.... 26 5. Mixed Contingent and Hourly Fee.... 26 6. Don t Be Greedy... 26 7. Provide for Referral Fees.... 27 E. Estate Planning Contracts.... 27 1. State What You Will Do and How You Will Do It.... 27 2. Questions About The Family.... 27 3. Marriages.... 27 4. Financial Information.... 27 5. Other Questions... 27 6. Questionnaires.... 27 7. Estate Planning Engagement Letter.... 27 8. Representing Husband and Wife and Multiple Parties Joint Representation Advisory and Consent. 29 9. Representing Fiduciaries.... 30 10. Clients Under Disabilities.... 30 11. Lawyer as Intermediary.... 31 12. Dealing with Belt.... 32 V. CONCLUSION.... 32 APPENDIX A FIRM 1... 33 Litigation & General Matters Attorney Employment Contract Retainer Agreement... 33 Release Agreement... 35 APPENDIX B FIRM 2... 36 Contingent Fee Contract and Power of Attorney... 36 Legal Representation Engagement Letter... 41 ii
APPENDIX C FIRM 3... 43 Engagement Letter... 43 Assignment... 45 APPENDIX D FIRM 4... 47 Engagement Letter... 47 APPENDIX E FIRM 5... 49 Legal Representation Letter... 49 APPENDIX F... 50 Joint Representation Advisory and Consent... 50 Joint Representation Advisory and Consent Unmarried Couple... 51 APPENDIX G... 53 Estate Planning Representation Letter... 53 APPENDIX H... 63 Multi-Executor Conflict Waiver... 63 APPENDIX I... 65 Litigation Agreement... 65 APPENDIX J... 71 Estate Planning Engagement Letter... 71 APPENDIX K... 74 Letter to Beneficiaries When Representing Executor... 74 APPENDIX L... 75 Purpose of the Engagement Letters and Checklists... 75 APPENDIX M... 142 Script for Receptionist Estate Planning... 142 APPENDIX N... 143 Intermediary Agreement... 143 APPENDIX O... 144 Probate Contract... 144 APPENDIX P... 154 Thomas Baird Contract... 154 APPENDIX Q... 168 Fixed Fee Estate Planning Representation Agreement (Married Couple)... 168 APPENDIX R... 171 Fixed Fee Estate Planning Representation Agreement (Single Person)... 171 APPENDIX S... 173 ARCE Waiver/Arbitration Bonus Fee Agreement... 173 APPENDIX T... 177 Guardianship Fee Agreement... 177 iii
APPENDIX U... 180 Engagement Letter... 180 APPENDIX V... 182 I Don t Represent You Letter... 182 APPENDIX W... 183 Legal Services Employment Contract... 183 APPENDIX X... 186 Fee Proposal... 186 APPENDIX Y... 188 Policy Statement Regarding Billing and Payment Procedures... 188 APPENDIX Z... 197 Billing Terms... 197 APPENDIX AA... 202 Invoice for Professional Services Rendered... 202 APPENDIX BB... 203 New Engagement and Assignment Acceptance Dispute with Co, LLP... 203 APPENDIX CC... 207 Expert Witness Employment Contract... 207 BIBLIOGRAPHY... 209 iv