THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, January 10, 1995 TAG: 9501100307
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY MARC DAVIS, STAFF WRITER
LENGTH: Medium: 98 lines
The lawyers demanded $3.4 million for nine months' work. The client laughed in their faces.
The lawyers complained that they were fired unfairly. The client, a new Lotto millionaire, said the lawyers deserved nothing.
It was easily the most expensive lawyer-fee dispute of 1994, and probably the ugliest. It took a Chesapeake judge three months to untangle the billing mess.
Now, one month after this nasty feud played out in Chesapeake Circuit Court, local lawyers are creating arbitration panels to resolve fights over lawyer fees.
More than a dozen panels are being created throughout Virginia, including ones in Virginia Beach and Norfolk.
The State Bar hopes this will eliminate one of the most common sources of complaints about lawyers. Last year, the bar received 2,599 complaints of lawyer misconduct. It is impossible, however, to determine how many stemmed from fee disputes.
``A lot of those complaints are made where there really is no ethical violation; there is a fee dispute,'' said Beverly J. Bach, a Fairfax lawyer and chairman of the State Bar's fee-dispute committee.
Norfolk lawyer Michael A. Glasser saw the problem firsthand during three years on the Norfolk district disciplinary board, from 1989 to 1992.
``Many of the complaints were not ethical problems,'' Glasser said, ``and I assume that didn't start or end when I was there. I noticed some of the complaints were just civil matters'' between lawyers and clients.
The problem, Glasser said, is that some lawyers are afraid to put fee agreements in writing in advance. Many clients are afraid to ask for such agreements.
``Some lawyers fear clients may be put off by that, but it does lessen the chance of problems down the road,'' Glasser said. ``I think much of the public is mystified by what lawyers do and how much they charge.''
How much is a lawyer's time worth? It depends on whom you ask.
Many lawyers charge contingency fees - usually 33 percent or 40 percent - collected only if they win, mainly in personal-injury cases. Lawyers say such an arrangement is the only way a poor or middle-class family can afford to enter court.
Other lawyers charge flat fees for specific services, and lists of charges are available at some legal clinics and law offices. Others charge hourly rates.
About 25 years ago, the bar published fee guidelines for the public, and most lawyers complied. Clients didn't complain.
``People tended to accept what was fair and reasonable in the eyes of the attorney,'' said Glen A. Huff, a Virginia Beach lawyer who chairs the fee-dispute committee of the Norfolk and Portsmouth Bar Association.
Now, clients have to shop around for the best price. Even then, it's impossible to know what is a good deal. ``How a consumer makes that determination, there is no objective way I'm aware of,'' Huff said.
For now, there are only two arbitration panels in Virginia for lawyer-fee disputes - one in Fairfax, the other in Alexandria.
The Fairfax panel has been around since 1981. It gets about 10 complaints a month, but most never go to hearings. ``Most people just want to tell somebody about their problem, and once they do that they're satisfied,'' Bach said.
In Fairfax, only a dozen arbitration hearings were held last year. The rest were settled. Still, the panel does get some strange cases, Bach said.
In one case, a lawyer left his firm, then returned to his former partners for some business advice. He assumed the advice was free. It wasn't. The firm billed the ex-partner, and he screamed foul. The arbitration panel ordered him to pay the fee.
In another case, a woman who owned some radio stations refused to pay lawyer bills sent to her personally. She said the radio stations owed the bills, about $25,000. The case was settled.
Most disputes are simple misunderstandings about what kind of work is covered and how much will be charged, Glasser said. Clients should always ask their lawyers three questions before they begin, he said:
What will you do for me?
What are the prospects of success?
What is the cost?
``I think they are very fair questions to ask the lawyer out of the box,'' Glasser said. ``It's a very simple concept. Fee agreements with clients ought to be in writing.'' MEMO: To file a complaint about lawyer misconduct with the Virginia State
Bar, call (804) 775-0500.
ILLUSTRATION: GUIDELINES
Disputes about lawyers' fees sometimes arise because lawyers are
afraid to put fee agreements in writing in advance and clients are
afraid to ask for such agreements, says Norfolk lawyer Michael A.
Glasser. To avoid such problems, Glasser suggests asking the
following basic questions of a prospective lawyer:
What will you do for me?
What are the prospects of success?
What is the cost?
by CNB