Flat Fee Agreements for Arizona DUI cases
My name is Gordon Thompson and today is July 4, 2016. The topic for today’s podcast is flat fees for DUI cases.
Types of Retainer Agreements
Contingent Fee Agreements
In Arizona there are basically three types of retainer agreements that lawyers can use. The first of which is a contingent fee agreement; under the terms of which the lawyer’s fee is contingent upon the outcome of the case. This is most commonly used in connection with personal injury cases and is unethical to use in a criminal case, and so therefore cannot be used for a DUI case.
Hourly Fee Agreements
A second type of fee agreement is an hourly fee agreement; under which the client agrees to pay the attorney so much per hour of the attorney’s time, as well as the attorneys’ support staff time, and costs as the case goes along. Quite commonly as a part of that there is a retainer paid upfront, and then the attorney pays him or herself as the work is done. These days for DUI cases hourly fee agreements are very rare and so I will spend the rest of this podcast talking about what is the most common type of fee agreement, namely, a flat, nonrefundable, earned-upon-receipt fee agreement.
Flat Nonrefundable Earned-Upon-Receipt Fee Agreements
A flat, nonrefundable, earned-upon-receipt fee agreement is exactly that. It is a flat fee, meaning it is for the entire representation on the case. Unlike hourly fee agreements it’s not dependent upon how many hours the lawyer puts into the case. So, for example, if the lawyer has to spend far more time than he or she thought they were going to have to spend on the case then they’re out of luck, because the fee is for the total case regardless of how long it takes to do it.
It is nonrefundable, although there’s limitations on this which I’ll talk about in a couple minutes, nonrefundable because if the case is concluded more quickly than the client had thought that does not mean the client gets a refund. They may be entitled to a refund; but basically the agreement is a nonrefundable one and so the amount of time the lawyer puts into it, by itself, doesn’t mean the client is entitled to a refund.
It is earned upon receipt which means that as soon as the client pays the fee to the attorney the money is the attorney’s money and is no longer the client’s money. Where this is different, in an hourly agreement where the client pays a retainer agreement upfront, the money the client pays upfront remains the client’s money and has to be in the attorney’s trust account until the attorney’s actually done work to earn it. On a flat, nonrefundable, earned-upon-receipt fee agreement the money is the attorney’s as soon as he or she receives it, and it goes into their operating account.
There are basically two ways attorneys do DUI cases with flat fee agreements. The first of which is a flat fee agreement for the whole case, meaning it starts at the beginning of the case or when the attorney starts representing the client on the case, and includes representation on the entire case. A second way to do a flat fee agreement, and the way that many lawyers do it, is they do the case in parts. Those attorneys in effect say, “I will start the case and I will do it up to the point where you would have to decide whether to plead guilty or set the matter for trial; and if you want to set the matter for trial that will be an additional fee for trial”. Many lawyers do that; I do not do that because I do not think it’s in a client’s best interest to do that; there are many times when we need to set cases to trial, even though we may not plan to do a trial, because it’s in the client’s best interest to set the matter for trial. Or, many times it’s in the client’s best interest to do a trial, and money considerations should not be the deciding factor. For these agreements the fine point in the trial fee is, “per trial”, meaning if there is a mistrial, often with a hung jury, the client has to pay an additional trial fee. Almost all fee agreements end representation at dismissal or sentencing and so appeals are not included.
Again I do not charge trial fees because I do not think it’s in the client’s best interest to charge trial fees. Many times when we have to set cases to trial, even though we may not be doing a trial, but it’s in the client’s interest to set the matter for trial to get a better offer. In some cases it is clearly in the client’s best interest to do a trial I do not think money considerations should be the deciding factor so I don’t do that now with any type of the fee agreement that charges trial fees.
The costs are something the client is responsible for. In the context of a DUI case costs would be for such things as those for an expert witness to review our records of testing blood, retesting blood test samples or to testify at trial.
The Arizona Supreme Court has rules that apply to fee agreements. First off the agreement must be in writing and the client must be given a copy of the agreement. This doesn’t mean the client has to sign the agreement, however, but the client fee agreement must be in writing.
The second point is the agreement has to spell out what the scope of the representation is, namely what case or cases the attorney is representing the client on. For example, if client has two cases, one in Glendale one in Surprise, then does the fee agreement cover both cases and just one? As is more common for DUI cases there is often both a criminal case and a motor vehicle proceeding arising from the same incident. Does the fee agreement cover both the criminal case as well as the motor vehicle proceedings, or not? Again the fee agreement has to state in writing what is the scope of the agreement.
Third, if the agreement is a nonrefundable, earned upon receipt fee agreement (flat fee agreement) there has to be a notice to the client in writing that they may at any time cancel the fee agreement, subject to court rules, and if they do cancel the agreement they may be entitled to a refund. This has to be told to the client in writing at the time they enter into the agreement and if it’s not in the agreement the agreement is unethical. This clause has to be in there so clients knows that if, for example, a client comes in and pays me $3000 for a case on a Monday and a couple days later they have second thoughts and want to cancel the agreement, I should not be able to keep that $3000. Under those circumstances, for a quick cancellation like that the client may not realize they can get a refund, they may think, “well I am stuck with this lawyer, even though I don’t want to stay with this lawyer, because I’ve paid him.” That is why the Arizona Supreme Court says the client must be told this in writing at the time they enter into the fee agreement.
Many fee agreements including mine have a provision that if there is a dispute about reasonableness of the fee, the agreement is subject to arbitration with the State Bar. It very easy for a client to request arbitration. They can file a petition with the State Bar saying they want to have the fee arbitration.
All fee agreements, whether they are flat fees or they are hourly fee agreements, or contingent fee agreements, are subject to a test of reasonableness. The Supreme Court has set forth the factors to be considered in deciding whether a particular fee is reasonable for the case. Once the client’s representation is over the lawyer’s obligation is to review the money actually paid by the client to make sure that it meets this reasonable test. Factors the Supreme Court says should be considered are the time the attorney spends on the case, resources such as support staff used on the case, what is the outcome of the case, how difficult was the case, and several other factors. So even though an agreement is a flat, nonrefundable, earned upon receipt fee agreement, it is still subject to the reasonableness test at the end of the case, and the client may be entitled to a refund. If a client does not think the fee was reasonable they can always request arbitration with the State Bar.
Gordon Thompson’s Flat Fee Agreement for DUIs.
So these basically are the different fee agreements, and the one that’s most common in DUI cases is the flat fee agreement and is the type of fee agreement I used for DUIs. There is a copy of my standard flat fee agreement on my website.
If you have any questions about flat fees for DUI cases please call me. Thank you.