When you hire an attorney, you will likely sign a fee agreement ranging anywhere from a page to a dozen pages (or more!). In spite of the seemingly excessive terms and conditions – all of which have a purpose, even if that purpose isn’t inherently obvious – most clients are primarily concerned with the fee that they will be paying to their attorneys. (You should always ask if there is a provision of a fee agreement you do not understand, even if it seems inconsequential.)
Generally speaking, the fee that you pay to your attorney will take one of three primary forms: (1) flat fee, (2) hourly fee, or (3) contingency fee. There is a fourth way to structure a fee agreement, combining any two of flat fee/hourly/contingency into a “hybrid” agreement.
Attorney fee agreements must be fair, reasonable, and fully explained to the client. (Alderman v. Hamilton (1988) 205 Cal.App.3d 1033, 1037.) Attorneys also have a “professional responsibility to make sure clients understand their billing procedures and rates.” (Severson & Werson v. Bolinger (1991) 235 Cal.App.3d 1569, 1573.) An attorney may not recover a fee in excess of that which was explained to the client, and to which the client has consented. (Id.) Moreover, an attorney may not charge an unconscionable fee. (Cal. Rules. Prof. Conduct 4-200.)
Before addressing fee structures, it is also important to note that another component of your attorney-client fee agreement is the “costs” portion of the agreement. Costs include everything from court filing fees to deposition transcripts to faxes, copies, and postage. Some attorneys, generally on contingency fee cases, will pay the costs (or “front” the costs), to be reimbursed at the conclusion of the case. I will front costs on occasion, however a wise attorney (and past president of the San Diego County Bar Association) once advised me that it is important for clients to “have a stake” in the outcome of the case, and to pay costs as a case proceeds. I have heeded this advice, and have found that it is important for clients to understand, and pay, the costs as they are incurred.
One final note on costs: as indicated above, some attorneys will charge for faxes and copies, on top of their other fees and costs. To me, such charges are nickel-and-diming the client, and are excessive. Yes, attorneys incur costs for faxes and copies, but those costs are negligible. When the client is charged $1.00 per page for these services, the costs are no longer negligible, but rather are a revenue stream for the attorney. (If there are 1,000 pages of discovery in your case, at $1.00 per page the attorney could buy 33 reams of paper (at $30/ea.) for the $1,000 you have paid for your two reams ($60) of paper.)
As far as fee structures are concerned, criminal cases are generally charged on a flat fee basis. Based upon the allegations leveled against you, the skill and experience required to defend those charges, and amount of time that will likely be required, the attorney will decide how much he/she is going to charge to defend you to the conclusion of your matter. The fee is generally required to be paid up front, and if the matter resolves the day after you pay your fee or a year later, you still pay the same fee. Flat fees in civil cases are rare.
An attorney may take a case on a contingency, generally 25% to 40% of the gross recovery, if it appears to be a case of clear liability and if the damages are ascertainable and adequate to compensate both client and attorney. Generally speaking, civil plaintiff’s cases can be taken on a contingency basis. Defense cases generally are not suitable for a contingency as there is no prospective recovery at the conclusion of the case. Similarly, certain cases, such as breach of contract cases, may have multiple prospective goals, including but not limited to monetary recovery. Therefore, plaintiff’s breach of contract cases are often taken on an hourly basis.
Civil defense cases and certain categories of civil plaintiff’s cases – including breach of contract cases, as set forth above – are generally taken on an hourly basis. Hourly fees generally run from $200-750, depending on the experience level and subject matter expertise of the lawyer. Hourly fee cases are generally charged in 6-minute (or 0.1/hour) increments. Some lawyers will bill in minimum 0.2 (7-12 minutes) or even 0.3 (13-18 minutes) increments, meaning that reviewing an email or talking briefly to opposing counsel is going to cost you several times the actual time spent. My belief is that fees should be billed in 0.1 (0-6 minute) increments; similarly, if you are told that you will be billed in 0.1 increments and then your bill reflects all charges of 0.2 or greater, the attorney has misrepresented how you will be charged and, in my opinion, is guilty of misrepresenting the terms of the agreement, and also of charging an unconscionable fee.
Finally, some cases may call for a unique, hybrid fee arrangement. Generally this will take of the form of a reduced hourly rate (say, half of the attorney’s standard rate) plus a reduced contingency percentage (again, half or thereabouts) of the gross recovery at the conclusion of the case. I saw one fee agreement in which the attorney, on a false arrest case, charged a hybrid fee of $350/hr. plus 40% of any recovery. In other words, there was no reduction in either the attorney’s hourly or his contingency, leading to the strong likelihood that the attorney would bill in excess of the value of the case. I have taken hybrid cases when there is a possibility (but not a strong likelihood) of recovery at the end of the case, and in cases where there is both a defense component and offense component to the case, which can occur in breach of contract litigation.
If you have a concern about the fee your attorney is going to charge you, you should either ask your attorney or seek out alternative representation. If it feels like your attorney is looking at you as a blank check, and/or if you receive a bill and realize that the attorney saw you as a blank check, then it’s probably in your best interest to seek alternative representation.
Law firms have a structure. On any given case, you will likely have a senior partner, junior partner/senior associate, and an associate assigned to your case. Each has billable hour requirements. There is also likely to be a paralegal and/or legal secretary working on your case. The odds are that 60-70 percent of the substantive work on your case is going to be handled by the lowest rung on the ladder, i.e., the associate. The junior partner/senior associate is likely to do 20-30% of the work, and the senior partner will likely do anywhere from 0-10% of the work.
When you hire a law firm, you generally hire the senior partner. The senior partner has his name on the firm’s letterhead and trophies of his successes on the wall. And then you sign the fee agreement and shake the senior partner’s hand, oftentimes speaking to the senior partner for the last time. The junior partner/senior associate takes over the big picture handling of your file, and the junior associate – trying to make his or her billable hour requirement in order to make senior associate or junior partner – gets tasked with the day-to-day operation of the file.
Law firms make money by billing, and therefore law firms tend to be really good at billing. Some cases may be complex enough to require a team of lawyers and the built-in support of a law firm; most are not. It is not uncommon for a law firm to bill $30,000 – 40,000 per month on a file. While that sounds like a lot, at a rate of $300/hr., that is roughly half-time for the junior associate assigned to your file.
I am a sole practitioner. I have resources available to me as needed, including experienced contract lawyers (i.e., lawyers who will pick up projects on short notice) and paralegal support. But for the most part, every facet and aspect of my practice has my hands on it. When you call, I answer. When you email, I respond, and generally very quickly. If more than 24 hours have elapsed since you called or emailed and I did not respond then I am not doing my job. I do get very busy, and I do get very wrapped up in deadlines and discovery and research and all of the other things that constitute the practice of law. I shouldn’t ever get so busy that I cannot timely respond to calls or emails.
If I were to be in the process of hiring a lawyer, it would be very important to me that the lawyer I hire be the lawyer who is going to work on my case. It would be very important that the lawyer I hire be the lawyer who is responding to my calls or emails. Personally, I do not care to have a call or an email pawned off to someone else tasked with responding. (The thought just went through my head that when I get big I will probably rue the day I composed this blog, but my structure is a choice and it’s the right choice for me.) To me, the fundamental question you should ask me is whether I have the resources to handle your case. If it’s too complex I will tell you so, and I will refer you on to a firm that bills ethically and has the structure to competently handle your case. Otherwise, in my opinion you are much better off with the sole practitioner who has low overhead and no billable hours requirement than the firm with the marble floors that requires its associates and junior partners to bill 200 hours per month.
As I offer a free 45-minute consultation, I am happy to discuss structure further with you if that is a concern. I would also like to note, in closing, that I do not charge clients for telephone calls between the client and I, as it is my belief that a client should be free to call with a question or concern, or to provide information to me that will help me with his or her case. Ask the big firms if they do that!
A civil deposition is sworn testimony under oath, often taken in a lawyer’s office or at the offices of a court reporting firm. In a civil deposition, a court reporter takes down everything that is said in the room, later producing a booklet with questions, answers, and objections that reads like a play or a manuscript. A deposition may be videotaped as well, generally if a witness is going to be unavailable at trial or if the attorney noticing the deposition believes the witness is going to lack credibility.
Each deposition is its own separate event, meaning that only one witness can be questioned per deposition. If the witness has an attorney, that attorney will “defend” the deposition. Defending a deposition means objecting to questions posed by the questioning attorney; the artful counselor will also attempt to coach his or her witness as necessary during the course of a deposition, however coaching (or making speaking objections) is expressly forbidden and is to be avoided. Sanctions can issue for the defending attorney who impedes, coaches, or counsels on the record during a deposition proceeding.
The witness being questioned may be questioned by an attorney from one party or many parties, but never multiple attorneys for the same party. More important than the deposition itself is the pre-deposition meeting that occurs between an attorney and his or her client. Attorneys generally know in advance whether a client is going to present as a good witness. The questioning attorney – the attorney who has noticed the deposition – is looking for two things from the witness: (1) the witness’s testimony, and (2) whether the witness will present as credible and sympathetic to a jury. The witness’s appearance and manner are taken into consideration by the questioning attorney, and part of deposition preparation (“depo prep”) is to ensure that all angles, including appearance and manner, have been addressed.
Some witnesses need a lot of preparation time, whether to refresh on facts or to learn to provide concise answers. Lawyers tend to ask very precise questions. One of the biggest mistakes a deponent can make is to try to anticipate where a lawyer is going with a question and to answer “the next question.” Most lawyers are competent enough to ask the next question. Most. A witness needs to answer the question pending and to let the questioning lawyer listen, process, and proceed.
For lawyers, the intent of a deposition is to box the witness’s testimony. Expert witnesses, many of whom have been deposed hundreds of times, tend to engage in a cat-and-mouse game whereby they refuse to commit to a response. While it is primarily younger lawyers who allow witnesses to control the course of a deposition, I have reviewed deposition transcripts by highly respected lawyers who have been in the game for over 40 years (i.e., longer than I have been alive!) who have failed to nail down critical testimony. There is nothing worse than preparing for trial and realizing that you have obtained testimony that is ambiguous and that cannot be used to impeach a witness. The deposition transcript is very expensive kindling at that point.
The legal system is very difficult to navigate without a lawyer. There are numerous deadlines and tricks and traps to avoid. If you are representing yourself and trying to minimize costs, at a minimum it is wise to hire a lawyer for the express purposes of defending your deposition. You need to anticipate that a lawyer is going to need time to review the file, to interview you, to prepare you, and to sit in at your deposition. The preparation time could exceed the actual time that you are testifying under oath, but in my opinion you will find that it is money well-spent and will likely end up saving you a lot more than it costs you.
Many people believe that large, international corporations could not possibly structure their businesses with the intent to deprive consumers of benefits to which the consumers are rightfully entitled. To put it another way, on its face it may seem difficult to believe many major insurance companies do their best to ensure that you will never get paid if and when you file a claim.
In every contract there is an implied covenant of good faith and fair dealing. In the case of first party disputes between and insured and his/her/its insurer, the insurer must not take an unreasonable stance on the validity of a defense nor investigate the claim with a conscious disregard of facts which might support coverage. (Beck v. State Farm Mut. Auto Ins. Co. (1976) 54 Cal.App.3d 347, 354; and Delgado v. Heritage Life Ins. Co. (1984) 157 Cal.App.3d 262, 276-278.) Under California law, the gravamen of the wrong in a first party bad faith action is the unreasonable refusal to pay all benefits due under the terms of the policy. (Paulfrey v. Blue Chip Stamps (1983) 150 Cal.App.3d 187, 192.) An insurer may also be liable for bad faith if it unreasonably delays payment on a claim. The exception to this rule is if the insured fails to cooperate. (Globe Indemnity Co. v. Superior Court (1992) 6 Cal.App.4th 725.)
While insurers (smartly) have proved hesitant to cooperate with the discovery process, my colleagues and I have unearthed some very damning and valuable information over the years. One major insurer incentivized its adjusters to deny claims, and kept statistics on its adjusters’ denial rates. Bonuses were offered for higher rates of denial. Another large insurance company instructed its adjusters to deny mold claims based upon a faulty reading of its own policy, and even after the courts had found that such a reading was improper.
Insurance companies work off of probabilities, and some insurers have taken the position that it’s easier to deny claims initially and overpay on bad faith claims than it is to just pay valid claims in the first place. The rationale works like this: if Insurer X denies 10 claims valued at $100,000 apiece, and it knows that only 1 of 10 people are going to sue for bad faith, and on a bad faith claim it may pay anywhere from $100,000 to $400,000, in the long run making 10 denials in bad faith results in profits of $600,000 to $900,000. (Not to mention, in delaying payment on that claim by 12-24 months, the insurer has the benefit of collecting interest on those funds during the time of non-payment, further reducing the value of the expenditure.)
Damages available on a bad faith claim include actual damages (the amount of the claim), consequential damages (including financial and emotional distress), attorneys’ fees, and punitive damages. Even though the law in California is very tough on insurers who breach the implied covenant of good faith and fair dealing, there are still many insurers within California who fail to operate under the letter of the law.
If you have made a claim to your insurer and that claim has been denied, you may want to check with a lawyer to ensure that the denial was proper. I offer a free 45-minute initial consultation, generally an ample amount of time to discuss the facts of your claim and to review the pertinent documents. In order to be prepared for an initial consultation you will need a copy of your insurance policy and any and all correspondence and communication related to your claim, including the denial letter. It is always best to have every communication with your insurer in writing (email is sufficient), and make sure each communication is dated. Be firm, don’t allow yourself to be railroaded, and when the time is right get a lawyer involved to ensure that your rights are protected.
I get a high volume of calls from people looking for a lawyer in San Diego, California. I offer a free 45-minute consultation, during which time I try to do everything I can to determine if a given case or claim has merit. In assessing the merits of a case, a lawyer processes a high volume of information. Oftentimes, such as in business disputes, a case can be comprised of thousands of pages of information. Other times, such as in bad faith insurance disputes, a case can be comprised of a very technical and complicated insurance policy (in addition to thousands of pages of information!).
A lawyer must know the applicable laws, the facts, the documents, and must assimilate all of that information into an evaluation of the strengths and weaknesses of a case.
Most important, however, a lawyer must know his or her client.
Regardless of the type of dispute being litigated, the first thing that a lawyer has to determine is whether a jury will like his or her client. (In “Bandit,” Neil Young said it right: “Lawyers in business, you get what you bring.”) What Neil didn’t say is something that many clients miss: the lawyer is only as credible as the client, and the client is only as credible as the lawyer.
At the end of the day, a lawyer can know all of the applicable laws, the facts, the documents, and the testimony of the witnesses like the back of his or her hand. If the client is not going to emotionally appeal to the jury, though, it’s all useless information.
I had an insurance bad faith case where I liked my facts, and I liked the law in our favor, but what I really liked was my client. She was in her mid-70s and was a retired nurse. She was as sharp as she could be, but not in a condescending or know-it-all way. She simply knew the facts and knew the science behind the medicine that was relevant to her dispute. There were facts that were adverse to our case, but in the negotiating process I told the lawyer on the other side, “I know the holes in my case. I know what your arguments are going to be, and there are some strong arguments there. But ultimately a jury is going to find a way to put money in my client’s pocket.”
A few weeks later, on the call wherein an agreement was reached, the lawyer on the other side somewhat surprisingly told me, “We have strong arguments, and I think we have arguments that you may not have considered. But ultimately, you said something a while back that I think is true. At the end of the day, a jury is going to find a way to put money in your client’s pocket.”
I cannot stress how important integrity and honesty are in the context of litigation. For a client, this means being honest with your lawyer and being willing to disclose information that may be adverse to your case. You have to assume that the other side already has those facts. What happens if you hide those facts or lie to try to conceal those facts is far worse than if you just address them head on in the first place. It is your lawyer’s job to do damage control and to minimize the impact of adverse facts. Ultimately, in disclosing facts adverse to your case you are building your credibility with the other side and, although it seems counterintuitive, likely taking steps towards a positive outcome.
I need a lawyer!
You may be here right now because you are looking for a lawyer but you don’t know what type of lawyer you need. I can tell you first and foremost that you need an ethical lawyer who will look out for your needs above everything else. But many people are confused by the different areas of the law and what type of lawyer they need. Below is a brief primer on what to look for within each specialty or area.
1. Criminal Law
If you have been charged with an offense, whether it’s traffic or trafficking, you may need a criminal lawyer. There are lawyers who spend $1,000,000 per month (yes, $12,000,000 per year) advertising their practice. Obviously those lawyers are doing a volume business, often referred to as a “mill.” With a mill, you (the client) are a cog in a giant machine. You are not hiring a single individual for his or her expertise, but the structure of the mill to hopefully provide some value. Personally, I know a handful of top-notch criminal defense attorneys who work in smaller practices, charge less than the large firms, and provide you and your case with greater attention and greater results. In my experience, advertising dollars do not equal capability or results. I do not practice in the area of criminal law, but if you call I am happy to provide you with a list of referrals to lawyers I trust. It is important that you interview these lawyers to make sure your goals and styles are aligned.
2. Family Law
If you are going through a divorce, or have child custody or child support issues, then you need a lawyer who specializes in family law. To me, this is the single area of the law where referrals are most critical. The stereotype for family law lawyers is that they are masters at creating disputes, which is easy to do with the emotion inherent in the family law context. Emotion + litigation = $$$$. I abhor cases where only the lawyers win. If we are doing our jobs then we are acting in the best interests of our clients. And if we are the only ones profiting, then how can we be acting in the best interests of our clients? I do not practice in the area of family law, but if you call I am happy to provide you with a list of referrals to lawyers I trust. It is important that you interview these lawyers to make sure your goals and styles are aligned.
3. Civil Litigation
In a nutshell, civil litigation is the description of disputes involving money. This is a very broad and diverse area of the law, as it covers everything from PI (personal injury) to IP (intellectual property). As you might imagine, that leaves a broad range of areas and a varying degrees of technical knowledge and expertise required. I practice in the area of civil litigation and one of my greatest enjoyments in practicing is taking the principles that I have learned from my various areas of practice and transferring them to a new or different area of the law. I am currently focusing my efforts on insurance bad faith litigation, business litigation, public works construction, and internet piracy (copyright infringement and/or trademark infringement). If it is the right case, or comes in from the right source, I will occasionally take on a personal injury case or an employment litigation matter. As a sole practitioner, I have to be very selective in the cases I take. I consider myself very fortunate to have experience in a wide array of areas within the civil litigation field. If you have a question about a particular issue or matter, please call or email and if I cannot help you I will do everything I can to refer you to someone who can help.
4. Wills & Trusts
I have a complex litigation matter concluding right now where I represent the plaintiff and there are settlement agreements with multiple defendants that could require my client to repay some of the settlement proceeds to one or more of the defendants. I am in the position of defending the settlement or, as I like to say, keeping the rats away from the cheese. Similarly, a good lawyer in the field of wills and trusts will keep the rats (the taxman) away from the cheese (your money). I do not practice in the area of family law, but if you call I am happy to provide you with a referral to a lawyer I trust. It is important that you interview this lawyers to make sure your goals and styles are aligned.
If there is another issue you have that does not seem to fit squarely into one of these boxes, please feel free to give me a call and I’ll see if I can point you in the right direction.