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Lawyers Helping Lawyers Avoid the Perils of Professional Discipline

The Unsettled Client

Q. I settled a weak case for $30,000, and got my client's medical bills reduced to $15,000. But my client is angry that he's "netting a measly $5,000," won't let me pay his doctors, and objects to my one-third fee. What should I do?

A. If this is the first time he's learned of a $5,000 net recovery, I can understand why he's more than a bit "unsettled."

You may have earned your $10,000 fee. But from your client's perspective, you are making twice what he's taking home. Rather than getting kudos for turning a losing case into cash, you now have an angry client, a fee dispute, a likely grievance, and unpaid doctors.

This could have been prevented if you took the following steps:

Explain, Explain, Explain the difference between the full settlement amount and the client's "net recovery." Even if your retainer agreement spells it out, never assume that the client knows the difference or remembers anything you said at the start of the case. He doesn't.
Show the Math before settling any case. Even if you still have liens to negotiate, prepare a preliminary settlement sheet to show the client all of the anticipated deductions and to provide a conservative estimate of his net recovery. Once you get those liens reduced, his actual recovery will increase even more and further enhance the client's satisfaction.
Be Flexible to ensure the client's satisfaction. Rather than insist on the full contingency fee to which the client agreed, experienced personal injury lawyers promote goodwill by discounting their fees in appropriate cases.

Lawyers who appear to "profit" more than their own clients are more prone to grievances. That's why many plaintiffs' counsel are leery of attorney's fees which exceed the net recovery of their clients.

To preempt these complaints, smart lawyers often adjust their fees to ensure that their clients come out ahead. There are certainly labor-intensive cases with massive medical liens that can't be resolved this way. But in smaller cases like yours, reducing your fee will reduce the likelihood of a grievance, will increase your client's satisfaction, and may even prompt future referrals.

If you cut your fee from $10,000 to $7,500, this modest discount would eliminate any disparity between your fees and your client's net recovery of $7,500. Better yet, if you reduced the fee to $7,000, your client would net a thousand dollars more than you would.

If that doesn't appease him, you must keep all disputed funds in escrow until his dispute is resolved. Beyond your client's $5,000 net recovery, his protest of legal fees and medical liens has placed the rest of the settlement proceeds in dispute. So after paying the client the sum of $5,000, you must retain the remaining $25,000 in trust until rival claims are sorted out.

If litigation is ultimately necessary, you will probably have to file an "action in the nature of interpleader" to sort out your claim for attorney's fees, the doctors' claim for payment of medical bills, and your client's claim for a greater net recovery. This will only prolong the agony and will likely place you at the receiving end of a bar complaint.

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Attorney Grievance defense attorney specializes in defending lawyers in disciplinary proceedings before the Maryland Attorney Grievance Commission and the D.C. Bar's Board on Professional Responsibility involving professional misconduct, legal ethics, disbarment, suspensions of law licenses, petitions for disciplinary action, reprimands and sanctions for unethical conduct. If you receive a letter from Bar Counsel Lydia Lawless, Disciplinary Counsel Hamilton Fox, or from any attorney disciplinary board in Maryland or the District of Columbia, retain experienced attorneys with expertise in lawyer discipline and breach of ethics cases to avoid sanctions for professional misconduct. We help lawyers avoid disbarment, suspension, reprimands, censure and informal admonitions by drafting responses to client grievances and ethical complaints; representing lawyers in peer reviews, evidentiary hearings, and oral arguments before the BPR and the Court of Appeals; filing petitions to reinstate an attorney's license to practice law; conducting law firm ethical compliance audits; and drafting legal ethics opinions to protect lawyers from ethics charges. In many cases, disciplinary proceedings may be dismissed, dismissed with a warning, or result in a conditional diversion agreement with Bar Counsel to rectify misconduct. Lawyers may need help in managing their law firm attorney escrow IOLTA trust account and complying with attorney trust accounting rules to avoid charges of ethical misconduct. Do not represent yourself in responding to an attorney grievance, law firm client complaint, or other allegation of ethical impropriety. Attorney grievance defense counsel may help you comply with legal ethics rules, avoid sanctions like suspension or disbarment, and avoid future attorney grievances.


By The Lawyer's Lawyers | Kramer & Connolly and Irwin R. Kramer who are responsible for the content of this informational website.   This website is designed for lawyers faced with attorney grievances. As cases do differ, past performance does not guarantee future results.