A legal-ethics hypothetical
Attorney charges client $17,000 for a $2,500 matter. When astounded client inquires, attorney’s billing office explains that attorney bills in $15,000 increments.
Hypothetical
question on the California Rules of Professional Conduct:
Has attorney committed an ethics violation?
Answer:
Attorney has gravely violated Rules of Professional Conduct, rule 4 –200(A), which prohibits charging an “unconscionable fee.”
The
fee is unconscionable because when fees are based on work done, they must be
based on the work done on the particular case. The fee must be based on “all the facts and circumstances” of the
particular case. (Rules
Prof. Conduct, rule 4 –200(B)
[emphasis added].) Equivalence classes are allowed for work of equal expected
amount but not when the work is highly variable within the range.
What
discipline for the routine use of this despicable practice? I don’t have access to
the State Bar Review Department’s deliberately inaccessible case law, but I’d
estimate a one-year suspension. Other opinions?
The California
State Bar’s outrageously unconscionable fee structure
In
another manifestation of its ethical villainy, the State Bar charges
respondents’ legal costs and fees in exactly this shameful manner, brazenly
defending its prerogative to save administrative costs by overcharging. Defense attorney D.C. Carr (Kafkaesq) provides a
much-needed exposure
of this fee
structure. Some examples. 1) A simple challenge before the Review
Department costs about $15,000 if taken during the first 120 days. 2) If a
trial lasts a fraction of a second day, the cost rises about $6,000.
The California
State Bar Court’s state and federal vulnerabilities
There
are at least two bases for challenging the fee structure—one at the state level,
directed to the fees alone; the other federal level, directed against the
whole action because the fee structure denies due process. The state-level
challenge is based on the State Bar’s having exceeded its jurisdiction. Since
the averaging method the State Bar uses is unethical under the Rules of
Professional Conduct as well as under ordinary morality, Business
& Professions Code section 6086.10, which provides the right to levee
fees, isn’t plausibly interpreted as giving the State Bar the right to impose
fees unrelated to costs. The statute allows the State Bar “reasonable costs,” a
term of art in California civil procedure, requiring an account of actual costs
in the particular case.
The
federal challenge is based on the federal standards for due process, which focus on the right to be heard, apply to state courts, and are offended by arbitrary
fees. Business
& Professions Code section 6086.13 permits waiver for hardship but
doesn’t compel it, where the threat of huge, disproportionate fees typically
leverages settlement terms and routinely prevents respondents from being heard.
I plan future Installments to consider
the procedural issues in mounting a state or federal defense based on the
theory that the fee structure denies respondents the right to be heard.
