PRACTICE

TIPS

CA LIC 0C04825

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Brought to you by

Robert W. Harrison, Esq.Patrick J. Kearns, Esq.

AVOID FEE DISPUTES

Malpractice is an affirmative defense to an obligation to pay a legal bill. Thus, it is common practice to see a malpractice suit filed in response to an attorney’s collection efforts on an unpaid bill. If a lawsuit is filed against the client for collection, the client often has nothing to lose by dissecting the attorney’s file for some aspect of the attorney’s

representation that was arguably not within the standard of care. Any result that leaves the client not fully satisfied, including a settlement of the client’s claim, can be turned into a potential legal malpractice claim. Thus, avoiding a fee dispute is a healthy way to avoid a legal malpractice claim that would otherwise never be filed.

The best way to avoid a fee dispute is to be paid up front. Thus, for clients who do not have a proven track record of paying their bills (on time, or at all), it is a good practice to require a retainer and to require that the client replenish the retainer on a regular basis. This way, at the end of the representation, it is the attorney who is returning money to the client, as opposed to seeking money from the client in order to close out the file.

Assuming that the representation ends with an amount due and owing to the attorney, depending upon the amount of the receivable and the likelihood that a collection effort will succeed, an attorney should always carefully consider whether it is worth commencing a collection effort against a recalcitrant client, as opposed to simply writing off the receivable – particularly given the likelihood that the client will counterclaim for malpractice. If the attorney does decide that she wishes to sue a client for an outstanding receivable, the attorney should audit her file (or, better yet, another attorney in the same firm should audit the file) to make certain that there are no obvious errors for a client to exploit before undertaking the collection effort.

In a fee dispute with a client, the statute of limitations may help an attorney. If a fee action must be filed, consider waiting until after the statute of limitations has run out on any counterclaim for malpractice before pursuing formal collection efforts. The time limitation for the commencement of a contract action for payment of fees is typically much longer than the statute of limitation that governs professional liability claims. Keep in mind, however, that the discovery rule applies, so that the period for suits against attorneys does not begin to run until the plaintiff has discovered that she has been injured by the attorney’s alleged misconduct. Most states do have a statute of repose for suits against attorneys which will represent an absolute bar after a specified time. The claim then no longer exists, whether it has accrued by that date or not.

About the Authors:Robert Harrison is the regional managing partner of the San Diego office of Wilson Elser Moskowitz Edelman & Dicker LLP. He has extensive experience in civil litigation with emphasis in the defense of professional liability. Bob is a past president of California Defense Counsel, the Association of Southern California Defense Counsel, and the San Diego County Barristers Club. He is a frequent speaker on trial tactics and other legal topics, and has been a presenter/demonstrator on multiple occasions for the ABOTA “Trial by Masters” program. Bob, a retired Captain in the U.S. Naval Reserve, enjoyed the opportunity to serve in command of two Naval Reserve Force ships, USS Pluck (MSO-464) and USS Hepburn (FF-1055), as well as a variety of other assignments during his six years of active duty and 20 years of naval reserve service. Patrick Kearns is a civil trial lawyer at Wilson Elser Moskowitz Edelman & Dicker LLP. Patrick’s practice focuses on the defense of medical, dental, and legal professionals in malpractice suits. He also defends professionals in administrative law matters involving the medical, dental, and pharmaceutical licensing boards of California. Patrick has significant experience defending businesses in a variety of areas including contract and warranty claims, products liability claims and employment issues. He has successfully tried multiple cases to jury verdict and he also has experience in handling and defending appellate matters; having defended appeals in both the California State Courts of Appeal and the U.S. Ninth Circuit Court of Appeals. An active member of the legal community, Patrick frequently speaks to professional groups on issues of legal ethics.