Key Components. Payment Arrangements. Protecting Your Assets: Drafting Ethical and Profitable Representation Agreements

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1 Protecting Your Assets: Drafting Ethical and Profitable Representation Agreements Alan Goldfarb (DL), Minneapolis, MN Helena Younossi, San Francisco, CA Key Components Use Written Agreement (Even If Not Required) Attorney Compensation; When Fee Is Earned Describe Exact Service to be Provided Clarify Client s Responsibility for Costs File Retention Policy Payment Arrangements Hourly Billing Flat Fee Hybrid/Success Fee Fees Must Be Reasonable 1

2 Pros and Cons of Hourly Fees Allocation of Risk Aversion to Time Tracking Client Comfort and Relationship Building Benefit of Hybrid Option Pros and Cons of Flat Fees Common for Immigration Matters When Clients Prefer to Know Cost; Attorneys Prefer to Leverage Experience Shared Risk Between Attorney and Client Doesn t Say When Client Expected to Pay; When Fee Earned; What Client Gets Back If Unhappy Flat Fees Advance Fees General Rule that Fees Paid in Advance Must Go Into Trust Account Exception Based on Agreement and Jurisdiction Distinguish Availability Fee and Advance Fee Minimum Fees Must Go Into Trust Account 2

3 Flat Fees Best Practices Use Written Agreement List Services Covered and What s Not Covered If Placed in Business Account, Treat as Potentially Refundable If Placed in Trust, Specify Benchmarks for Treating Portions Earned During Representation Flat Fees Attorney Attorney s s Property Check What Local Rules Permit Use Written Agreement Client Has Right to Terminate Relationship Client Gets Refund if Services Not Provided Consider Keeping Track of Time Spent Flat Fees Anticipating Problems Client Hires You for Marriage-Based Application Discloses Prior DUI; Unlikely to Impact Eligibility Fails to Disclose Citation for Possession of Drug Paraphernalia; Serious Impact Are Waivers Outside Scope of Fee Agreement? 3

4 Trust Account Some May Use Flat Fees to Avoid Trust Account ( Non-Refundable or Earned Upon Receipt ) Safer to Hold Fees in Trust Until Earned Specify in Agreement When Fee is Earned Transfer Upon Reaching Specified Benchmark Trust Account Attorney Attorney Obligations Lawyer Acts as Fiduciary for Client Funds Avoid Commingling; Notify Client When Received Provide Timely Accounting Return Unearned Legal Fees to Client Client vs. Responsible Party Non-Client May Pay, But: Client Must be Informed and Provide Consent Can t Compromise Attorney-Client Relationship No Special Treatment to Person Who Pays 4

5 Dual Representation Same Level of Representation to Each Client Dual Representation Consent Signed by Both Parties; Attach to Retainer Disclose Reasonably Foreseeable Conflicts at Outset Discuss Consequences of Actual Conflict File Retention Not Obligated to Keep Client Files Indefinitely No Statute of Limitations on When to Destroy Notify Client of Retention Period in Representation Agreement or at End of Case Client Demand for File After Specified Retention Period Would be Unreasonable Drafting Representation Agreements Workshop 5

6 Defining Scope You have retained us to represent you in a marriage-based application for permanent residence The flat fee listed above is for standard filings only, in which no unexpected case complications arise. The flat fee does not cover the need for additional services for inadmissibility waivers, appeals, or representation in removal proceedings. If these types of complications arise, we will discuss the appropriate course of action with you and proceed according to a separate fee agreement. Defining Parties and Scope Menu Approach This agreement is entered into between LAW FIRM (hereinafter Attorney) and CLIENT NAME (hereinafter Client) only and no other person or entity. Client has retained Attorney to perform the tasks outlined below and agrees to fees per the below schedule. Please initial each service listed below. BULLET POINT SERVICES AND ASSOCIATED FEES Basis For Fee We have set this flat fee amount based on our experience handling similar matters, the complexity of this case, and the amount of work we expect will be needed. Because you are paying a fixed fee, your payment will not be held in a trust account until earned. You will have the right to terminate the client-lawyer relationship, and you will be entitled to a refund of all or a portion of the fee if the agreed upon legal services are not provided. The flat fee will be the same regardless of the outcome of the case. 6

7 Retainer Language The fee for this project was not calculated based on an hourly rate. Client understands that the lawyer is not promising to provide a minimum number of hours of work, nor will the client be charged an additional fee if the project takes more time than the lawyer expected. Completion of Services You have hired us to represent you in connection with your application for naturalization. Our work on this matter will be substantially complete after your interview/examination when USCIS is able to make a decision. We will file the application for naturalization and continue to represent you through the interview. Our services do not include a request for hearing or any federal litigation. Questions & Answers Solo and Small Business School for the Immigration Lawyer 7