Ritman Insurance Insights

Ritman Insurance Insights

Collection of Fees

Posted 9:15 PM

Clients frequently ask us: "Can we sue for fees?" While we don't encourage suing for fees, we know that lawyers should not be ‘shut out' of availing themselves of the courts to be paid on contractual obligations.

Before you sue for fees, follow these guidelines:

First, review the file for any potential legal malpractice in the representation (or actions that could be in good faith claimed to be malpractice) that could defeat the fee claim. Have another lawyer in the office look at the file as though he were defending the client in a fee suit. Were there any issues that could be raised?

Second, make sure the client has assets to go after to satisfy the fee judgment. Otherwise, why bother?

Third, if the fee claim is large enough to warrant the client hiring a lawyer to defend them, in all likelihood there will be a malpractice claim made in the defense. Therefore, keep in mind the reporting requirements of your firm's malpractice policy.

Fourth, determine whether the amount of the fee is large enough to warrant the time and effort needed to pursue recovery.

Fifth, pay attention to the Red Flags! Are you the third lawyer they have hired on this matter? RED FLAG! Are they balking at paying a retainer? RED FLAG! Implement client screening procedures to limit representing those clients who likely won't pay. Employ internal reviews to identify non-paying clients more quickly. Know how and when lawyers may withdraw from representations so you can get out sooner rather than later.

Sixth, make sure the fee is ethical to begin with. Indiana lawyers need to be familiar with fee cases such as: In re Kendall, 804 N.E.2d 1152(Ind. 2004), Galanis v. Lyons & Truitt, 715 N.E.2d 858 (Ind. 1999) and In re Galanis, 744 N.E.2d 423 (Ind. 2001).