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MPRE Sample Chapter

 

RIGOS BAR REVIEW SERIES - MPRE CHAPTER 1
CLIENT RELATIONS - COMPETENCE, SCOPE OF REPRESENTATION, AND FEES

 

A.  Competence - MRPC 1.1

     Lawyers must be legally competent.  Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the case.

     1. Proficiency:  Competent representation is usually based on personal experience. Lack of experience in a given area is not conclusive evidence of incompetence; all persons who graduate from law school and pass the bar exam are presumed competent to research and practice any area of law.  However, a lawyer cannot charge the client for excessive research time spent learning details of the substantive law that an experienced lawyer would know.  A lawyer may associate with another attorney who has the required competency, but the client must consent to the arrangement.

     2. Required Standard:  The standard is usually that of a general practitioner, but may be elevated if the lawyer held himself out as an expert such as an LL.M. in taxation.

     3. Emergency Situation:  In an emergency, a lawyer may make a best effort until it is possible to refer the client to a more competent practitioner.

     4. Maintaining Competence:  A lawyer must keep abreast of changes in the area of practice. Usually this means participating in relevant continuing legal education (CLE).

MPRE Tip:  Incompetence is often combined on the exam questions with delay (MRPC 1.3) and a failure to communicate with the client (MRPC 1.4).

     5. Legal Malpractice Relationship:  Legal malpractice theories include breach of contract (reasonable care implied), tort (misrepresentation or negligence), or breach of fiduciary duty (confidentiality or honest dealings).  The MRPCs do not necessarily set the standards of practice for purposes of civil liability, and evidence of a disciplinary violation or alleged violation may not be introduced in a malpractice lawsuit. However, an expert may incorporate the concepts underlying the MRPCs into an opinion on the reasonable legal standard of care to which the lawyer should have adhered.  The client generally must prove that but for the lawyer's malpractice, the client would have prevailed in the underlying matter ("case within a case").

B. Scope of Representation and Authority Allocation - MRPC 1.2

     This Rule includes a variety of representation matters including who - the client or lawyer - makes which decisions and addresses related ethical restrictions on the client's directions over the lawyer. The scope of the lawyer's undertaking is also examined.

     1. Representation Objectives:  The client has the ultimate authority in determining the representation objectives. This includes all of the major outcome-determinant decisions.

     2. Lawyer's Decisions:  The lawyer has implied authorization to decide the means and tactics to achieve the objectives.  This includes making most strategic and procedural decisions such as causes of action to plead, the extent of discovery, professional courtesy to be extended to opposing counsel, and trial witness presentation choices.  The lawyer should consult with the client on such details.

     3. Client's Decisions - AJET:  The client has the ultimate authority to make major litigation decisions.  These include the questions of whether to (1) accept or reject a settlement offer; or in a criminal case, (2) jury trial waiver, (3) entering a plea, or (4)testifying at trial.

     4. No Endorsement:  A lawyer's representation of a client does not constitute approval or an endorsement of the client's political, social, or moral views and activities.

     5. Counsel a Crime or Fraud:  A lawyer shall not counsel or assist a client in perpetrating conduct that the lawyer knows is criminal or fraudulent. Prohibitions include planning and concealing ongoing unlawful activities, which is aiding and abetting; the lawyer must withdraw. However, the lawyer may attempt to determine the validity, scope, meaning, or application of the law to a past offense and discuss the legal consequences. A lawyer may in good faith counsel a client on how to gain legal standing necessary to challenge the law.

     6. Client Urging MRPC Violation:  If the client expects assistance from the lawyer not permitted by the MRPCs, the lawyer must consult with the client concerning the ethical limitations on the lawyer's conduct. The lawyer must tell the client that he cannot violate the disciplinary rules. If the client insists, the lawyer must attempt to withdraw.

     7. Client Authority:  In some states, a lawyer shall not willfully purport to act as a lawyer for any person without the prior authority of that person.

     8. Limit of Representation:  Clients usually retain a lawyer contractually to handle all aspects of a matter, such as pursuing or defending all legal representation in a predefined cause of action. In many states, the scope of representation by a lawyer may be "limited" to a particular discrete aspect of a matter, such as only the trial court representation, but not an appeal. Scope restrictions must be reasonable under the circumstances. The client must give informed consent after consultation.

C. Diligence - MRPC 1.3

     A lawyer shall act with reasonable diligence and promptness in representing a client.

     1. Dilatory Practices:  The lawyer must act promptly and forcefully in pursuing the client's interests. Dilatory practices include an unreasonable delay in filing a lawsuit, procrastination in pursuing the matter, or neglecting to return the client's calls or requests for information concerning the status of the case. If a lawyer is leaving the practice of law, substituted counsel must be appointed to handle the ongoing client representation. The client must be informed of the situation and the succeeding attorney. The client may decide to go elsewhere.

     2. Legal Rules:  Court deadlines control. A plaintiff's lawyer's worst nightmare is a statute of limitations violation - usually failure to file a claim timely is automatic malpractice. Effective calendaring and docket control systems are critical.

     3. Representation Completion:   Diligence includes carrying through the representation until the case is complete and/or the lawyer properly withdraws. The client must be informed of completion and any appeal possibility - preferably in writing - so she understands the lawyer's responsibility has ended and she needs to look elsewhere for advice and monitoring.

OACLLS represents the formation elements that are necessary for an enforceable contract.

MPRE Tip: To invoke MRPC 1.3, the lawyer's delay must be patently unreasonable.

D. Communication - MRPC 1.4

     A lawyer shall keep the client reasonably informed about progress and developments in the status of the matter, any issues requiring informed consent, and any limitations on the lawyer. Any MRPC limitations should be explained if the client's expectations could involve a violation. All bona fide offers of settlement must be communicated to the client.

     1. Informative Explanations:  An explanation may be necessary so that clients can participate in making informed decisions and have a full understanding upon which informed consent is based.  Any request for information by the client should be answered timely. Client telephone calls, emails, and letters should be returned promptly.  If for some reason the time schedule or agreed timeline slips, the lawyer should inform the client before the due dates.

     2. Written v. Oral:  Oral communications are worth the paper they are written on.  While the expectations of both parties start with the representation agreement, it is also a good idea to send a letter at various intervals summarizing the status of the matter and what is ahead.

     3. Special Situations:  There are two exceptions to the communication duty.

          a. Court Order or Rules:  A court order may prohibit or limit the lawyer from sharing sensitive information with the client.  For instance, a judge may issue a protection order forbidding the lawyer from communicating to the client trade secrets of a competitor that the lawyer learned in the discovery process.

          b. Client Imprudent Reaction:  If the disclosure of adverse information would cause the client to harm herself, the lawyer may delay the communication.

     4. Communicate Mistakes:  Ethical rulings direct that any mistake a lawyer makes must be communicated to the client.  This could create a conflict of interest requiring client consent to allow the lawyer to go forward in the representation.

     5. Communicate Termination:  The client must be informed when the attorney-client relationship has ended.  This requirement intends to make it clear to the client that the lawyer's responsibility has terminated, and she is no longer monitoring the client's situation or changes in the law that may have adverse consequences.

MPRE Tip: A failure to communicate (MRPC 1.4) and failure to act in a diligent manner (MRPC 1.3) both suggest an incompetent lawyer (MRPC 1.1).

E. Fees - MRPC 1.5(a)

     A lawyer may not charge excessive fees (or recover excessive expenses), regardless of how characterized or calculated.  Therefore, all the client charges shall not be unreasonable.

     1. Reasonable Factors: In determining the reasonableness of a fee, there is no single bright-line test.  Rather consider the following SANTA (case-related) and REBER (attorney-related) factors.

          a. Skill Required:  A complex antitrust class action will require more skill than an uncontested divorce and thus may be billed at a higher rate.

          b. Amount Involved:  Value added is currently a favored justification for higher fees.  An attorney pursuing a personal injury case seeking millions of dollars in damages could bill more per hour than for a small dollar collection action.

          c. Novelty and Difficulty:  The novelty and difficulty of prevailing in the case is a factor in determining appropriate fee levels.

          d. Time Involved / Opportunities Foregone:  The time and labor required are probably the most widely accepted factors in setting fees.  A case that the client knows will absorb all a lawyer's time and preclude other employment may be billed at a higher rate.

          e. Average Customary Fee:  This is the amount normally charged in the locality for similar legal services.

          f. Relationship:  The nature and length of the attorney's professional relationship with the client is a factor in determining the fee level.  Frequently a lawyer demands a fee and cost advance from a new client.

          g. Expertise:  An attorney who is the world's expert on corporate tax-free reorganizations would command a higher billing rate than a novice.

          h. Basis of Fee:  Whether the fee is fixed, hourly, or contingent is an important factor in determining the reasonableness question.

          i. Experience / Reputation:  The more experience in the area and better the reputation of the attorney, the higher the attorney's fee is to be expected.

          j. Result:  The result matters; winning attorneys usually are paid more than losing attorneys.

MPRE Tip:  No one factor is conclusive in the SANTA REBER analysis.  If the fee is questioned, the burden is on the lawyer to show that the fee is not unreasonable.

     2. Double Billing:  The ABA in Formal Opinion 93-379 stated that double billing the same time or work product to two clients is improper.  This may involve billing two clients for the same research or the same transportation time.

     3. Fee Agreement Required - MRPC 1.5(b):  Fee agreements (alone or as a part of a more inclusive representation agreement) are often determinant or quite important to the reasonableness of the amount to be charged.

          a. Includes:  There must always be a fee agreement that allows the client to receive a reasonable and fair disclosure of all material elements of the engagement and billing practices.  Some states require a writing if the fee exceeds a threshold amount, say $1,000.  The MRPCs suggest a writing avoids misunderstandings and clarifies expectations.  Still, the Rule does not preclude an oral agreement as long as the lawyer is able to prove that the oral agreement gave the required reasonable and fair disclosure.

          b. New Client:  When the lawyer does not have an established business relationship with the client, an agreement is required.  This communication will preferably be communicated before or within a reasonable time after commencing the representation.

          c. Substantially Different:  If the services to be performed or the fee details are substantially different from a previously-existing arrangement between the lawyer and client, the new factors involved in determining the charges must be communicated to the client.

          d. Change in Circumstances:  If developments occur that make an earlier fee estimate impossible, a revised estimate should be timely submitted to the client.

          e. External Fee Split:  There must be a written fee statement if a fee split involves a lawyer external to the firm, and it is not proportional to services performed.  See below under G on page 1-28. Fee splits with non-lawyers are not allowed. See also MRPC 5.4(a) at page 5-176 infra.

          f. Writing Request:  Upon the request of the client in any matter, the lawyer shall communicate in writing the rate or basis of the fee.

          g. Withdrawal Writing:  Depending on the particular situation at hand, the lawyer may conclude that the safest course of action is to withdraw rather than complete the representation.  The client's non-payment of fees, failure to provide required information, or expressed intent to defraud the court may create such a situation. If the matter is in litigation, a formal motion to withdraw may be necessary.  See also MRPC 1.16 at pages 3-98 to 100 infra for additional detail concerning withdrawals.

     4. Client Fee Objection:  The question of fee reasonableness usually develops when a client objects to a billing. If there was a client fee prepayment, the disputed amount should remain in trust pending a resolution.  A lawsuit by a lawyer to collect a fee from a client usually draws both a counterclaim for malpractice and a complaint to the disciplinary authority alleging the fee is unreasonable.

MPRE Tip: Any disputed portion of client advances and prepayment funds should be left in trust pending a resolution.

F. Contingency Fee Agreement - MRPC 1.5(c)

     A fee may be contingent in whole or in part on the outcome of the matter except in the two situations where a contingent fee is prohibited; see subsection 3 below.

     1. Writing Requirement:  A contingent fee is determined by the outcome of the representation. Such an agreement always must be in writing and signed by the client. A contingent fee cannot be unreasonable in amount considering the effort and outcome. The writing should clearly state the method by which the lawyer's fee is to be determined. Details of the percentages that would accrue to the lawyer in the event of settlement, trial, or appeal should be explained. Examples, including case outcome dollar hypotheticals, may also be helpful.

     2. Treatment of Costs:  The agreement must set forth litigation and other expenses to be deducted from the recovery. In addition, whether such expenses are to be deducted before or after the contingent fee is calculated must be disclosed.

     3. Prohibited Matters - MRPC 1.5(d):  A lawyer cannot enter into a contingency fee arrangement for the following matters:

          a. Domestic Relations:  This includes an attempt to secure a dissolution or custody of a child, or the amount of property awarded, alimony, or child support. In contrast, a contingent fee is proper for collection of alimony or support in arrears.

          b. Criminal Matter:  Representation in a criminal case may not be undertaken on a contingency basis. 

     4. Client Termination:  The client may terminate an "at-will" lawyer at any time. Substantial completion is usually achieved if the lawyer obtains a firm settlement offer in an amount that the client had approved. If substantial completion has been delivered, a recovery is allowed under a theory of quantum meruit for the reasonable value of the services rendered.

     5. End of Case:  Upon conclusion of a contingency matter, the lawyer must provide the client with a written statement of account. This should itemize the dollar recovery outcome, all chargeable costs, and the calculation of amounts going to both the lawyer and the client.

MPRE Tip: Contingency fee representation is a very frequent MPRE testing area.

G. Division of Fees - MRPC 1.5(e)

     The rules on an allowable division of fees between lawyers depends on whether they practice in the same law firm.

     1. In Same Firm:  There are no restrictions on intra-firm split of fees paid by a client for representation. Many firms have formula revenue and expense allocation systems. For example, a rainmaking partner may receive some portion of the billing for supervising the law firm's representation of certain of her clients. Similarly, the firm may pay a former partner a percentage of fees earned after her retirement or sale of her interest.

     2. Not in Same Firm:  This involves a single fee billing to a client when the lawyers are not in the same firm. There are two allowed methods of permissive fee splits.

          a. Proportional:  Fees proportional to services each lawyer performs are allowed.

          b. Non-Proportional:  An external fee division not proportional to services performed by each lawyer may be proper if both of the following conditions are met.

               (1) Joint Responsibility:  Each lawyer must assume joint responsibility for the whole representation, and

               (2) Client Consent:  The client must consent to the arrangement, including the non-proportional share each lawyer is to receive, and the agreement must be confirmed in writing. For instance, the client could agree that her friend, the overseeing lawyer, would receive a substantially higher fee per hour than the lawyer doing most of the work.

MPRE Tip: Splitting a fee with an external lawyer who neither works on the case nor assumes responsibility creates a potential disciplinary action against both lawyers involved.

     3. Referral Services:  External referral fees may be paid only to a bar association or local bar-approved referral service.  Any other forwarding, referrals, or commissions on fees may not be paid to any person, even if that person is another lawyer.

     4. Overall Reasonable Restraint:  Finally, the total fee all the lawyers receive in the matter and the fee allocation scheme must be reasonable.

Last updated on 9/9/2010 10:22:45 AM