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I paid $ 5,000 to a lawyer as a retainer for setting up a trust. He did not have me sign a written retainer agreement. He misrepresented what he proposing. So I decided to not proceed. We are now in dispute about how much of that retainer he owes me back. I've heard elsewhere in the meantime that it is a requirement of California law that the client must be given a written retainer agreement anytime a retainer fee is collected. Is that correct? If so, what are the consequences of not complying?
State/Country relating to Question: California Already Tried: I have petitioned the local bar association for a mediation session, which if unsuccessful will go to arbitration.
Hello and thank you for allowing me the opportunity to assist you.
Question: “I've heard elsewhere in the meantime that it is a requirement of California law that the client must be given a written retainer agreement anytime a retainer fee is collected. Is that correct? If so, what are the consequences of not complying?”
Answer: Generally speaking, you are correct (there are exceptions, but they probably don’t apply in your case). California law states:
6148. (a) In any case not coming within Section 6147 in which it is
reasonably foreseeable that total expense to a client, including
attorney fees, will exceed one thousand dollars ($1,000), the
contract for services in the case shall be in writing. At the time
the contract is entered into, the attorney shall provide a duplicate
copy of the contract signed by both the attorney and the client, or
the client's guardian or representative, to the client or to the
client's guardian or representative. The written contract shall
contain all of the following:
(1) Any basis of compensation including, but not limited to,
hourly rates, statutory fees or flat fees, and other standard rates,
fees, and charges applicable to the case.
(2) The general nature of the legal services to be provided to the
client.
(3) The respective responsibilities of the attorney and the client
as to the performance of the contract.
Section 6147 is with regard to contingency fee arrangements. Since you didn’t agree to a contingency fee arrangement, then the above Section applies (and even if you did agree to a contingency fee arrangement, then 6147 also states that the contract must be in writing).
However, note that the law states “reasonably foreseeable.” That provides the attorney with some wiggle room, though it does make one question why he asked for $5000 up front if he reasonably believed it would cost less than $1000. The penalty is as follows:
(c) Failure to comply with any provision of this section renders
the agreement voidable at the option of the client, and the attorney
shall, upon the agreement being voided, be entitled to collect a
reasonable fee.
Since the attorney did not comply with Section 6148, you can void the oral agreement. However, the attorney is still entitled to a “reasonable fee.” If you sue the attorney, the judge will determine what is reasonable.
The botXXXXX XXXXXne is that there isn’t much penalty for ignoring that particular law, unless the attorney is actually trying to scam you. If he charged a reasonable fee, then it doesn’t really matter whether you have a written agreement.
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Attorney-At-Law
Licensed in Virginia and Maryland