According to an article in the current issue of Texas Lawyer, a law firm in Dallas, Winstead, is suing a former client for unpaid attorney fees in the amount of almost $100,000. It appears that the client ran up a legal bill that he couldn't afford to pay - so, at the firm's request, the client signed a promissory note for $160,000. At the time Winstead filed suit, the former client still owed $99,626.
[Don] Campbell [shareholder and general counsel for Winstead] says Winstead rarely sues over unpaid fees or structures a fee bill as a loan, but it was reasonable in this case. "We had three different matters for the client, and he requested essentially a schedule for payout of the fees, and we agreed to just convert the debt into a promissory note," he says.
Legal ethics expert Charles Herring, a partner in Herring & Irwin in Austin, says it's unusual for a firm to enter in a promissory note with a client or former client who owes fees, but he has heard of it. He says a firm that structures a fee payment as a note is giving a client an extensino of time to pay.
Now you may ask yourself what on earth this fee dispute has to do with criminal law. It's quite simple. Disputes of this nature are the very reason that criminal defense attorneys bill clients a flat fee upfront. Whenever a criminal defense attorney takes a partial payment of a fee he is taking a risk that there won't be any more money after that. Our clients aren't the best at managing their money. Not to mention the fact that there's always a crisis demanding money just around the corner.
When we take installment payments on a fee we end up burning both ends of the candle - working for our client as his defense attorney but also working for the law firm as a collection agent. The arrangement can cause friction between attorney and client and work to the detriment of the representation.
By filing suit, Winstead is walking into risky ground. Do you really want a judge or jury second-guessing your litigation strategy or your billing practices? Do you really want someone looking into how much you billed for that form letter you sent your client as a case status update? How about the time you billed for leaving a voice mail message for opposing counsel? What about the generic discovery requests you "customized" by using the Find and Replace feature?
But what I want to know is how a client ran up a tab of over $100,000 without someone telling him to put some more cash in the kitty.
The article doesn't go into the purpose of the representation nor does it tell us how the cases were disposed. Over at the criminal courthouse, any money you collect after a case has been disposed of is considered found money. If the client was acquitted or the case dismissed, they were innocent all along and didn't really need you. If the client was convicted then you suck and the client and his family won't have any desire to pay the balance of the fee.