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Collections: Avoiding Issues, Mediation/Arbitration and Client Screening

 
It has been estimated that between 25% and 40% of all claims of malpractice are in response to an action to collect attorney’s fees. See James M. Fischer, External Control over the American Bar, 19 Geo. J. Legal Ethics 59 (2006). The lesson to be learned by these statistics is avoid filing an action to collect a fee. This can be done by diligently following the payment history of the client, and, if the client fails to pay in a timely manner, withdraw under Rule 1.16 to avoid further loss.1

Engagement letters can reduce fee issues if the duties and responsibilities of the parties are properly set forth. Engagement letters should be used to address the following:

- Identification of the client and client representatives.
- A description of the anticipated scope of services and the engagement, including necessary incidental services, including such things as legal research, and associated costs, and staffing.2
- Document duties regarding communications.
- Describe any limitations on services to avoid misunderstandings regarding the scope of the representation.
- Document the basis for the fee. Contingency fee must be documented, as required by Rule 1.5.
- Retainer – Type of retainer (Evergreen)
- Wavier of existing or future conflicts as permitted by Rules 1.7 and 1.9.3

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