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End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.


Florida Legal Ethics

1.5   Rule 1.5 Fees

1.5:100   Comparative Analysis of Florida Rule

Primary Florida References: FL Rule 4-1.5
Background References: ABA Model Rule 1.5, Other Jurisdictions
Commentary:

1.5:101      Model Rule Comparison

The Florida Rule differs from MR 1.5 in that it provides detailed definitions of and restrictions on excessive fees, including a requirement that a lawyer may not accept a fee that was generated by advertising or solicitation not in compliance with the Florida Rules' restrictions on solicitation and advertising, found at FL Rule 4-7. The Florida Rule also sets forth: (1) detailed restrictions on contingency fees, including the requirement that contingency fee arrangements be reduced to a written contract and specific language that must be contained in any contingency fee contract; (2) maximum percentages for contingency fees, with an “out” provision permitting a client to confidentially petition the court for a contingency fee in excess of the maximum if the client is unable to obtain the client’s attorney of choice; (3) limitations on the division of contingency fees between primary and secondary attorneys on a case; and (4) a lengthy "Statement of Client's Rights for Contingency Fees," which must be read by the client and signed by both the client and the lawyer at the outset of the representation. A lawyer on a contingency fee case must retain a copy of the closing statement for six years. Finally, the Florida Rule provides for approved credit plans for services rendered and cash paid by the lawyer on behalf of the client.

1.5:102      Model Code Comparison

DR 2-106(A) prohibits a lawyer from collecting "an illegal or clearly excessive fee," and DR 2-106(B) sets forth a list of eight guides for determining excessiveness similar to the guidelines set forth in FL Rule 4-1.5(b). DR 2-106 contains no counterpart to FL Rule 4-1.5(a), defining a "clearly excessive" fee, nor any counterpart to the Florida Rule's lengthy and detailed restrictions on contingency fees.

1.5:200   A Lawyer's Claim to Compensation

Primary Florida References: FL Rule 4-1.5
Background References: ABA Model Rule 1.5, Other Jurisdictions
Commentary: ABA/BNA § 41:101, ALI-LGL §§ 38-41, Wolfram §§ 9.1-9.6

[The discussion of this topic has not yet been written.]

1.5:210      Client-Lawyer Fee Agreements

A contingent fee contract that does not comply with the Florida Rules is void and unenforceable. Chandris, S.A. v. Yanakakis, 668 So. 2d 180, 185-86 (Fla. 1995). However, the attorney would still be entitled to recover on the basis of quantum meruit for the reasonable value of services rendered. Id. at 186 n.4; see also King v. Young, Berkman, Berman & Karpf, P.A., 709 So. 2d 572 (Fla. 3d DCA 1998) (law firm entitled only to quantum meruit where fee agreement in dissolution of marriage contained contingency provision in contravention of RPC). Where a contract for representation is void as constituting the unauthorized practice of law, the lawyer is not even entitled to quantum meruit and may be required to disgorge any fees received. Vista Designs, Inc. v. Melvin K. Silverman, P.C., 774 So. 2d 884 (Fla. 4th DCA 2001).

1.5:220      A Lawyer's Fee in Absence of Agreement

[The discussion of this topic has not yet been written.]

1.5:230      Fees on Termination [see 1.16:600]

In Rosenberg v. Levin, 409 So. 2d 1016 (Fla. 1982), the Florida Supreme Court held that "an attorney employed under a valid contract who is discharged without cause before the contingency has occurred or before the client's matters have concluded can recover only the reasonable value of his services rendered prior to discharge, limited by the maximum contract fee." Id. at 1021. The court explained its reasoning:

It is our opinion that it is in the best interest of clients and the legal profession as a whole that we adopt the modified quantum meruit rule which limits recovery to the maximum amount of the contract fee in all premature discharge cases involving both fixed and contingency employment contracts. The attorney-client relationship is one of special trust and confidence. The client must rely entirely on the good faith efforts of the attorney in representing his interests. This reliance requires that the client have complete confidence in the integrity and ability of the attorney and that absolute fairness and candor characterize all dealings between them. These considerations dictate that clients be given greater freedom to change legal representatives than might be tolerated in other employment relationships. We approve the philosophy that there is an overriding need to allow clients freedom to substitute attorneys without economic penalty as a means of accomplishing the broad objective of fostering public confidence in the legal profession. Failure to limit quantum meruit recovery defeats the policy against penalizing the client for exercising his right to discharge. However, attorneys should not be penalized either and should have the opportunity to recover for services performed.

Id. "The reason for the discharge is simply not relevant to a determination whether recovery on the contingent fee contract or quantum meruit should be permitted since it is an implied condition of the contract that the client may terminate it at will." Sohn v. Brockington, 371 So. 2d 1089, 1093 (Fla. 1st DCA 1979). One court has noted that "[T]he Rosenberg rule has been applied strictly. Even when the contingency has almost occurred at the time of the attorney's discharge, the fee awarded the attorney is limited to the capped quantum meruit amount provided in Rosenberg." Trend Coin Co. v. Fuller, Feingold & Mallah, P.A., 538 So. 2d 919 (Fla. 4th DCA 1989); see also Schwanebeck v. Calzado, 524 So. 2d 478 (Fla. 3d DCA 1988) (attorney who effected settlement of client's case after being discharged entitled only to quantum meruit recovery).

When the client has hired a subsequent lawyer and agreed to a contingency fee, the fees for the first discharged lawyer are not subtracted from the second lawyer's contingency fee. Adams v. Fisher, 390 So. 2d 1248 (Fla. 1st DCA 1980).

Such a rule insures the right of a client to discharge an attorney at any time with or without cause, but it also makes the client responsible for his actions. A client may end up paying fees in excess of the original contingent fee, once to the discharge attorney in quantum meruit and again to the substituted attorney on a new contingent fee contract. "Such payment, . . . should certainly operate as a self-limiting factor on the number of attorneys so discharged." Although it was not done here, a client could contract to pay second attorney a contingent fee less the fee due first attorney.

Id. at 1251.

In contingency fee cases, the cause of action for quantum meruit does not accrue until the contingency occurs. If the lawyer had not been discharged and the contingency failed to occur, the lawyer would have recovered nothing. Rosenberg, 409 So. 2d at 1022. The court provided the following guidance to trial courts:

In computing the reasonable value of the discharged attorney's services, the trial court can consider the totality of the circumstances surrounding the professional relationship between the attorney and client. Factors such as time, the recovery sought, the skill demanded, the results obtained, and the attorney-client contract itself will necessarily be relevant considerations.

Id. If the attorney is discharged and the contingency does not occur, the attorney is not entitled to any fee. Life Care Centers, Inc. v. Chiles, 674 So. 2d 873 (Fla. 1st DCA 1996).

If the contingency occurs before the attorney is discharged, the attorney is entitled to the contingency fee. Zaklama v. Mount Sinai Med. Ctr., 906 F. 2d 650 (11th Cir. 1990). The court called the client's attempt to renege on a valid contingency fee agreement "reprehensible." Id. at 653. Noting that the client had received the proceeds awarded to him by the trial court, the court admonished that "[a] client may not accept the benefits of a valid contingency fee contract and subsequently contest his obligations thereunder." Id.

In Searcey, Denney, Scarola, Barnhart & Shipley, P.A. v. Poletz, 652 So. 2d 366 (Fla. 1995), the court held that the "lodestar" method [See § 1.5:310] does not apply in the determination of a quantum meruit award. The lodestar method was adopted in Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145, 1148 (Fla. 1985) and was "never intended to control in cases where the disputed fee will be paid by the client or other contracting party. Poletz, 652 So. 2d at 368. The court found the lodestar approach "ill-suited for the task of assessing attorney's fees due as damages for breach of an agreement for the payment of fees because it does not allow for consideration of "the totality of the circumstances surrounding the professional relationship" as required by Rosenberg v. Levin, 409 So. 2d 1016 (Fla. 1982). Poletz, 652 So. 2d at 368-69. "A quantum meruit award must take into account the actual value of the services to the client." Id. at 369. The court held that application of the factors set forth in Rule 4-1.5(b) are a good starting point for the determination, but the trial court is not limited to consideration of these factors.

The court must consider any other factors surrounding the professional relationship that would assist the court in fashioning an award that is fair to both the attorney and client. For example, the fee agreement itself, the reason the attorney was discharged, actions taken by the attorney or client before or after discharge, and the benefit actually conferred on the client may be relevant to that determination. The determination as to which factors are relevant in a given case, the weight to be given each factor and the ultimate determination as to the amount to be awarded are matters within the sound discretion of the trial court.

Id.

In Faro v. Romani, 641 So. 2d 69 (Fla. 1994), the Florida Supreme Court held that when an attorney who represents a client on a contingency basis voluntarily withdraws from representation before the contingency occurs, the attorney forfeits all rights to compensation. Id. at 71. When the lawyer voluntarily withdraws, terminating the attorney-client relationship, the contingency agreement likewise terminates. Id. The court further held, however, that "if the client's conduct make the attorney's continued performance of the contract either legally impossible or would cause the attorney to violate an ethical rule of the Rules Regulating The Florida Bar, that attorney may be entitled to a fee when the contingency of an award occurs. Id. Following Faro, the Fourth DCA held that when a firm voluntarily withdraws based on "irreconcilable differences" with the client before the occurrence of the contingency, the firm forfeits all rights to attorneys fees where continued representation is not legal impossible and would not cause an ethical violation. The Law Firm of Goldfarb, Gold, Gonzalez & Wald, P.A. v. Fiore, 1999 WL 1260010 (Fla. 4th DCA, Dec. 29, 1999). In Calley v. Thomas M. Woodruff, P.A., 751 So. 2d 599 (Fla. 2d DCA 1998), the court held that an attorney who withdrew based on his asserted belief that his client would not testify truthfully at trial forfeited the right to attorney fees. The attorney had a mere suspicion, which he had failed to confirm, that the client would not testify truthfully and had not taken any action to dissuade the client.

In Florida Bar v. Rue, 643 So. 2d 1080 (Fla. 1994), an attorney was suspended where the attorney’s contract with the client called for a penalty upon termination of the attorney’s services and provided for a fee for collection of insurance benefits that did not require any legal work. In Florida Bar v. Hollander, 607 So. 2d 412 (Fla. 1992), an attorney received probation and a public reprimand for entering a contract with his client providing that the client would immediately pay the attorney for all services rendered in the event of discharge or withdrawal, and also providing that the attorney would remain entitled to a share of any recovery by the client. The court found that this agreement on its face would permit the attorney to collect twice for the same work, and thus that the agreement had the effect of intimidating the client from exercising the right to terminate the representation.

1.5:240      Fee Collection Procedures

[The discussion of this topic has not yet been written.]

1.5:250      Fee Arbitration

Chapter 14, Rules Regulating the Florida Bar contains procedures for arbitration to resolve fee disputes.

1.5:260      Forfeiture of Lawyer's Compensation

In Faro v. Romani, 641 So. 2d 69 (Fla. 1994), the Florida Supreme Court held that when an attorney who represents a client on a contingency basis voluntarily withdraws from representation before the contingency occurs, the attorney forfeits all rights to compensation.

Where a contract for representation is void as constituting the unauthorized practice of law, the lawyer is not even entitled to quantum meruit and may be required to disgorge any fees received. Vista Designs, Inc. v. Melvin K. Silverman, P.C., 774 So. 2d 884 (Fla. 4th DCA 2001).

1.5:270      Remedies and Burden of Persuasion in Fee Disputes

Where a contract for representation is void as constituting the unauthorized practice of law, the lawyer is not even entitled to quantum meruit and may be required to disgorge any fees received. Vista Designs, Inc. v. Melvin K. Silverman, P.C., 774 So. 2d 884 (Fla. 4th DCA 2001).

1.5:300   Attorney-Fee Awards (Fee Shifting)

Primary Florida References: FL Rule 4-1.5
Background References: ABA Model Rule 1.5, Other Jurisdictions
Commentary: ABA/BNA § 41:311, Wolfram § 16.6

[The discussion of this topic has not yet been written.]

1.5:310      Paying for Litigation: The American Rule

The Florida Supreme Court has historically applied the American Rule that attorney fees may be awarded only when authorized by statute or by agreement of the parties or from a common fund. See, e.g., Hampton's Estate v. Fairchild-Florida Constr. Co., 341 So. 2d 759 (Fla. 1976). The award of attorney fees is a matter committed to the sound discretion of the trial judge, and will not be disturbed absent a showing of a clear abuse of discretion. DiStefano Constr., Inc. v. Fidelity & Deposit Co., 597 So. 2d 248 (Fla. 1992). Where a contract provides for attorney fees to be awarded to the prevailing party, the trial judge is usually without discretion to decline to enforce the provision, any more than any other valid contractual provision. Rose v. Rose, 615 So. 2d 203 (Fla. 4th DCA 1993); Jacobson v. Jacobson, 595 So. 2d 292 (Fla. 5th DCA 1992). However, a trial court has discretion "to disregard a fee provision where a party's unreasonable conduct and misuse of the judicial system would result in an unjust award." Remington v. Remington, 711 So. 2d 212, 213 (Fla 4th DCA 1998)(denying fees to overly litigious former wife despite attorney fees provision in settlement agreement with former husband).

Florida has adopted the federal lodestar approach for determining reasonable fees. Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145, 1148 (Fla. 1985). Under the lodestar approach, the number of hours reasonably spent, multiplied by a reasonably hourly rate, establishes the lodestar. This figure may then be adjusted up based on a "contingency risk" factor, or down, based on the "results obtained," if a party prevails on only some claims.

The first step in the lodestar process requires the court to determine the number of hours reasonably expended on the litigation. Counsel is expected to claim only those hours properly billable to the client. Inadequate documentation may result in a reduction in the number of hours claimed, as will a claim for hours the court deems excessive or unnecessary.

The second step requires the court to determine a reasonable hourly rate for the services of the prevailing party's attorney. The party seeking the fee has the burden of establishing the prevailing market rate. The number of hours reasonably spent on the litigation, multiplied by the reasonable hourly rate, establishes the lodestar. Once the court has arrived at the lodestar figure, it may add or subtract from the fee based upon a "contingency risk" factor and the "results obtained." Because the party paying the fee did not participate in the fee arrangement, that arrangement must not control the fee award. Further, in no event should the court awarded fee exceed the fee agreement reached between the attorney and the client.

Florida recognizes four categories of cases for purposes of determining reasonable attorney fees. The lodestar method is the starting point for determining fees in each category. The first category is "public policy enforcement" cases in which a statutory attorney fees provision is designed to encourage private enforcement of statutory policy, generally involving discrimination, environmental, and consumer enforcement issues. In these cases, the court should consider the twelve factors set forth in Blanchard v. Bergeron, 589 U.S. 87, 91 n.5 (1989)(quoting Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)):

(1) the time and labor required;
(2) the novelty and difficulty of the questions;
(3) the skill requisite to perform the legal service properly;
(4) the preclusion of other employment by the attorney due to acceptance of the case;
(5) the customary fee;
(6) whether the fee is fixed or contingent;
(7) time limitations imposed by the client or the circumstances;
(8) the amount involved and the results obtained;
(9) the experience, reputation, and ability of the attorneys;
(10) the "undesirability" of the case;
(11) the nature and length of the professional relationship with the client; and
(12) awards in similar cases.

Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990).

The second category concerns tort and contract cases, id., and shareholder derivative suits, Lane v. Head, 566 So. 2d 508, 510 n.4 (Fla. 1990). In these cases the court should consider the factors set forth in Rule 4-1.5(b):

(1) the time and labor required, the novelty, complexity and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;
(4) the significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained;
(5) the time limitations imposed by the client or by the circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, diligence, and ability of the lawyer or lawyers performing the service and the skill, expertise, or efficiency of effort reflected in the actual providing of such services; and
(8) whether the fee is fixed or contingent, and, if fixed as to amount or rate, then whether the client's ability to pay rested to any significant degree on the outcome of the representation.

Some factors relate to the number of hours, while some relate to the hourly rate. For example, the "novelty, complexity and difficulty of the questions involved" should be reflected in the number of hours spent.

In determining whether a multiplier is necessary, the court should consider whether: (1) the relevant market requires a contingency fee multiplier to obtain competent counsel; (2) the attorney was able to mitigate the risk of nonpayment in any way; and (3) any of the factors set forth in Rule 4-1.5(b) are applicable, especially the amount involved, the results obtained, and the type of fee arrangement between attorney and client. Quanstrom, 555 So. 2d at 834.

The court may apply a multiplier as follows: if success was more likely than not at the outset, the court may apply a multiplier of 1 to 1.5; if the likelihood of success was approximately even at the outset, the court may apply a multiplier of 1.5 to 2.0; and if success was unlikely at the outset of the case, the court may apply a multiplier of 2.0 to 2.5. Id.

The third category involves family law, eminent domain, and estate and trust proceedings, which have special factors that are relevant in setting the attorney fees. In some instances, a contingency fee arrangement is ethically prohibited or cannot be reasonably justified because payment in some amount is assured. In this third category of cases, a contingency fee multiplier is not justified, although the basic lodestar method of computing a reasonable fee "may be an appropriate starting point." Id. at 835.

The fourth category involves class actions resulting in a common fund from which attorney fees are to be paid. Kuhnlein v. Dep't of Revenue, 662 So. 2d 309 (Fla. 1995) The court in Kuhnlein reversed the trial court's ruling that the fee should be calculated as a percentage of the common fund, and held that the lodestar approach of Rowe and Quanstrom should be applied. The court also set 5 as a maximum multiplier for this category of cases, finding this higher number sufficient to alleviate the contingency risk factor and attract high level counsel to common fund cases while producing a fee which remains within the bounds of reasonableness.

In a partial contingency fee case, the attorney is not entitled to the same enhancement of the customary reasonable fee that would have been available if the case had been completely contingent. Lane v. Head, 566 So. 2d 508 (Fla. 1990).

Where one litigant is required to pay attorney fees incurred by another, the amount established by the court may not be based solely on the terms of a contingent fee contract. Ennia Schadeverzekering, N.V. v. Buzinski, 468 So. 2d 541 (Fla. 4th DCA 1985) If the parties have established attorney fees that are fixed rather than contingent, the award of attorney fees should not ordinarily exceed the agreed amount However, if the contracting party alleges facts establishing that the fee was below the customary rate because of that party's inferior economic status, then the burden shifts to the other party to disprove the allegation. Sotolongo v. Brake, 616 So. 2d 413 (Fla. 1992). In the context of a contract that the losing party will pay the prevailing party's attorney fees, the trial court must not mechanically award the attorney fees that the prevailing party has agreed to pay, if the other party claims that the fees are excessive. Dunn v. Sentry Ins., 462 So. 2d 107 (Fla. 5th DCA 1985).

Florida courts have held that the principles allowing courts to enhance fees by a contingent risk multiplier apply only to the award of fees from third parties, and do not govern fee disputes between attorney and client. Searcy, Denney, Scarola v. Poletz, 652 So. 2d 366 (Fla. 1995)(lodestar approach "ill-suited" to assess fees due as damages for breach of attorney-client contract); Albert v. Goldman-Link, P.A., 661 So. 2d 1293 (Fla. 4th DCA 1995).

Attorney fees may not be awarded on the basis of affidavit evidence, where the opposing party has objected to both the time expended and the reasonableness of the fees recited in the affidavit; the opposing party is entitled to an evidentiary hearing on the issue. Morgan v. South Atl. Prod. Credit Ass’n, 528 So. 2d 491 (Fla. 1st DCA 1988); Dvorak v. First Family Bank, 639 So. 2d 1076, 1077 (Fla. 5th DCA 1994); Lafferty v. Lafferty, 413 So. 2d 170 (Fla. 2d DCA 1982); Geraci v. Kozloski, 377 So. 2d 811 (Fla. 4th DCA 1979); Marchion Terrazzo, Inc. v. Altman, 372 So. 2d 512 (Fla. 3d DCA 1979). When affidavit evidence is permissible, such affidavit must be based on personal knowledge. Elser v. Law Offices of James M. Russ, 679 So. 2d 309, 311 (Fla. 5th DCA 1996)(finding affidavit insufficient where it stated: “The factual statements contained in this affidavit are based upon information I have obtained as legal counsel in this case from court records, the attached deposition with exhibits, and interviews conducted by me or on my behalf by employees of this law firm.”)

Pro Se Attorneys

An attorney who proceeds pro se is entitled to attorney fees where attorney fees are otherwise authorized. In Quick & Reilly, Inc. v. Perlin, 411 So. 2d 978 (Fla. 3d DCA 1982), a case of first impression, the court upheld an award of attorney fees pursuant to section 517.211, Florida Statutes (1979) to an attorney who represented himself in the litigation. Id. at 980. The Fourth DCA agreed with the Third DCA in Friedman v. Backman, 453 So. 2d 938 (Fla. 4th DCA 1984) and had “no difficulty in holding that, in a frivolous suit against a lawyer, he is entitled to attorney’s fees for his time and effort under Section 57.105, just as he is for services rendered by counsel he employs to represent him.” Id. at 938. Quick & Reilly and Friedman dealt with recovery of attorney fees pursuant to statute, but the Fifth DCA held that “the rationale and policy reasons for such an award remain the same when the award is based on a contract provision calling for attorney’s fees.” McClung v. Posey, 514 So. 2d 1139, 1140 (Fla. 5th DCA 1987).

However, in American Reliance Ins. Co. v. Nuell, Baron & Polsky, 654 So. 2d 289 (Fla. 3d DCA 1995) the Third DCA indicated that Quick & Reilly might need to be reconsidered in light of the United States Supreme Court’s opinion in Kay v. Ehrler, 499 U.S. 432 (1991). In Kay, the Supreme Court considered “the question whether a pro se litigant who is also a lawyer may be awarded attorney’s fees under [42 U.S.C.] § 1988.” 499 U.S. at 433. The Supreme Court concluded that under section 1988, policy considerations militated against an award of attorney fees to an attorney who represents himself. A close analysis of these policy reasons suggests that even if Florida courts were to reconsider previous opinions in light of Kay, the results might not change at least as to attorney fees claims based on contract.

In Kay, the Supreme Court was considering entitlement to attorney fees under section 1988. The court considered legislative intent and determined that the word “attorney” assumes an agency relationship and that Congress likely “contemplated an attorney-client relationship as the predicate for an award under § 1988.” Id. at 435-36. The court concluded that “the overriding statutory concern is the interest in obtaining independent counsel for victims of civil rights violations . . . and that Congress was interested in ensuring the effective prosecution of meritorious claims.” Id. at 437. The court noted

Even a skilled lawyer who represents himself is at a disadvantage in contested litigation, Ethical considerations may make it inappropriate for him to appear as a witness. He is deprived of the judgment of an independent third party in framing the theory of the case, evaluating alternative methods of presenting the evidence, cross-examining hostile witnesses, formulating legal arguments, and in making sure that reason, rather than emotion dictates the proper tactical response to unforeseen developments in the courtroom. The adage that “a lawyer who represents himself has a fool for a client” is the product of years of experience by seasoned litigators.

Id. at 437-38. The court then reasoned that a “rule that authorizes awards of counsel fees to pro se litigants—even if limited to those who are members of the bar—would create a disincentive to employ counsel whenever a plaintiff considered himself competent to litigate on his own behalf. The statutory policy of furthering the successful prosecution of meritorious claims is better served by a rule that creates an incentive to retain counsel in every such case.” Id. at 438.

However, the policy considerations in Kay may not apply to an award of attorney fees pursuant to a contractual provision. The purpose of the attorney fees provision in a contract is not to ensure that the litigant will be able to an encouraged to obtain competent counsel. Rather, the purpose of such a provision is to ensure that the litigant is made whole when required to litigate contractual obligations. Cheek v. McGowan Elec. Supp. Co., 511 So. 2d 977 (Fla. 1987); see also Bowman v. Corbett, 556 So. 2d 477, 479 (Fla. 5th DCA 1990) and B & H Constr. & Supp. Co. v. District Bd. of Trustees of Tallahassee Community College, 542 So. 2d 382, 289 (Fla. 1st DCA 1989) (quoting Cheek). Therefore, the analysis in Kay may be inapplicable to claims for attorney fees pursuant to contractual provisions and should not change existing Florida law.

1.5:320      Common-Law Fee Shifting

In the absence of an entitling statute or an agreement of the parties, attorney fees may be awarded when the attorney has created or brought a common fund into court, or in actions for wrongful attachment, false imprisonment, malicious prosecution, and slander of title. Merrill Lynch v. Ritchey, 394 So. 2d 1057 (Fla. 2d DCA 1981); Glusman v. Lieberman, 285 So. 2d 29 (Fla. 4th DCA 1973). One case has held that attorney fees may be awarded as a sanction for indirect contempt of court. American Bank v. Hooven, 471 So. 2d 657 (Fla. 2d DCA 1985). [For a discussion of how attorney fees are calculated, see 1.5:310.]

1.5:330      Statutory Fee Shifting

The Florida Statutes contain well over one hundred laws authorizing the courts to assess fees in specific types of actions. These statutes fall into two general categories: (1) statutes that direct the courts to assess attorney fees against only one side of the litigation in certain types of actions, e.g., against an insurer, or against the condemning authority in eminent domain actions; and (2) statutes adopting the English Rule, authorizing the prevailing party, whether plaintiff or defendant, to recover attorney fees from the opposing party, e.g., mechanics lien or landlord/tenant proceedings. Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145, 1148 (Fla. 1985).

Some statutes specify criteria to be used in determining reasonable fees. Where criteria are contained in the statute, the courts must use those criteria. Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990); Seminole County v. Coral Gables Fed'l Savings & Loan Ass'n, 691 So. 2d 614 (Fla. 5th DCA 1997).

Statutes awarding attorney fees must be strictly construed. Dade County v. Pena, 664 So. 2d 959 (Fla. 1995); Gershuny v. Martin McFall, 539 So. 2d 1131 (Fla. 1989). A statute which provides for reimbursement of “actual or compensatory damages,” does not include attorney fees. Bidon v. Department of Prof. Reg., 596 So. 2d 450 (Fla. 1992). Attorney fees may be awarded for litigating the issue of entitlement to attorney fees, but not for litigating the amount of attorney fees, under a statute allowing an award of attorney fees. State Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830 (Fla. 1993). In Mangel v. Bob Dance Dodge, Inc., 739 So. 2d 720 (Fla. 5th DCA 1999), the court held that a lawyer could not avoid this rule by including in the fee agreement with the client a provision that the client would be responsible for the time spent litigating both the entitlement to and the amount of attorney fees. Id. at 724.

Under a statutory fee shifting scheme, when a party prevails on only a portion of its claims, the trial judge must evaluate the relationship between the successful and unsuccessful claims and determine whether they can be conceptually separated. Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). In such a situation, the “results obtained” factor may provide an independent basis for reducing the lodestar figure. B & H Constr. & Supply v. District Bd. of Trustees of Tallahassee Community College, 542 So. 2d 382 (Fla. 1st DCA 1989); Fashion Tile & Marble v. Alpha One Constr., 532 So. 2d 1306 (Fla. 2d DCA 1988). [For a discussion of how attorney fees are calculated, see 1.5:310.]

1.5:340      Financing Litigation [see 1.8:600]

1.5:400   Reasonableness of a Fee Agreement

Primary Florida References: FL Rule 4-1.5(a)-(c)
Background References: ABA Model Rule 1.5(a), Other Jurisdictions
Commentary: ABA/BNA § 41:301, ALI-LGL § 34, Wolfram § 9.3.1

FL Rule 4-1.5(b) sets forth the eight criteria for determining a reasonable fee. FL Rule 4-1.5(c) states that the time devoted to the representation and customary rates need not be the sole or controlling factors; rather, all factors set forth in FL Rule 4-1.5(b) should be considered and may be applied in justification of a fee higher or lower than that which would result from application of only the time and rate factors. FL Rule 4-1.5(a) prohibits an attorney from entering into an arrangement for an illegal, prohibited, or clearly excessive fee. A fee is clearly excessive when a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee exceeds a reasonable fee to such a degree as to constitute clear overreaching or an unconscionable demand by the attorney, or when the fee is sought or secured by means of intentional misrepresentation or fraud. See Florida Bar v. Garland, 651 So. 2d 1182 (Fla. 1995)(attorney who altered time records to justify unearned fees obtained fee by intentional misrepresentation or fraud).

1.5:410      Excessive Fees

The Florida Supreme Court has imposed a variety of disciplinary measures on attorneys charging excessive fees in specific factual situations. In Florida Bar v. Forrester, 656 So. 2d 1273 (Fla. 1995), the court suspended an attorney for 90 days where the attorney hired to administer an estate placed $195,000 of the estate's funds into her operating account before the fee had been earned. The court found that the attorney had earned a fee of only $174,190, and ordered the attorney to repay the difference with interest prior to her reinstatement. In Florida Bar v. Doltie, 606 So. 2d 1158 (Fla. 1992), an attorney was suspended for one month and placed on probation for charging a client an amount in excess of that clearly stated in his written contract with the client. In Florida Bar v. Murphy, 614 So. 2d 1090 (Fla. 1993), an attorney was suspended for one year for coercing additional fees from clients outside the terms of the closing statements for attorney fees due. In Florida Bar v. Hollander, 594 So. 2d 307 (Fla. 1992), an attorney was reprimanded for taking the entire amount of a settlement in payment of his fees, where the retainer agreement with the client called for the attorney to receive one-third of any recovery. The attorney was ordered to repay two-thirds of the fee to the client. In Florida Bar v. McKenzie, 581 So. 2d 53 (Fla. 1991), an attorney was disbarred for charging an excessive fee, failing to investigate a probate estate, and submitting false testimony. The attorney was hired to represent an estate in probate. His inventory of the estate listed assets of over $458,000, leading to a fee of nearly $14,000 based on a no longer valid "Minimum Fee Schedule" of the local bar association. The attorney's inventory included a large amount of assets owned as tenants by the entirety by the deceased and his wife; such assets by law did not pass through probate. Final accounting revealed the actual value of the probated estate to be $853.75. At the time of final accounting, the attorney had already been paid $4,000, and continued to claim entitlement to the full $14,000. The court found the fee clearly excessive and, in light of the attorney's obvious failure to ascertain the true value of the estate and his "shocking and incredible" testimony at hearing, ordered him disbarred.

In Florida Bar v. Rood, 633 So. 2d 7 (Fla. 1994), an attorney received a one-year suspension for, among other violations, charging a client an excessive ten-percent contingency fee for an appeal, where the appeal never proceeded past the notice of filing. In Florida Bar v. McAtee, 601 So. 2d 1199 (Fla. 1992), an attorney was suspended for 91 days for taking an excessive contingency fee. The attorney's agreement with his personal injury client was for 28% of any sum recovered. Without notifying the client, the attorney also commenced representation of one of the client's creditors in the same matter, with the goal of satisfying the client's debt with the proceeds of a settlement from the insurance company defendant. After settling with the insurance company, the attorney took his 28% fee off the top, but also took 28% of the amount his client paid to the creditor. The court found that the attorney had taken an impermissible 39% total fee, and ordered repayment to the client of the amount the attorney took from the payment to the creditor.

In Florida Bar v. Nunes, 679 So. 2d 744 (Fla. 1996), an attorney was suspended for advising his clients that their son was eligible for a "green card" and accepting a fee for his services, despite the attorney's knowledge that the son's prior drug conviction and deportation made him absolutely ineligible for permanent residency in the United States.

1.5:420      "Retainer Fees:" Advance Payment, Engagement Fee, or Lump-Sum Fee

In Browne v. Costales, 579 So. 2d 161 (Fla. 3d DCA 1991), the court found an attorney's $20,000 fee in a dissolution of marriage case clearly excessive, where the attorney failed to secure any equitable distribution, lump sum alimony, permanent or rehabilitative alimony for the wife, and where the attorney failed to keep time records. The attorney relied on "unit billing" that included time necessary for him to fold the papers, stuff envelopes, and seal them, at a rate of $250 per hour. The court noted that FL Rule 4-1.5 does not provide for flat rates per task, and also noted that in Florida Bar v. Richardson, 574 So. 2d 60 (Fla. 1990), the Florida Supreme Court had disapproved unit or flat fee billing that bears no relationship to the actual time spent on true legal work. See also Hollub v. Clancy, 706 So. 2d 16, 19 (Fla. 3d DCA 1997) (award of attorney fees may not include unreasonable unit billing amounts).

1.5:430      Nonrefundable Fees

In Florida, nonrefundable fees are permitted. However, if the representation is cut short for some reason, any portion of the "nonrefundable" fees that has not been earned, must be refunded. Both the client and the lawyer intend that nonrefundable fees are to be the lawyer's regardless of what happens. Therefore, such fees are considered the property of the lawyer upon receipt and need not be placed in the trust account. FL Eth. Op. 93-2 (Oct. 1, 1993).

However, in Florida, a rebuttable presumption exists that prepaid fees are an advance deposit against fees for work that is yet to be performed. The lawyer bears the burden of rebutting this presumption. Therefore, it is important that the retainer agreement specify that the retainer is nonrefundable, even if it will be applied to the total fee billed to the client.

1.5:500   Communication Regarding Fees

Primary Florida References: FL Rule 4-1.5(e)
Background References: ABA Model Rule 1.5(b), Other Jurisdictions
Commentary: ABA/BNA § 41:101, ALI-LGL § 38, Wolfram § 9.2.1

Failure to keep a client informed regarding the amount of fees being incurred violates Rule 4-1.5(e). Florida Bar v. Vining, 761 So. 2d 1044 (Fla. 2000).

1.5:600   Contingent Fees

Primary Florida References: FL Rule 4-1.5(f)
Background References: ABA Model Rule 1.5(c), Other Jurisdictions
Commentary: ABA/BNA § 41:901, ALI-LGL § 35, Wolfram § 9.4

1.5:610      Special Requirements Concerning Contingent Fees

FL Rule 4-1.5(f) sets forth detailed requirements regarding contingent fee arrangements. For example, contingency fee arrangements must be reduced to a written contract signed by every lawyer participating in the fee. The rule sets forth the specific language that must be contained in the contract. FL Rule 4-1.5(f) also sets forth maximum percentages for contingency fees, and limitations on the division of fees between the primary and secondary attorneys on the case. The rule sets forth a “Statement of Client’s Rights for Contingency Fees” that must be read by the client and signed by the client and the lawyer at the outset of the representation.

The Florida Supreme Court, under prior DR 2-106(B), has ruled that the use of a contingent fee arrangement is “manifestly improper” in a case which presents no difficulty and might easily be handled by a layman, such as where the majority of an estate passes by operation of law. Florida Bar v. Moriber, 314 So. 2d 145 (Fla. 1975).

A contract that fails to adhere to the requirements of FL Rule 4-1.5(f) is against public policy and is not enforceable by the attorney who has violated the rule. Chandris, S.A. v. Yanakakis, 668 So. 2d 180 (Fla. 1995). The attorney would still be entitled to a recovery on the basis of quantum meruit.

In Fernandes v. Barrs, 641 So. 2d 1371 (Fla. 1st DCA 1994), the court held that an attorney could not use the written contract requirement of FL Rule 4-1.5(f) as a shield in a situation where there was evidence of an intent to form an oral contingent contract. The Chandris court expressly disapproved the Fernandes decision, but only “to the extent [it] may be read to hold that a contingent fee contract which does not comply with... the Rules Regulating The Florida Bar is enforceable by an attorney who claims fees based upon a noncomplying agreement.” Thus, it is unclear whether Chandris has overruled the Fernandes holding that the attorney may not seek to escape enforcement of an oral contract on the basis of noncompliance with the rule.

Even before the Chandris decision, Florida courts held that there must be some contractual arrangement between attorney and client for a contingency fee to be allowable. In a wrongful death suit brought by parents of a minor child killed in an automobile accident, the mother’s law firm was not entitled to recover a contingency fee from the father of the child, where the father did not sign a contract with the mother’s law firm for legal services and did not agree to any formal affiliation between his counsel and the mother’s law firm. Neither was the father’s attorney entitled to recover his contingent portion of the father’s recovery, where that recovery was due entirely to the efforts of the mother’s lawyers. Perez v. George, Hartz, Lundeen, Flagg & Fulmer, 662 So. 2d 361 (Fla. 3d DCA 1995).

A discharged attorney has no right to collect a contingent fee; his fee must be determined on a quantum meruit basis. Law Offices of Theodore Goldberg v. Fazio, Dawson, DiSalvo, 659 So. 2d 1200 (Fla. 3d DCA 1995); Adams v. Fisher, 390 So. 2d 1248 (Fla. 1st DCA 1980).

1.5:700   Unlawful Fees

Primary Florida References: FL Rule 4-1.5(f)
Background References: ABA Model Rule 1.5(d), Other Jurisdictions
Commentary: ABA/BNA §§ 41:901, 41:926, ALI-LGL § 36, Wolfram §§ 9.3.2; 9.4

Contingent fees are prohibited in criminal and domestic relations cases. FL Rule 4-1.5(f)(3)(A)-(B). A proposed amendment to the comment to this rule states that results-oriented or bonus fees have been found to be improper contingency fees.

1.5:710      Contingent Fees in Criminal Cases

FL Rule 4-1.5(f)(3)(B) prohibits entering into a contingent fee arrangement for representing a defendant in a criminal case. In Downs v. State, 453 So. 2d 1102 (Fla. 1984), the court held that, while a contingent fee contract is unethical in a criminal case, it does not alone establish denial of effective assistance of counsel. Such unprofessional conduct is one factor to be considered by the trial court under the totality of the circumstances, but the burden is on the defendant to prove that the contingent fee agreement affected trial counsel's representation.

1.5:720      Contingent Fees in Domestic Relations Matters

FL Rule 4-1.5(f)(3)(A) prohibits contingency fees in domestic relations matters. This prohibition has been judicially enforced on several occasions. Albert v. Goldman-Link, P.A., 661 So. 2d 1293 (Fla. 4th DCA 1995); Mason v. Reiter, 564 So. 2d 142 (Fla. 3d DCA 1990)(error to apply a contingency multiplier in a paternity action). The following provision in a fee agreement in a dissolution of marriage representation has been found to be an impermissible contingent provision:

In the event this matter is settled, or the matter is concluded by the entry of a Final Judgment of Dissolution of Marriage (at the trial level), an additional and final fee will be determined as due us from you, taking into consideration the results achieved and the complexity of the matter. This "bonus" fee shall be fair and reasonable.

King v. Young, Berkman, Berman & Karpf, P.A., 709 So. 2d 572, 573 (Fla. 3d DCA 1998).

1.5:730      Other Illegal Fees in Florida

In Florida Bar v. Spann, 682 So. 2d 1070 (Fla. 1996), a lawyer was found to have violated Rule 4-1.5(a) where he had entered into a contingent fee that provided that if his services were terminated before a settlement or final judgment was reached, then he would be entitled to payment for serviced rendered based on a specified hourly rate schedule. Thus, the client would be force to pay the lawyer immediately upon discharge even where the contingency had never been met.

1.5:800   Fee Splitting (Referral Fees)

Primary Florida References: FL Rule 4-1.5(g)
Background References: ABA Model Rule 1.5(e), Other Jurisdictions
Commentary: ABA/BNA § 41:701, ALI-LGL § 47, Wolfram § 9.24

FL Rule 4-1.5(g) provides for the division of fees between lawyers in different firms, subject to certain requirements. The total fee must be reasonable and the division of fees must be in proportion to the services performed by each lawyer or by written agreement with the client. The written agreement must fully disclose that a division of fees will be made and the basis upon which that division will be made, and must state that each lawyer assumes joint legal responsibility for the representation and agrees to be available for consultation with the client.

In Halberg v. W.M. Chanfrau, P.A., 613 So. 2d 600 (Fla. 5th DCA 1993), there was a written referral agreement under which the receiving attorneys agreed to assist the referring attorney, and the receiving attorneys agreed to pay the referring attorney 25% of the fees received from the client. The agreement contained a clause providing that the fee distribution "may" be adjusted based upon the extent of time and services rendered to the client. The receiving attorneys received a substantial sum for the client but declined to divide their fee with the referring attorney because of concern that to do so would violate FL Rule 4-1.5(g). Their stated concerns were that: (1) the agreement provided for a flat 75%-25% division of the fee, and stated only that the distribution "may" be adjusted based upon the proportion of services actually rendered, thus violating the requirement that the division must be based on the proportion of services rendered; and (2) a division of fees is not permitted because the referring attorney did not expressly assume joint legal responsibility for the representation or expressly agree to be available for consultation. The court found that it would be preferable for such a written agreement to track the language of FL Rule 4-1.5(g), but found that the rule authorizes the division of fees in accordance with the percentage provisions in the agreement as written.

In Robert A. Shupack, P.A. v. Marcus, 606 So. 2d 466 (Fla. 3d DCA 1992), the court held that, once the client discharged the plaintiff attorney and executed a new contingency fee agreement with the two other attorneys representing the client, the fee-sharing agreement between plaintiff attorney and the other two attorneys became invalid. See also Noris v. Silver, 701 So. 2d 1238 (Fla. 3d DCA 1997), in which the court applied common law joint venture principles to hold that there must be an express or implied agreement between the attorneys, and that a given attorney's routine practice in such matters is insufficient to establish such an agreement. The court went on to find that this result is consistent with FL Rule 4-1.5(g)(2).

Relying on the Preamble to the rules, the First DCA has held that a lawyer may not use the provisions of Rule 4-1.5(e) to invalidate a private contract with a referring lawyer. Mark Jay Kaufman, P.A. v. Davis & Meadows, P.A., 600 So. 2d 1208, 1211 (Fla. 1st DCA 1992). In Kaufman, the agreement provided that the referring lawyer was entitled to 50% of all gross contingency fees received by the lawyer accepting the referral, without performing any services. Id.; see also Lee v. Florida Dep’t of Ins., 586 So. 2d 1185, 1188 (Fla. 1st DCA 1991) (“To use rule 4-5.6 as the basis for invalidating a private contractual provision is manifestly beyond the stated scope of the Rules and their intended legal effect.”).

Lawyers can agree to divide fees only if "the division is in proportion to the services performed by each lawyer;" or with client consent if "each lawyer assumes joint legal responsibility for the representation and agrees to be available for consultation with the client." FL Rule 4-1.5(g). Therefore, a referring attorney may be held liable for the malpractice of a lawyer to whom a client has been referred, if the referring lawyer retains a financial interest in the client's case by agreeing to divide the legal fee. Noris v. Silver, 701 So. 2d 1238 (Fla. 3d DCA 1997). The court in Noris reasoned from the rule that a referring lawyer would retain responsibility for the client's representation and could be held liable for malpractice of the working lawyer. 701 So. 2d at 1240. The referring lawyer argued that because the agreement to divide fees was oral and therefore unenforceable he could not be held liable for any malpractice. The court agreed that the oral agreement would be unenforceable, but held that the unenforceability of the agreement would not shield the referring attorney from malpractice:

To hold otherwise would allow attorneys to thwart their responsibility to a client by intentionally disregarding the Rules Regulating The Florida Bar. This cannot be condoned. It would also be unfair to lawyers who comply with Rule 4-1.5 to allow an avenue of escape for those who do not.

Id. at 1240-41. The court explained that the burden would be on the plaintiff to prove the existence of the agreement. It would not be enough to prove that the working attorney had a "unilateral, subjective intent to pay a referral fee." Id. at 1241.