Learning from Lincoln: The Ethics of Attorney’s Fees

By Judge Allen Phillips, Jackson

Allen PhillipsBefore becoming our 16th President, Abraham Lincoln was a midwestern prairie lawyer. Handling a variety of cases, it is said his fees were generally in the $5 to $20 range, though he once charged a railroad $5,000 (a fee equal to over $169,000 in today’s dollars) to handle a particularly important case. Lincoln had to sue the railroad to collect it.

In Lincoln’s time, attorneys were yet to labor under any rules of professional conduct regarding fees, or anything else for that matter. But, 175 years or so after Honest Abe hung his shingle, Tennessee lawyers must adhere to Tennessee Supreme Court Rule 8, R.P.C. 1.5. This post looks to that rule in the context of fees in the Court of Workers’ Compensation Claims.

The majority of attorney’s fees in workers’ compensation cases is governed by Tennessee Code Annotated section 50-6-226(a)(1), which provides that fees of the employee’s attorney may not exceed 20%. (For a discussion of attorney’s fees for the wrongful denial of a claim or for the failure of an employer to timely initiate benefits, click here.)

Additionally, the employee’s attorney fee must be approved by the Court. But, when any attorney’s fee, whether that of the employee or the employer attorney, exceeds $10,000, section 50-6-226(a)(2)(C) requires the judge to consider RPC 1.5 and “make specific findings as to the factors that justify the fee.” (Emphasis added). The importance of specificity was emphasized by the Workers’ Compensation Panel in Keen v. Ingles Mkts., Inc., when it said that “[i]t is insufficient for a trial court merely to allude to the factors.” And, in Hardin v. W.A. Kendall & Co., the Appeals Board remanded a case for the trial judge to determine the appropriateness and amount of a fee.

So, what are the factors of RPC 1.5?

Specifically, subsection (a) reads in pertinent part as follows, with some insights of the author and some inspiration from the ‘ol Rail Splitter:

(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

You should point out the work performed on the case. For example, an itemization of hours spent and on what activity they were spent is helpful. So is your proposed hourly rate. Submitting an affidavit discussing the factors, or a attaching a billing record or activity log is also useful. Also, explain why the case required so much time; in other words, just what was so difficult about it, and what were the skills needed to handle it?

 

Lincoln

“A lawyer’s time and advice are his stock in trade.” — Lincoln

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

Though this determination is somewhat subjective, a case requiring significant time does interfere with other business. If it does interfere, and in fairness the client should understand that interference, tell the Court how the case did affect other work. The affidavit mentioned above is a great place to do so.

“Whatever piece of business you have in hand, before stopping, do all the labor pertaining to it which can then be done.” — Lincoln

(3) the fee customarily charged in the locality for similar legal services;

Entitlement to the customary fee ̶ generally 20% for employee attorneys ̶ may be and should be bolstered and supported by details. Remember, section 50-6-226 doesn’t say the fee is 20%; it says no fee shall be in excess of 20%. Also, like the first factor, the setting of a fair hourly rate and the justification for it is a plus. If you’re an employer attorney, you should support a fee of $10,000 or more with billing records and in good faith explain the justification for the rates.

“An exhorbitant fee should never be claimed.”  — Lincoln

(4) the amount involved and the results obtained;

Clearly, when asking for a contingent fee, the amount grows with the total award, a factor worthy of mention. Likewise, if you’re a prevailing employer attorney, emphasize the savings you obtained by the winning results.

“As a general rule, never take your whole fee in advance.” — Lincoln

(5) the time limitations imposed by the client or by the circumstances;

Time limitations caused by the case are noteworthy; explain how they contributed to the degree of effort to prosecute/defend the case.

“Leave nothing for tomorrow which can be done today.” — Lincoln

(6) the nature and length of the professional relationship with the client;

The nature and length of the relationship to the client is largely dictated by the complexity of the case, but discussing the factor is another chance to demonstrate to the Court what had to be done and how long it took to do it.

“Persuade your neighbors to compromise whenever you can.” — Lincoln

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services;

It is always beneficial to point out your experience with the type of case or workers’ compensation generally.

“I am not an accomplished lawyer.” — Lincoln

(8) whether the fee is fixed or contingent;

(9) prior advertisements or statements by the lawyer with respect to the fees the lawyer charges; and

(10) whether the fee agreement is in writing.

You should explain that you and the employee entered into a written contract for services and that the contract included the terms of the fee. If the contract did so, say so…it is always relevant to know the terms the parties agreed to.

“Settle the amount of the fee and take a note in advance.” — Lincoln 

(Lincoln’s sage advice on this point was way ahead of his time—RPC 1.5(b) admonishes that the scope of representation should be communicated to the client, “preferably in writing,” before or at reasonable time after beginning the representation.)

______________

Tennessee has “no fixed mathematical rule” for determining a reasonable fee. Killingsworth v. Ted Russell Ford, Inc. Instead, our Supreme Court recognized that “the determination of what constitutes a reasonable fee is still a subjective judgment” and that “the reasonableness of [a] fee must depend upon the particular circumstances of the individual case.” White v. McBride. Thus, one may see the importance of emphasizing particular circumstances in context of the above factors. This allows the Court to fulfill its statutory obligation to make specific findings justifying the requested fee. Indeed, the statutorily-imposed prerogative of the Court echoes the admonition of the Great Emancipator himself:

“The matter of fees is important, far beyond the mere question of bread and butter involved. Properly attended to, fuller justice is done to both lawyer and client.”

 

*All quotes were taken from Lincoln’s “Notes for a Law Lecture,” The Collected Works of Abraham Lincoln (Abraham Lincoln Assoc., Roy P. Basker, ed.,1953).

 

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