How Much is Too Much?

 Posted on August 04, 2007 in Uncategorized

I heard today about a local lawyer who had quoted a $150,000-plus fee to a person accused of a first DWI. In Texas, DWI is a class "B" misdemeanor with a possible 180-day sentence but more likely a probated sentence if the accused is convicted.

The lawyer didn't receive the fee (I probably wouldn't have heard about it if he had), but the story had me wondering about the Hog Rule ("pigs get fat, hogs get slaughtered") and more specifically the ethical implications of charging such a fee. If the client had, as the lawyer requested, brought him a cashier's check for nearly 200 grand on Monday, where would the lawyer stand ethically?

Generally, Texas lawyers can charge their clients whatever their clients will agree to pay. The only limits under the Texas Disciplinary Rules of professional conduct are that the fee must be legal (by which is meant, I suppose, that we can't get paid in kilos of cocaine) and conscionable.

"A fee is unconscionable," says the rule, "if a competent lawyer could not form a reasonable belief that the fee is reasonable." Texas Disciplinary Rule of Professional Conduct 1.04. That doesn't make things much clearer. The rule goes on to list eight relevant factors in determining whether a fee is "reasonable":

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;(3) the fee customarily charged in the locality for similar legal services;(4) the amount involved and the results obtained;(5) the time limitations imposed by the client or by the circumstances;(6) the nature and length of the professional relationship with the client;(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

In a jurisdiction in which most lawyers are charging between $7,500 and $10,000 for representation on first DWI cases, it's hard to conceive of a fee 15 to 20 times as large being objectively reasonable.

When young lawyers ask me what they should charge for a particular case, my answer is usually "whatever the market will bear." But the market usually won't bear an unconscionable fee; most people don't have enough money to pay a fee that is even arguably unconscionable for top-notch representation in a criminal case. If a multimillionaire were charged with DWI, would it be unconscionable to charge him a couple of hundred grand to represent him, or does there have to be a limit?

The commentary to Rule 1.04 says:

Two factors in otherwise borderline cases might indicate a fee may be unconscionable. The first is overreaching by a lawyer, particularly of a client who was unusually susceptible to such overreaching. The second is a failure of the lawyer to give at the outset a clear and accurate explanation of how a fee was to be calculated. For example, a fee arrangement negotiated at arm's length with an experienced business client would rarely be subject to question. On the other hand, a fee arrangement with an uneducated or unsophisticated individual having no prior experience in such matters should be more carefully scrutinized for overreaching. While the fact that a client was at a marked disadvantage in bargaining with a lawyer over fees will not make a fee unconscionable, application of the disciplinary test may require some consideration of the personal circumstances of the individuals involved.

Whether the fee is unconscionable might, in other words, depend in part on who the multimillionaire is. We can suppose that most multimillionaires are savvy businessmen who would not pay more than they need to for the service they want. Lawyers aren't fungible, though - we're not selling Chevys - and each of us can set his own price for his own time. If a sophisticated, educated client pays $150,000 for DWI defense, it's because he wants a particular lawyer to handle the defense, and he's willing to pay whatever it takes. The fee is high, but it's hard to say that it's unconscionable.

People accused of crimes feel under a lot of pressure. It's not difficult for a lawyer to convey the false impression that an unsophisticated accused had better hire the lawyer right away or else. That's why I recommend that people accused of crimes talk to several lawyers in person, and take along a confidant, in order to make sure that they're being treated fairly.

In the case of the more-than-$150,000 DWI fee, the lawyer was not extraordinarily experienced, reputable, or able, and the client was not particularly sophisticated (his family had money because of a personal injury settlement). But the client was sophisticated enough not to agree to the fee. The question of whether the fee was ethical would only have arisen if the client had agreed. Then the lawyer would have been in the position of the dog who, having finally caught a car, has to figure out what to do with it.

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