Essentials for an Effective Fee Agreement
By Laura Popps
An effective fee agreement does far more than establish the fee for a representation. It establishes trust with the client, sets expectations about the attorney-client relationship, and clearly communicates important terms of the representation. In addition, a well-drafted fee agreement can be your best defense against a grievance or legal malpractice claim.
Unfortunately, many lawyers give short shrift to the fee agreement. In my work defending lawyers in Bar proceedings, I have noticed that many lawyers do not use a written fee agreement. Of those who do, their agreements are frequently missing key elements or fail to accurately state the law, especially regarding fees. In addition, written fee agreements often are not properly executed, making their protections largely worthless. This is regrettable, as the minimal effort it would take to get the agreement properly executed could make all the difference down the road should there be a dispute.
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There is no one-size-fits-all for fee agreements, and it is important to tailor certain specifics to your particular law practice. But below are some basics that are essential for most criminal law practitioners.
Format & Procedure
It is important not only that the agreement be in writing, but that you actually make sure the client signs, dates, and promptly returns it. It sounds obvious, but I have defended numerous grievances where the lawyer had a written fee agreement, and even gave it to the client to be signed, but did not follow up to make sure the client returned a signed and dated copy. This renders the agreement useless for purposes of defending misconduct allegations.
Fees & Costs
Texas Disciplinary Rule 1.04(c) requires that for any new client, you communicate the rate and basis of the fee. Clearly detail whether you are billing hourly or via a flat or fixed fee. If billing hourly, state the amount of the hourly rate, whether a deposit will be required, and when or how it will need to be replenished during the representation. Explain that the deposit amount does not represent the entirety of the fees for the representation.
If charging a flat or fixed fee, be clear on exactly what services are encompassed within that fee. I encourage the use of benchmarks within a flat fee agreement, to lessen any disagreements about what amount has been earned should the representation end early. This also allows the attorney to deem portions of the fee “earned” during the representation rather than waiting until the representation is complete. Finally, it is common to see flat fees designated as “earned upon receipt” and “non-refundable.” This is incorrect. Flat fees are not earned until the legal work for which the fee is paid is completed. It is important not to misstate this in the fee agreement. If there is a dispute in the future over unearned fees, this language could actually work against you.
Clearly delineate that costs and expenses are not included within the fee. Spell this out in as much detail as possible, listing all costs that could reasonably be incurred and explaining that they are the client’s responsibility.
Scope of Representation
This may be the most important element of a good fee agreement. It is critical to specify exactly what the representation does and does not encompass. Spell this out in detail, expressly stating the legal services to be provided and what services are NOT included, such as new cases or upgraded charges (without a new agreement), appeals, notices of appeal or motions for new trial, retrials, expunctions or petitions for nondisclosure, revocation proceedings, etc.
It is also important to state exactly who the client is, particularly when someone else is paying the fee.
Expectations
It is important to set the stage early for client expectations. Tailor this part of the contract to include issues that come up frequently and unique problems you have encountered in the past. A few provisions to consider:
(1) actions by the client that will justify your withdrawal, including non-payment of fees or breach of any material term of the agreement;
(2) no guarantees as to outcome;
(3) copies of discovery provided by the State pursuant to CCP Article 39.14 cannot be provided to the client;
(4) the expected mode and frequency of communication, as well as acknowledgement of the risks associated with certain forms of communication and consent, as appropriate;
(5) expectations regarding client cooperation;
(6) confidentiality of attorney-client communications and the consequences of revealing such communications to third parties; and
(7) the client’s right to terminate the representation at any time.
File Retention
Explain your file retention process, how long the file will be retained, in what format the file will be provided, and the process for obtaining a copy of the client file.
The above list is not exhaustive and, depending on the facts and circumstances of a particular representation, there are other provisions that may need to be included. However, it is important to get a good fee agreement in place and to use it consistently with all new clients. Even a basic fee agreement is a great start, and is something you will likely continue to work on and improve for years to come.
NOTE: This article was originally published in the January/February 2025 edition of Voice for the Defense, published by the Texas Criminal Defense Lawyers Association.
Laura Popps defends Texas attorneys before the State Bar, advises on legal ethics, and handles criminal appeals. A former prosecutor, Laura has been Board Certified in Criminal Law by the Texas Board of Legal Specialization since 1999. She then served for ten years as Regional Counsel at the State Bar of Texas’ Office of Chief Disciplinary Counsel before founding her own firm.
Laura can be reached at laura@poppslaw.com or (512) 865-5185.