Legal Ease Blog: Do Something! Review Your Retainer Agreement

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Aside from your jurisdiction’s ethical rules, the single most important document that defines your relationship with your client is your retainer agreement or engagement letter. When was the last time you reviewed your agreement?

Here are some essential elements to include in your retainer agreement:

1. Scope of work: Does your agreement accurately and specifically reflect the work you will perform for the client (and the work you won’t perform under the agreement?) If you’re retained for a litigation matter, does your retainer agreement include working on an appeal? Does preparation of a will for a client include a health care proxy, living will and durable power of attorney, or are will those services require a separate agreement (and a separate fee)?

2. A time limitation. Don’t leave yourself open for problems with clients that fail to return your retainer agreement. Your agreement should state specifically that the provisions contained within it (including the fee) are only valid if the agreement iss signed within a specific period of time (i.e. 2 weeks. one month, etc.) Make it clear that if the agreement (and retainer fee) are not received within that period of time, you are not obligated to represent the client.

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Read the rest of this retainer review at Legal Ease Blog and for help reviewing your retainer agreement and/or other forms or procedures in your office, feel free to contact Allison Shields, the author.

 

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This author does the best job of anybody I’ve seen lately at writing clear, concise, super-useful, practical, articles for solos and small firms. 

 

Law.com - N.Y. Bar Panel Urges Adoption of New Conduct Rules

Joel Stashenko

New York Law Journal (read Entire Article)November 7, 2007

Attorneys in New York state are a step closer to becoming the last Bar in the United States to have rules of ethical behavior based in form and substance on the American Bar Association’s Model Rules of Professional Conduct.

The New York State Bar Association’s House of Delegates last Saturday unanimously approved revisions that are designed to transform New York’s current Code of Professional Responsibility into new state Model Rules of Professional Conduct.

It took the State Bar’s Committee on Standards of Attorney Conduct nearly five years to produce the almost 500 pages of proposed rules, which will now be sent to the appellate division’s presiding justices for review and possible final adoption.

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Law.com: N.Y. Appellate Panel Finds Dead Man’s Law Applies in Disciplinary Matter

In a 4-1 decision, the appellate panel ruled that the Dead Man’s Statute did apply to a disciplinary proceeding, noting that the very language of the statute said it applied to “the hearing upon the merits of a special proceeding.”

The majority of Justices David B. Saxe, Luis A. Gonzalez and James M. Catterson said the situation In the Matter of Zalk, M-6672, clearly fit the elements of the statute and thus prevented Zalk from arguing that Gellman made an oral pledge to him. The court said it was therefore compelled to find that Zalk improperly converted client escrow funds.

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Read Entire Article

FOLLOWUP: Law.com - Lawyers Learn From HomeBanc’s Demise

Law.com - Lawyers Learn From HomeBanc’s Demise

Closing attorneys vow to accept only wire transfers after dealing with lender’s bounced checksAndy PetersFulton County Daily Report (full text)August 23, 2007

Even though a bankruptcy judge in Delaware this week saved them from financial ruin, real estate closing attorneys said they learned a powerful lesson from the collapse of HomeBanc Corp. — never accept anything but a wire transfer at closing.

At least a dozen Atlanta-area law firms received bounced checks from HomeBanc last month, before the company filed for Chapter 11 bankruptcy protection Aug. 9. By HomeBanc’s count, it bounced 134 checks worth at least $18 million, but the Georgia Real Estate Closing Attorneys Association estimates the figure was $28 million.

Assuming HomeBanc’s checks were backed by sufficient funds, lawyers had disbursed the money at closings — not only to the home’s seller and the previous mortgage holder, but also to agents for their commissions and to surveyors, court clerks and others whose payments occur at closing.

When the checks bounced, lawyers had to scramble to find ways to cover their positions. Some took out home equity loans, others filed claims on their Errors & Omissions insurance policies.

On Tuesday, the bankruptcy judge handling HomeBanc transferred ownership of the loans to the closing attorneys. This move lets the lawyers recover their money by selling the loans to banks or other mortgage lenders.

The bounced checks occurred as a result of HomeBanc getting squeezed by broad turmoil in the U.S. housing market and the global credit market. As the market tanked, HomeBanc’s primary source of funds, JPMorgan Chase, on Aug. 6 cut off money for the mortgages HomeBanc sold, according to HomeBanc’s court filings.

Regardless of the problems in the market, attorneys said the rubber check problem could have been prevented simply by requiring HomeBanc to fund its loans with wire transfers.

As a result, “some law firms are requiring 100 percent wired funds from everybody — lenders, buyers, even other attorneys,” said closing attorney Jennifer L. Dickenson of Dickenson Gilroy. “There is a really high sensitivity right now to how we get the money into our accounts.”

Why HomeBanc was allowed to fund mortgages with company checks, when the large majority of other mortgage lenders paid only by wire transfer, speaks to the clout HomeBanc carried in metro Atlanta — if not its level of intimidation.

“They were big enough they could frankly bully everybody,” said Jeffrey P. Ganek, managing partner of Ganek, Wright & Dobkin’s Midtown office. “You had to follow their rules.”

HomeBanc, or any mortgage lender, benefits by funding loans with checks as opposed to wire transfers, Ganek said. While wire transfers represent an immediate shift in money, checks take days to clear a bank, allowing HomeBanc to earn more interest on the money as it sat in escrow, Ganek said.

“Even if it’s only a day or two extra it’s sitting in an interest-bearing account, if you’re doing enough loans, it’s a lot of money,” he said.

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Read Entire Article

 

Law.com - Closing Attorneys See Red Over HomeBanc Mortgage’s Bad Checks

Real estate attorneys caught between covering bounced checks or risking bar violations after company files for bankruptcy

Andy PetersFulton County Daily ReportAugust 16, 2007

John K. Haley, a real estate closing attorney in Buford, Ga., left work July 31 thinking the HomeBanc mortgages he’d closed earlier that day had cleared.

That turned out not to be true. Haley was one of dozens of Atlanta-area real estate closing attorneys who received bounced checks last month from HomeBanc Mortgage Corp. Lawyers estimate HomeBanc may have issued $20 million or more in bounced checks July 30 and July 31. HomeBanc filed for Chapter 11 bankruptcy protection Aug. 9.

Because HomeBanc’s primary lender, JPMorgan Chase, stopped financing the company around the end of July, HomeBanc could no longer provide funds on the mortgages it had sold. That caused a big problem for some lawyers: HomeBanc had already issued checks to these lawyers, who then disbursed the money to sellers, real estate agents, surveyors and others.

That left numerous lawyers high and dry.

“These lawyers are really scrambling right now,” said C. Scott Logan, president of the Georgia Real Estate Closing Attorneys Association.

While the state’s “good funds” law requires lawyers to wait until checks have cleared the bank before closing a mortgage, in practice most real estate closing attorneys close mortgages when they have the check in hand, without waiting for the money to clear, Logan said.

In addition to being stuck with thousands, if not millions of dollars in bounced checks, these lawyers also worry they may have violated State Bar of Georgia rules. That’s because they could have disbursed money from an escrow account when the money really wasn’t there, creating a negative balance. It’s a violation of Bar rules for a lawyer to have a negative balance in an escrow account.

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Read Entire Article

Law.com - Lack of Retainer Leads Court to Order Firm to Return Fees Beyond Contingency

Anthony Lin–NY Law Journal–8/08/07

“A client retaining an attorney on a contingent basis, in the absence of clear and express language to the contrary, contemplates that the percentage fixed is to constitute payment for whatever services may be necessary to obtain collection of any judgment which may be recovered, whether the services be in connection with an appeal taken from the judgment or in connection with efforts to collect the judgment, or both,” the judge wrote in Siagha v. Katz & Associates, 603927/05.

She noted that there had only been one retainer agreement filed with the Office of Court Administration in the case, a standard form filed by Schwartz Gutstein. The judge also noted that none of the lawyers who actually represented Siagha had ever taken the step of obtaining a retainer agreement specific to the case. They also never wrote him a letter or e-mail describing or discussing their legal fees.

 

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“CL&P Blog: New York’s Attorney Advertising Rules Held Unconstitutional”

Click below for full text of ruling

New York’s Attorney Advertising Rules Held Unconstitutional

The Northern District of New York ruled July 23rd, 2007 that New York’s amended rules against attorney advertising are unconstitutional and permanently enjoined enforcement of most of the challenged provisions. The court agreed with Public Citizen’s argument that the state had not shown that the rules were necessary to help consumers and were not narrowly tailored to the state’s asserted purpose. In fact, the rules restricted truthful advertising that would benefit consumers.

Law.com - N.Y. Federal Judge Strikes Down Many New Attorney Ad Rules

N.Y. Federal Judge Strikes Down Many New Attorney Ad Rules

Finds state failed to prove that ban on certain content advanced goal of protecting public from misleading ads

Anthony LinNew York Law Journal (Read entire article)July 24, 2007

A federal judge has ruled unconstitutional most of the sweeping new restrictions on attorney advertising introduced earlier this year by the New York courts.

The restrictions, which went into effect Feb. 1, had barred lawyers from, among other practices, using nicknames that suggest an ability to obtain results or touting “characteristics clearly unrelated to legal competence.”

Alexander & Catalano, the Syracuse, N.Y., personal injury firm that challenged the constitutionality of the advertising restrictions, had previously run ads calling its lawyers “heavy hitters” and showing them towering over downtown office buildings or sprinting at impossible speeds to help clients.

The four presiding justices of New York’s Appellate Division, who are charged with overseeing attorney discipline, first unveiled proposed restrictions on attorney advertising last June to address concern that outrageous and aggressive lawyer ads were misleading the public as well as harming the image of the profession.

But Northern District of New York Judge Frederick J. Scullin ruled that the state had largely failed to show that its wholesale prohibitions of certain kinds of content had advanced its interest in protecting the public from misleading lawyer advertisements. Moreover, he said, the state had failed to show less onerous means could not achieve the same ends.

“Defendants have failed to produce any evidence that measures short of categorical bans would not have sufficed to remedy the perceived risks of such advertising being misleading,” the judge wrote in Alexander & Catalano v. Cahill, 07 Civ. 117. “There is nothing in the record to suggest that a disclaimer would have been ineffective.”

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Along with the bans on nicknames and nonlegal characteristics, prohibitions on active client testimonials, portrayals of judges and fictitious law firms and the use of Internet pop-up ads were also struck down as unconstitutional in Scullin’s decisio