Lawyers & Legal Fees

The relationship between a client and his or her attorney is usually one that serves the client's needs and is satisfying to both the attorney and the client. At times, though, a disagreement may arise regarding the legal fees charged. When that occurs, it may help to know that the State Bar of Arizona provides a free method to help resolve those disputes.

Fee Agreements

The cost of legal services is generally agreed to between the lawyer and the client. And effective December 1, 2003, lawyers in most cases must communicate the basis or rate of their fee to their clients in writing.

Clients should always receive this fee information in writing. If the fee agreement is contingent on the outcome of a matter or if fees are shared between lawyers, the client also must sign the agreement. A written fee agreement is not required for regularly represented clients if the hourly rate will be the same as in other matters; however, a lawyer must communicate fee changes in writing. If the lawyer states in the agreement that a fee, retainer or other money collected from a client is "earned upon receipt," "nonrefundable" or uses similar language, the lawyer also must advise the client in writing that the client can end their relationship at any time and all or part of the fee may still be refundable.

Fee Disputes

When a dispute arises over the amount of legal fees, the State Bar's Discipline Department typically does not investigate. Instead, the State Bar operates a fee arbitration program to provide a free method of resolving those disputes. The Fee Arbitration Program is voluntary; for arbitration to be binding, both the client and the lawyer must agree to arbitrate.

Information About Fee Disputes
If you are disputing the amount of fees charged by your lawyer, the Fee Arbitration Program might be available to you. This is a free, voluntary program in which an arbitrator is assigned to determine what the reasonable fees should be for the legal services that were performed. The amount in dispute must be $500 or more, and the dispute must be filed within three years of the date the client-attorney relationship ended. Both the client and lawyer must agree to arbitrate by signing the Agreement to Arbitrate, and Fee Arbitration is only available if there is no litigation pending to resolve the fee dispute.

For more information about this program, call the Fee Arbitration Program at 602.340.7379. To order the fee arbitration packet, call 602.340.7288 and leave your name and mailing address, or download the forms at www.azbar.org/WorkingWithLawyers/feearb.cfm.

Resolving a Fee Dispute

The following is a summary of the steps involved in the arbitration of fee disputes before the State Bar Committee established for that purpose.

The complete rules of procedure governing the resolution of fee disputes are available along with the forms needed to file for arbitration, at the Web site listed above. A copy of Ethical Rule 1.5 regarding fees also is available there.

The signed documents should be mailed to:

State Bar of Arizona
Attn: Fee Arbitration
4201 N. 24th Street, Suite 100
Phoenix, AZ 85016-6266

1. Completing and Mailing the Forms
Read the Rules of Arbitration of Fee Disputes. Sign and complete the following forms:

• Petition for Arbitration
• Agreement to Arbitrate

Sign both forms and return them to the State Bar at the address above. Do not fax or email forms. You also must attach a copy of the fee/retainer agreement or letter you signed with the attorney or law firm.

If someone other than the client paid all or part of the attorney's fees, then that person also must sign these forms. Forms not completed or signed will be returned, causing a delay in the processing of the file.

Forms and attachments must be submitted in single-sided, looseleaf form. Do not use staples, tabs or binders.

2. Contacting the Opposing Party and Taking Jurisdiction
The State Bar will send copies of the forms to the opposing party, who will have an opportunity to respond. If the opposing party agrees to arbitrate, both parties will be bound by the award.

If the opposing party declines to arbitrate or does not respond, you will be notified and the file will be closed.

The petition will be reviewed to make sure that the dispute is within the Committee's jurisdiction. If the dispute is not within the Committee's jurisdiction, you will receive a letter explaining why the Committee declined jurisdiction.

3. Appointment of Arbitrators
A member of the Committee will appoint the arbitrator(s) to hear the dispute. Both parties will receive written notice of the appointment of the arbitrator(s). If either party objects to any or all of the arbitrator(s) chosen, a written objection must be sent to the State Bar within 10 days after personal service or date of the notice of the name(s) of the arbitrator(s).

4. Setting Time for Hearing
Both parties will receive written notice of the date, time and location of the hearing at least 15 days before the hearing date. This notice will be served personally or by first-class mail. If either party has not kept the State Bar informed of any changes in address, this notice will go to the last-known address and will constitute notice.

5. The Arbitration Hearing
At the arbitration hearing, both parties may present witnesses and documentary evidence, and both may be represented by an attorney. Witnesses may be cross-examined at the hearing. Any party to the arbitration may make arrangements to have the hearing recorded by a court reporter or by electronic tape recording at the party's own expense, provided notice is given to the opposing party and the arbitrator(s) at least three days prior to the scheduled hearing.

If either party fails to appear at the hearing without good cause, the arbitrator(s) may proceed with the hearing and resolve the dispute upon the evidence produced.

6. The Arbitration Award

A sole arbitrator is requested to render the award, in writing, within 20 days after the close of the hearing, and a panel should issue an award within 40 days after the close of the hearing. These are only suggested time frames; they are not mandatory. A signed copy of the award will be mailed to each party upon receipt and review by the State Bar office.

7. Award Is Final and Binding
The arbitration award is final and binding on all parties who agree to arbitrate by signing the Agreement to Arbitrate. The parties will have 30 days to comply with the award unless the arbitrator indicates otherwise. The award may be enforced by any court of competent jurisdiction.