Arbitrating Legal Fee Disputes

Co-Op, Condo & Real Estate Advisor

PUBLISHED ON: September 17, 2020

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I am part of the New York State Fee Dispute Resolution Program, which handles disputes between attorneys and clients over legal fees which are between $1,000 and $50,000. I have conducted approximately 30 pro bono arbitration hearings, whether as a lone arbitrator or as part of an arbitration panel. The program is highly beneficial, as it helps resolve fee disputes quickly and inexpensively. This article provides pointers for attorneys and clients who may take part in such fee dispute hearings. Prior to a hearing, the complainant submits a written statement in support of their position, and then the other party submits a written response. Relevant documents, such as the retainer agreement, invoices and pertinent communications, are to be submitted with the statements.

At the hearing, the attorney has the burden of establishing the reasonableness of the fees. If a party is unhappy with the arbitration decision, they can request a trial de novo.

Be Prepared

A point that may seem obvious — but can’t be emphasized enough — is to come to the hearing prepared. At one hearing, a law firm sent an attorney who had never dealt with the client, had never handled any aspect of the litigation involved, and could not explain why any of the legal work performed was reasonable. The law firm sought a certain amount of unpaid fees, but had submitted invoices showing only half that amount had been billed. The attorney explained that the file, which supposedly had additional invoices and other relevant documents, had been sent to a warehouse for storage and couldn’t be located. Yet, the claim of having sent the file to storage made no sense, since the law firm’s statement had been submitted....