OED reprimands lawyer for unreasonable fees, improper fee division, and related issues.

In re Lehat reads like a law school final exam.  The facts are a little unclear (be sure to read the opinion) as to some issues, but the facts seem to be as follows:

The lawyer was doing trademark work for the office, but was not registered to prepare patent applications.  He acquired a client through a legal services program provider he worked for who needed a patent filed on an improvement to a hair weave system.  (If you have seen my picture, or me, you will know I am not its target audience.)  Rather than simply refer her to a patent lawyer, or get a proper fee division agreement (e.g., he would receive fees in proportion to the work, which would have not been much) he took $5,000 from the client.  He paid $3,000 to a practitioner to prepare the case, who later returned $2200 of it, saying that he had really earned $800.  The practitioner thus had $4,200.  He did not put any part of the $4,200 he kept into his trust account, but deemed it a “relationship fee” that was earned upon payment.

The client brought a state action seeking refund of the $5,000 and the lawyer took the position that the $4,200 was his.  He seemed to assert both that he was reasonably billing $1,000/hour as a “relationship attorney” and that the $5,000 was a flat fee that was predicated on 5 hours work at $1,000 per hour.

The OED did not agree.  Based upon mitigating factors, it gave him a public reprimand and ordered him to return the money.

It is interesting to me for two reasons.  One is: only a reprimand?  The second is that the opinion discusses the distinction between a general retainer — earned upon payment, and is paid simply for the lawyer to be available in the future, at which time he’ll bill his hourly rate — and a special retainer, which we usually think of as an advance on fees, which goes into the trust account and is drawn down as the money is earned.

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.