Volunteers Resolve Fee Disputes

By Ann D. Zeigler

Cheap. Quick. Final. There is no better way to resolve a dispute with a client about the cost of your work.
The 45-50 members of the Fee Dispute Committee have a single purpose: to act as members of arbitration panels in matters involving disputes over legal fees. Approximately ten of the committee members are non-lawyers, and each three-member panel has one lay member and two lawyers. About seven panels are called each year. The arbitrations are free to both the client and the lawyer.
The committee was formed in 1985 at the request of the State Bar of Texas to address the fact that State Bar grievance committees cannot issue binding fee awards. When fee disputes are lodged with the grievance committee, they are usually referred to the HBA for the fee dispute committee to process.
The committee addresses disputes related to calculation or payment of lawyers’ fees. This includes not only client complaints about lawyers’ fees, but also disputes between lawyers and disputes initiated by lawyers when clients fail to pay.
In general, the process is initiated by a telephone call from the unhappy client to the Houston Bar Association office, or a visit to the HBA website, for information and forms. The HBA office and the committee do not keep specific records of initial contacts, but the HBA maintains a tally of the inquiries regarding fee issues.
When the committee chair receives the completed forms from the client, an initial letter goes to the client and lawyer, specifically requesting agreement to binding arbitration. If either side does not agree in writing, the file is closed. This portion of the process takes about 45 days. If both sides agree to arbitrate, the committee appoints a panel and sets the arbitration date.
In general, the arbitration is held within 45 days after both sides agree to proceed. The arbitration itself takes about two hours, is procedurally informal and is generally held after regular work hours at the office of the panel chair. The panel’s deliberations are confidential, but a brief decision letter is issued within a few days. The letter, like any other binding arbitration award, is enforceable in Texas courts. The committee and the HBA vigorously defend the confidentiality of the deliberations.
If the lawyer and client have a contract providing for arbitration (regardless of whether the Fee Dispute Committee is designated as the arbitrator), the committee cannot compel arbitration, nor can the client use the committee to compel arbitration by a fiduciary.
Most of the disputes arbitrated through the years by the Fee Dispute Committee involve fees of less than $15,000. The average ranges from $2,500 to $12,000, but the dispute can involve substantial amounts, such as when contingency fees are in dispute. One notable dispute involved a 20 percent contingency fee in a case addressing the ownership of a multimillion-dollar winning lottery ticket. The client settled the litigation without informing the lawyer, and then disputed his fee. (The committee deals only with the reasonableness of the fee finally charged, and does not address the issue of client relations.)
Regardless, most disputes brought before the committee involve family law matters. Additionally, criminal defense fees paid by a third party are a common area of dispute. Although all levels of experience can be found in the parties to the disputes, the lawyers whose fees are disputed are often solos or small firms.
For information on the Fee Dispute Committee, contact Ashley Gagnon at the HBA office, 713-759-1133 or ashleyg@hba.org.

Ann D. Zeigler is a member of the editorial board of The Houston Lawyer and practices bankruptcy at Hughes, Watters & Askanase, LLP.

< BACK TO TOP >