Of Attorney Flat Fees and the Minnesota Rules.

When considering hiring an attorney, it is important for the prospective client to understand what is expected before signing that engagement agreement. How a practitioner is compensated depends on a number of factors, including the nature of their practice, the complexity of the case, and so forth. Attorney fees are governed by Rule 1.5 of the Minnesota Rules of Professional Conduct.

One common means of attorney compensation is the hourly fee. The practitioner charges an hourly rate for time spent providing legal services to the client, and may also bill separate hourly rates for services of other professionals (such as paralegals, expert witnesses, etc.) who are needed in furtherance of the case. There may be different hourly rates for different services. In addition, there may be fixed expenses that are billed to the client, such as filing fees, court costs, incurred expenses, etc.

The practitioner may bill the client periodically along the way by invoice, or they may require that a certain sum be paid up-front: a retainer. The retainer funds are immediately deposited into a client trust account (CTA), or an IOLTA account. Those funds cannot be "commingled" (mixed) with any other funds. The practitioner bills against the retainer. If the case becomes more complex, and the agreement provides for additional funding, the practitioner may require the client to pay more into the retainer account. Conversely, if there are funds remaining in the retainer account when the matter has been completed, the practitioner must refund that unused amount to the client.

In the world of estate representation, practitioners engaged in probate administration--the process of closing a deceased person's estate through the probate process--typically bill hourly, and those rates depend on the complexity of the case, size of the estate, experience of the attorney, etc.

Another form is the contingency fee--the "you don't pay unless we win" method. This is frequently used by practitioners representing plaintiffs pursuing damages in tort cases, such as personal injury. If the plaintiff prevails at trial and receives a jury award, or if the opposing party agrees to pay a settlement, the plaintiff attorney collects a pre-agreed-upon percentage of the award or settlement, plus any other fees or expenses as set forth in the retainer agreement.

However, those of us who practice in the area of crafting estate-planning documents (myself included), tend to charge flat fees for legal services. As the name implies, a flat fee is simply an agreed-upon, fixed dollar figure to be paid by the client for the performance of certain legal services, such as drafting a will or power of attorney. Estate-planning attorneys typically require half or all of the flat fee in advance before starting the representation.

After having consulted with the client, the practitioner will give a quote for the services requested by the client. If the practitioner and client agree to representation, the client will be asked to sign an engagement agreement. Before the client signs, it is very important for them to thoroughly read and understand what is expected in the engagement agreement. The attorney has an obligation to explain this up-front; nevertheless, it is incumbent upon the prospective client to ask questions if there is any doubt.

There are some specific rules about flat fees, and the Minnesota Rules set those out.

Fee agreements cannot claim any fee to be non-refundable, or earned upon receipt. Naturally, it would be unfair for a practitioner to collect a fee and keep it if, for some reason, either party doesn't go ahead with the representation.

However, the agreement may claim the fee as an advance fee as the attorney's property--subject to refund.

In order for the attorney to charge a flat fee as an advance fee subject to refund, the attorney must notify the client in writing of five things:

1. The nature and scope of services provided;

2. the total amount of the fee and terms of payment;

3. that the fee will not be held in a trust account until earned;

4. that the client has the right to terminate the attorney-client relationship; and

5. that the client will be entitled to a refund of all or a portion of the fee if the agreed-upon legal services are not provided.

Here's how it works.

Example: An attorney requires the client to pay a $1000 fee in advance for her legal services drafting some documents. The attorney cannot claim that any of the $1000 fee is non-refundable, nor can she claim any of it as property of her or her firm. Makes sense, right? She hasn't earned the fee yet. However, the attorney can state that the $1000 is an advance fee payment, subject to refund. In other words, if either the attorney or her client chooses to end the representation, for whatever reason, the attorney is obligated to refund the client's advance fee--minus whatever portion of the advance fee the attorney has earned up to that point by her representation. If, in this example, the attorney had rendered some legal services in furtherance of the client's case, like doing research or drafting documents, she would be well within her right to keep a portion of the advance fee for those services. If the client disputes this, the attorney must take reasonable and prompt action to resolve the dispute.

When selecting an attorney to provide representation, it is important for the client to be fully informed before entering in an engagement agreement. A thoughtful attorney will state what will happen going forward, and should fill in all the blanks. But a wise client will ask for clarifications, if needed.

Some CLEs That May Be Of Interest To Estate-Planning Practitioners.

In addition to some of the upcoming Estate-Planning CLEs, such as the live, online Understanding Trusts seminar on July 28, and the big 2020 Probate & Trust Law Section Conference (live, online) on October 16 and 17, there are also a few web-based seminars that touch on subjects surrounding our practice area, and may be worth considering. Also, if you report this summer, the State Board has waived the 15-hour limit for on-demand CLE credit, so have at it.

I have listed a few that may be good for rounding out one's knowledge base, or as refreshers for those who practice in those areas. 

The following seminars are free for Mitchell Hamline alumni.  

Basics of Divorce Law for Non-Family-Law Attorneys is a 1-credit on-demand seminar that can bring in some basic knowledge of several important topics in an area that more than occasionally bumps into Estate-Planning practice.

Another good one we could take to heart is Seven Deadly Sins of Drafting from Forms (1-credit). Many of us--myself included--rely heavily on standard forms from which to build our work product. I use Minnesota CLE's venerable Drafting Wills and Trust Agreements Deskbook. But no deskbook or form can anticipate all potential situations. This is a seminar I plan to watch soon, as I need to pick up on any pitfalls I may be missing.

Other free on-demand seminars that may be interesting and helpful include Issues Under the "New" Minnesota LLC Act (1-credit), and Veterans Issues- Obstacles for Those Who Served (1-credit).

U of M:

If you need Elimination of Bias credits, the University of Minnesota Law School is offering The Minnesota Paradox: A Discussion About Racial Disparities in the Criminal Justice System (1-credit, free), on Wed. July 29, 2020. This seminar is an interactive panel discussion you can log onto via Zoom.

If You Are A Minnesota Attorney Whose CLE Reporting Deadline Is August 31, 2020...

...There's no time like the present.

Back in March, in response to the Governor's Orders re the COVID-19 pandemic, the Minnesota State Board of Continuing Legal Education had suspended the 15-hour credit limit under Rule 6(D) for on-demand CLE courses.

If you are in Category 3 and due to report this summer, now is the time to complete those credits with the convenience of on-demand video. If you get a Season Pass from Minnesota CLE, you can round out those credits due next month, and then get a good start on some of the credits needed for the next 3-year cycle (though the suspension does not apply to subsequent cycles and you will be held to the 15-credit on-demand limit).

You can find lots of free and low-cost CLEs offered on-demand. Check the area law schools. Mitchell/Hamline has many to choose from, as well as St. Thomas School of Law, and the University of Minnesota Law School.

Reviving My Solo Practice: Working With Estate-Planning Clients In The Era Of COVID-19.

As a solo attorney practicing primarily in the area of estate planning, there was a time when I could freely go about my day-to-day: meeting with individuals, couples and families, to address their needs for Wills, Powers of Attorney and Health Care Directives. I could turn on a dime, able to meet with the client at times and locations that were convenient for them in accordance with their busy lifestyles. Many clients would meet at my office. For others it was more convenient to meet at the client's home after their work hours, or at a local restaurant. I've even been asked to meet at a client's workplace break room during their lunch. Any port in the storm, I say, to help the client obtain the guidance they need while leaving a light footprint on their sometimes chaotic schedule.

That was five months ago.

Enter Coronavirus. By March, my practice ground to a standstill. No one wanted to venture out to do anything that wasn't deemed necessary, and the State of Minnesota wisely dialed back activities in response to the new pandemic. I decided to go on hiatus until we could get a handle on things and I could determine ways to minimize the risks of serving clients.

What to do? With the constant roller coaster of infection rates, the loads of misinformation, the patchwork of states all trying different approaches to address the pandemic, not to mention the near-absence of help at the Federal level, it is easy to see that dealing with the multiple threat vectors of COVID-19 is rife with variables. We knew from the start that this pandemic was different, and that it wouldn't be going away any time soon. COVID-19 is here to stay for a while and the new normal is to find ways to work around the risks. Like my Dad would say: "Improvise, adapt and overcome."

Today, that day-to-day has been turned on its head. I'm now getting inquiries from potential clients to draft Wills and other instruments. People are starting to want to get things done, tasks that they had put off for several months. Yet the pandemic rages on, no end in sight. I find myself striving to adapt my means of interacting with clients in a way that responds to the safety concerns brought on by this pandemic. All the while maintaining the same high level of service and professionalism. New times, new protocols. Most of what I previously did in-person I can now do remotely. I can meet with clients via phone or video conference for the initial screening conference. Other tasks are always easy to do remotely: emailing questionnaires, forms and engagement agreements, taking payments by mail and so forth. All of my document drafting is done alone in my home office. Fairly straightforward and no contact.

But in the end the client's Will needs to be executed, which requires the client and two other people (witnesses) to be in the same room with me, at the same time. Contact.

With a little creativity, and arranging chairs and tables, I was able to set up a means for social distancing in my office, allowing everybody to sit at least six feet apart from one another. Limiting the number of people in the office is key. If someone is not an essential part of the process, they're not in the room. My practice is just me--no associates, no staff. I also require that everybody wears a mask while indoors, myself included. The length of time spent in proximity to others indoors is a major factor in COVID-19 transmission, and I try to keep in-person meetings focused, concise and to the point. Let's get this done and get out.

Two things make the signing process go more quickly: Doing a Q&A session with the client via phone or video prior to the meeting, and having everything ready to go in the office prior to the meeting. Not much time anymore for the casual chat to cap off the representation, but most people understand that it's best to get things done and be on their way. Along with their newly-signed documents, I include an instruction sheet with helpful tips for what to do with the Will and how it will come in to play later.

So far, clients have been receptive to these protocols, and I have received no pushback, though it's early in the game. I want everyone--and the people in their lives--to be safe. However, the time may come when someone may not be comfortable meeting with three or four other people in a room. Some clients may be physically unable to travel to a meeting venue, and may be in a location where visitors are restricted (i.e., care facilities). How to accommodate that?

I have carefully considered a DIY option for executing estate-planning instruments. Normally, I would be very reluctant to send unexecuted documents to a client to sign on their own, and doing so is nothing to be taken lightly. Wills require signature by the testator (client), performed in the presence of two adult witnesses, who also sign. If the Will has a self-proved affidavit, a Notary Public is also required to authenticate. It's important for the attorney to be at hand, to ensure everything is being done correctly. In the DIY situation the client bears the burden of scheduling those people and there are a lot of moving parts in that process. Potentially a situation that could open the door to a malpractice claim if things go sideways later.

After lots of thought on the issue, I determined that if the only feasible way for the document to be executed is remotely, and there are no other practical options, I would employ a two-pronged approach. One, I would mail hard copies of the final documents directly to the client, and include a sheet with detailed, step-by-step instructions for how to execute them. And two, since even the best instructions can be misinterpreted, I insist on walking the client through the process in real time, via phone or video conference.

I haven't had to implement the DIY Will execution option yet, but the time will come, eventually.

As I'm just getting my practice ramped up again, these protocols will be a work in progress. No doubt I will be tweaking them as the landscape changes. Being a solo practitioner allows for some flexibility and the agility to quickly adapt to a dynamic professional environment.  These unprecedented times throw a completely new wrench into the works. It pays to always be thinking ahead and planning for change.