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Genevieve Hébert Fajardo, Clinical Professor
St. Mary’s Law School
Homecoming CLE, March 20, 2015
Part I: Fee Agreements
Today’s Takeaway on Fee Agreements:
 You are CRAZY and RECKLESS if you do not have a fee
agreement for every client and every matter
 Required in contingent fee agreements
 Fee cannot be illegal or unconscionable
 Obvious point, but we’ll discuss what is a “reasonable”
fee
Resources for Sample Fee Agreements
 Texas Young Lawyers Association:
 “Office in a Flash” (contingency, criminal, family):
http://www.tyla.org/tyla/index.cfm/projects/officeinaflash/
 Dorsaneo, Texas Litigation Guide
 Chapter 3: Professional Responsibility
 Chapter 22: Attorney’s Fees
 The Practice of Consumer Law: Seeking Economic Justice
(National Consumer Law Center 2d Ed.)
 Appx. A: Client Retainer Forms and Co-Counseling Agreement
 Berger, Mitchell, Clark, Pretrial Advocacy, chapter 4 (3d ed. 2010)
Elements of the Fee Agreement
 Identifies client
 Individual? Organization? Couple?
 Identifies subject of legal representation
 “We will file a breach of contract claim against Krappe
Konstruction, Inc. for their failure to complete your backyard
deck at 124 Toledo St., San Antonio, TX”
 Include limitations, such as appeals, later modifications, etc.
 Explicitly makes no guarantees
 “We will use our best efforts to represent you, but we cannot
guarantee any results.”
 “We will try to recover attorney fees from the other party, but
you will not necessarily receive 100% of your fees in return.”
Elements of the Fee Agreement
 Describes Fee Structure
 Hourly, Flat Fee, Contingency, Pro Bono
 Describes Expenses
 “You will be responsible for all out-of-pocket expenses
incurred in connection with my representation. These
expenses include charges for filing and serving court
documents, courier or messenger services, travel
expenses…” etc.
 Describes Billing Practices
 Monthly is typical
Elements of the Fee Agreement
 Covers Withdrawal and Termination Rights
 Describes Bar Complaint Procedure
 Required by State Bar: “The State Bar of Texas
investigates and prosecutes professional misconduct
committed by Texas attorneys. Although not every
complaint or dispute with a lawyer involves professional
misconduct, the State Bar Office of General Counsel will
provide you with information about how to file a
complaint. For more information, please call 1-800-9321900. This is a toll-free call.”
 Signed by Client and Attorney
A Note about Contingency Fees
 All fee agreements should be in writing – but especially
important for contingency fees.
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Tex. Gov't Code § 82.065(a)
Tex. Disciplinary Rules Prof'l Conduct 1.04(d) (a contingent
fee agreement “shall be in writing and shall state the
method by which the fee is to be determined”)
Celmer v. McGarry 412 S.W.3d 691, 709 (Tex. App. – Dallas
2013) (e-mail exchange was insufficient to create contract;
only possibility of fee recovery is quantum meruit)
A Note about Time Keeping
 Precise time keeping is critical to later fee recovery
 Gold standard: 1/10; 6 minute increments
 If you keep careful time throughout, this won’t happen
to you:
 Long v. Griffin, 442 S.W.3d 253 (Tex. 2014) (remanded
because attorney fee affidavit offered only generalities,
when it needed to reconstruct the work in detail)
 City of Laredo v. Montano, 414 S.W.3d 731 (Tex. 2013)
(remanded because testimony on attorney fees [e.g.,
“countless hours on motions and depositions”] was too
general to support an award)
Part II: Bases for Attorney Fee Recovery
 American Rule: Parties pay their own fees
 Attorney fees not recoverable absent contractual or
statutory authority
 Texas follows American Rule: only way to recover fees:
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Statute (most common)
Contract
Declaratory Judgment Act
Equity
(often covered separately) Discovery sanctions, family law,
worker’s compensation
Recovery by Statute: Fee-Shifting
 Fee-Shifting Statutes:
 In Texas, over 150 fee-shifting statutes, including:
 Landlord tenant
 DTPA
 Farm mutual insurance company vs. policyholder
 Whistleblower actions
 Fraudulent transfer
 Resources: Complete list of attorney fee-shifting statutes:
 Dorsaneo’s, Texas Litigation Guide § 22.27
 O’Connors, CPRC Plus at 901 (2011)
Recovery by Statute: CPRC Ch. 38
 CPRC § 38.001
 “A person may recover reasonable attorney’s fees from
an individual or corporation, in addition to the
amount of a valid claim and costs, if the claim is for:
(1) rendered services;
(2) performed labor;
(3) furnished material;
(4) freight or express overcharges;
(5) lost or damaged freight or express;
(6) killed or injured stock;
(7) a sworn account; or
(8) an oral or written contract.
Recovery by Statute: CPRC Ch. 38
CPRC § 38.002:
 “To recover attorney's fees under this chapter:
(1) the claimant must be represented by an attorney;
(2) the claimant must present the claim to the opposing
party or to a duly authorized agent of the opposing
party; and
(3) payment for the just amount owed must not have
been tendered before the expiration of the 30th day
after the claim is presented.
Recovery by Statute: CPRC Ch. 38
CPRC §38.002 “presentment” requirement in plain language:
 Before suit (at latest, 30 days before judgment), send
specific money claim to opposing party
 Be clear and specific about amounts
 Pleading should include language that claim was made and
defendant failed to pay within 30 days
 Sample language for demand letter and pleading in
Dorsaneo’s, Texas Litigation Guide, § § 22.111 and 22.112
 Remember: putting your claim in a pleading is required,
but not enough!
Recovery by Contract
 Look carefully at provisions in contract that
provide for attorney fees
 May cover prevailing party
 Note: CPRC §38.001 only applies to the person
who is making the claim, not the person
defending it.
Recovery by Equity
 Less common in practice
 Common fund doctrine (ex. Class action or
shareholder derivative suit)
 Claimant maintained suit at her own expense
 The suit benefitted others
 The suit created a fund from which attorney’s
fees can be paid
Recovery by
Declaratory Judgment Act
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Discretionary – Court “may” award fees
Reasonable and Necessary
Equitable and Just
Abuse of Discretion Standard
See e.g., Bocquet v. Herring, 972 S.W. 2d 19, 21 (Tex. 1998)
 Note: don’t try to get cute with the pleadings – can’t just
throw in declaratory judgment so you can ask for fees.
 See Stumhoffer v. Perales, __ S.W.3d __ (Tex. App. – Houston
2015); Bandera Cty. v. Hollingworth, 419 S.W.3d 639, 648 (Tex.
App. – San Antonio 2013).
Part III: Proving Up Legal Fees
Pattern Jury Charge 115.46
What is a reasonable fee for the necessary services of Paula
Payne’s attorney, stated in dollars and cents?
Answer with an amount for each of the following:
A. For representation in the trial court. Answer: ____
B. For representation through appeal to the court of appeals.
Answer: ____
C. For representation at the petition for review stage in the
Supreme Court of Texas. Answer: ____
D: For representation at the merits briefing stage in the Supreme
Court of Texas. Answer: ____
E: For representation through oral argument and the completion
of proceedings in the Supreme Court of Texas. Answer: ____
Proving Up Legal Fees – 3 Ways
 By affidavit
 By judicial notice
 By testimony
Proving Up Legal Fees – 3 Ways
 By affidavit
 Usually in summary judgment or discovery
motions
 Affidavit must cover similar factors as expert
testimony (see discussion below), including:
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Amount of hours worked
Services performed
Necessity of services
Billing rate (swear that it is reasonable and customary)
Reasonableness of fees
Proving Up Legal Fees – 3 Ways
 By judicial notice
 CPRC § 38.004:
“The court may take judicial notice of the usual and customary
attorney’s fees and of the contents of the case file without
receiving further evidence in:
(1) a proceeding before the court; or
(2) a jury case in which the amount of attorney’s fees is
submitted to the court by agreement.”
 Stipulations ok: parties may stipulate to reasonable fee
Proving Up Legal Fees by Testimony
 By testimony (also applies to affidavits)
 Pre-trial Tips: think about attorney fee testimony
from day one
 In response to requests for disclosure and other
discovery about experts, identify all witnesses (including
you!) who may be called to testify at trial.
 Keep careful time records, because redacted timesheets
may be introduced to prove reasonable amount of fees.
 Think about whether an independent expert should be
retained.
Proving Up Legal Fees by Testimony:
Qualifying an Expert
 Initial qualifications / foundation:
 Licensed to practice law
 Formal and legal education
 Geographic areas of practice
 Current job title and firm name
 Any Bar certifications as specialist
 Extracurriculars: participation in bar organizations,
legal articles written, speaking engagements
 Substantial experience with this type of litigation
Proving Up Legal Fees by Testimony:
Qualifying an Expert
 Foundation to testify about this case:
 Familiar with this case
 Familiar with claims and defenses asserted
 Description of how became familiar with case
 Familiar with hourly rates charged by lawyers in this
area for this type of litigation
 Familiar with the tasks involved
 Familiar with the tasks actually performed
Proving Up Legal Fees by Testimony:
the Opinion Part
 Description of nature and extent of services (incl. hours)
 Tasks were necessary
 Rates charged were reasonable
 Time for tasks was reasonable
 After multiplying time and rate, overall fee is reasonable
 May be adjusted upward for special expertise, difficult
case, etc.
What is a reasonable fee?
Tex. Disciplinary Rules of Professional Conduct 1.04(b)
(1) the time and labor required, the novelty and difficulty of the
questions involved, and the skill requisite to perform the legal
service properly;
(2) the likelihood, if apparent to the client, that the acceptance of
the particular employment will preclude other employment by
the lawyer;
(3) the fee customarily charged in the locality for similar legal
services;
(4) the amount involved and the results obtained;
What is a reasonable fee?
Tex. Disciplinary Rules of Professional Conduct 1.04(b)
(5) the time limitations imposed by the client or by the
circumstances;
(6) the nature and length of the professional relationship with the
client;
(7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; and
(8) whether the fee is fixed or contingent on results obtained or
uncertainty of collection before the legal services have been
rendered.
Adopted in Arthur Anderson & Co. v. Perry Equipment Corp., 945
S.W.2d 812, 818 (Tex. 1997)
What is the Lodestar Method?
 Sounds fancy, but it’s simple:
 (# of hours worked) x (prevailing hourly rate)
 Mentioned in many attorney fee decisions
 See, e.g., El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 759
(Tex. 2012)
 How do you know the “prevailing hourly rate?”
 Texas Lawyer annual survey; informal colleague survey
Support for Expert Testimony:
Time Records
 Accurate time records should be introduced
 Records show time spent on each task, and tasks should
relate to outcome of case
 May be redacted for privileged information
 Summarize all legal activities from date of employment,
including:
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Documents prepared / discovery process
Hearings attended
Research and discovery
Trial preparation
Settlement
Trial
Practice Tip: Paralegal Fees Count!
 Available for substantive legal work:
 Client and witness interviews, conducting
investigations, drafting documents, summarizing
depositions, etc.
 Defined at http://txpd.org/page.asp?p=Paralegal
Definition and Standards
 Prove up:
 Description of work
 Hourly rate and reasonableness
 Qualification of paralegal to perform legal work
 Legal work was done under attorney’s supervision
Practice Tip: Segregation
 Need to segregate fees when attorney fees are
recoverable for one claim (ex. DTPA), but not another
(ex. common law fraud). Or where there are multiple
defendants, multiple attorneys, etc.
 BUT, segregation not required when claims are not
separable
 e.g., there are multiple claims arising from the same
transaction, and they are so interrelated to be essentially
the same set of facts and proof.
Part IV: Fee-Shifting Statutes
 A social justice alternative to pro bono representation
 Create opportunities for private attorneys to serve legal
needs of low and moderate income residents with
valid legal claims
 Often actual damages are smaller than potential
attorneys fees.
 Ex. DTPA cases – fee-shifting encourages attorneys to
take small money cases that further important public
policy goals
 Other examples: landlord security deposits, foreclosure
scams, housing discrimination, 150+ others
Fee-Shifting Statutes
 The need:
 Unrealistic in typical consumer case to expect consumer
to pay hourly or percentage
 Essential for consumers to have access to counsel even
on relatively small claims
 The complications: a skeptical judiciary
 In Texas, fee expected to bear some reasonable relation
to amount involved.
 “Statutory fee-shifting is not a bonanza.” Concurring
opinion in El Apple I, Ltd. v. Olivas, 370 S.W. 3d 757 (Tex.
2012).
 SO, in small damage case, prepare to justify how your fee in
excess of recovery is reasonable given the facts of the case.
Genevieve Hébert Fajardo, Clinical Professor
St. Mary’s Law School
Homecoming CLE, March 20, 2015