We Can Work it Out: Mediating Fee Disputes

How can mediation help with attorney-client fee disputes?

Poor communication can cause a fee dispute between an attorney and a client. [1] Picture a situation where a client (let’s call him John) pays a lawyer (Bud) a retainer for representation in a criminal matter. During the initial consultation, Bud promises John that he will return the unspent portion of the money if the matter is resolved early. Over the next few months, John calls Bud several times and sends letters, but Bud never responds. John begins to wonder if Bud has done any work on his case at all! John finally fires Bud and asks him to return the unspent portion of the retainer. Bud tells him that he won’t return it because the retainer is “non-refundable.” John protests, but Bud tells him that he will keep the money and hangs up on him. John feels angry, frustrated, and powerless.

This is precisely the kind of situation that lawyers and clients want to avoid. John feels dissatisfied and might tell other people about his negative experience. John might be so angry and frustrated with Bud that he would file in Small Claims Court or District Court for the balance of the retainer. John could also go to the state Disciplinary Board and file a complaint against Bud for keeping the money. He might even expand his complaint to include other ways that he thinks Bud violated the Professional Rules of Responsibility in the state. Similarly, John might even file a legal malpractice claim against Bud. If John filed these complaints, he would spend a good deal of time and money, and he would also make Bud spend time and money defending himself against the charges. Neither John nor Bud would get what they wanted.

Bud and John’s situation is not unique. Fee disputes are relatively common and can be very harmful to lawyers, clients, and the legal profession as a whole. [2] Luckily, mediation can play a key role in addressing the issues in John and Bud’s fee dispute. It helps parties communicate and exploring options outside of what litigation could provide. [3] Mediation is helpful for fee dispute situations like John and Bud’s when there is an honest mistake or a lack of communication between the client and the lawyer. [4] It works to facilitate communication, identify shared interests, and generate unique options for a solution to the dispute that everyone agrees with. [5]

Mediation can help John and Bud identify their shared interests (peace and a quick resolution, for example) and then brainstorm about solutions that they couldn’t receive in litigation or other dispute resolution techniques.

Bud and John share an interest in resolving the matter quickly, cheaply, and satisfactorily for both of him. If John files in Small Claims Court or District Court, he faces an uphill battle because he is unfamiliar with the substantive law and procedures, and sometimes there are limits on the amount of money that a plaintiff can recover. [6]

Similarly, if John files with the State Disciplinary Board, the chances of receiving money from the Board or sanctions against Bud are relatively small because the Board is designed to address only the most egregious violations. A private dispute between a lawyer and a client about the interpretation of a contract probably wouldn’t be an obviously egregious violation, like fraud. [7]

Bud also doesn’t want to have to deal with the effects of these charges on his reputation, or hire a lawyer to defend him against the disciplinary or civil proceedings.

Once Bud and John identify their shared interests, they can brainstorm about possible solutions to their problem. If Bud explains why he needs to retain some (or all) of the retainer, and John explains why he wants some of the retainer returned, it may be possible for Bud and John to agree on a fair fee for Bud’s services.

Where can you find a mediator? In the above example, John could request that Bud attend mediation through a state bar association’s mediation program. (Many state bar associations have adopted mediation, arbitration, or mediation/arbitration programs, most of which are free). [8]

John and Bud could also set up mediation with a private mediation company or a law school clinic, or find a listing for a mediator online at sites like mediate.com. Additionally, if John or Bud files a lawsuit for the fees, they will probably have the opportunity to go through some type of court-provided mediation before the case comes up for trial.

If you’re involved in a fee dispute situation, consider mediation. It might be the best way for both parties to meet their shared interests.

End Notes

1 See Alan Scott Rau, Resolving Disputes Over Attorneys’ Fees: The Role of ADR, 46 SMU L. Rev 2005, 2067-2068 (1993):

2 See Lester Brickman, Attorney-Client Fee Arbitration: A Dissenting View, 1990 Utah L. Rev. 277, 278 (1990).

3 See James Melamed, What is Mediation? Available at http://www.mediate.com/articles/what.cfm. Accessed 1 May 2007.

4 See Julie M. Tamminen, Using Alternative Dispute Resolution to Handle Client Disputes, 11 Me. B.J. 213, 213 (1996).

5 See Morris, supra note 3, at 1057-1058. See Cecelia Morris, Guidelines for Mediation of an Attorney Fee Dispute, Practising Law Institute New York Practice Skills Course Handbook Series, 14 PLI/NY 1053, 1057-1058 (1998): 6 See Tamminen, supra note 4, at 213.

7 See Rau, supra note 1, at 2011.

8 See State and Local Bar ADR Survey, ABA Section of Dispute Resolution (2001), available http://www.abanet.org/dispute (last visited 15 February 2007).


Bernadette Hayes

Bernadette Hayes is a mediator and J.D. candidate. MORE >

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