Professional Documents
Culture Documents
Retainers & Remuneration of Lawyers 1
Retainers & Remuneration of Lawyers 1
Retainers & Remuneration of Lawyers 1
PROFESSIONAL ETHICS
RENUMERATION OF
ADVOCATES & RETAINER
AGREEMENTS
PART 1
REMUNERATION OF
ADVOCATES
Modes of Advocates Remuneration
1) Hourly billing
2) Flat fee
3) Contingency fee (dependent on a win)
4) Percentage fee of a transaction
*lawyers are prohibited from undercutting
(charging below a certain threshold) (legal
fees must not be illegal or unconscionable)
Deciding legal fees
• According to Prof. Ojienda, following factors
should guide one in assessing the reasonability of
legal fees:
– Did client make an informed decision while entering
into the legal agreement?
– Are the charged fees acceptable with respect to
previously decided similar cases?
– Have the circumstances surrounding the making of
the contract changed to an extent that makes the
contract unconscionable (unreasonable/impossible to
perform)?
Factors to determine reasonableness
of legal fees
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;
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…performing the
services; and
8) whether the fee is fixed or contingent
Agreements on remuneration
• Section 45 of the Advocates Act
Sec 45(1) establishes the ground upon which an agreement for
remuneration may be made. An advocate and his client may:
a) before, after or in the course of any contentious business, make an
agreement fixing the amount of the advocate’s remuneration in
respect thereof;
b) before, after or in the course of any contentious business in a civil
court, make an agreement fixing the amount of the advocate’s
instruction fee in respect thereof or his fees for appearing in court or
both;
c) before, after or in the course of any proceedings in a criminal court
or a court martial, make an agreement fixing the amount of the
advocate’s fee for the conduct thereof;
and such agreement shall be valid and binding on the parties
provided it is in writing and signed by the client or his agent duly
authorized in that behalf.
Contesting remuneration agreements
• Section 45(2) provides the grounds on which a remuneration agreement
may be contested, amended or distinguished.
• A contested agreement may be upheld, varied, set aside, or the trial Court
may order that the costs be taxed.
• Sec 45(2): “A client may, apply by chamber summons to the Court to have
the agreement set aside or varied on the grounds that it is harsh and
unconscionable, exorbitant or …the Court, whose decision shall be final,
shall have power to order–
– (a) that the agreement be upheld; or
– (b) that the agreement be varied by substituting for the amount of the
remuneration fixed by the agreement such amount as the Court may deem
just; or
– (c) that the agreement be set aside; or
– (d) that the costs in question be taxed by the Registrar;
– and that the costs of the application be paid by such party as it thinks fit.”
Invalid agreements(remuneration)
• Section 46 outlines invalid legal agreements (Professional ethics &
conduct demand that advocate not engage in unethical conduct).
Section 46:
Nothing in this Act shall give validity to–
• (a) any purchase by an advocate of the interest, or any part of the
interest, of his client in any suit or other contentious proceeding; or
• (b) any agreement relieving any advocate from responsibility for
professional negligence or any other responsibility to which he
would otherwise be subject as an advocate; or
• (c) any agreement by which an advocate retained or employed to
prosecute or defend any suit or other contentious proceeding
stipulates for payment only in the event of success in such suit or
proceeding or that the advocate shall be remunerated at different
rates according to the success or failure thereof; or
….invalid agreements continued
• (d) any agreement by which an advocate agrees to
accept, in respect of professional business, any fee or
other consideration which shall be less than the
remuneration prescribed by any order under section 44
in respect of that business or more than twenty-five per
centum of the general damages recovered less the
party and party costs as taxed or agreed;
• (e) any disposition, contract, settlement, conveyance,
delivery, dealing or transfer which is, under the law
relating to bankruptcy, invalid against a trustee or
creditor in any bankruptcy or composition.
PART 2
RETAINER AGREEMENTS
What is a Retainer?
• Halsbury’s Laws of England, 4th Edition page 103
– the act of authorizing or employing a solicitor to act on behalf
of a client constitutes the solicitor's retainer
– Even if there has been no written retainer, the court may imply
the existence of a retainer from the acts of the parties in the
particular case.”
• Black’s Law Dictionary 6th Edition, 1990
in the practice of law when a client hires an attorney to
represent him, the client is said to have retained the attorney.
The act of employment is called retainer. The retainer
agreement between the client and attorney sets forth the
nature of the service to be performed, costs, expenses and
related matters
Introduction to retainers
“A lawyer of towering reputation, just by agreeing to represent a
client, may cause a threatened law suit to vanish.” Bain v.
Weiffenbach (Fla. App. 1991) 590 So.2d 544.
• A Retainer is an upfront fee payable to secure the services of an
advocate
• It does not entail legal costs for services to be rendered
• It cts like a “booking” for legal services ie puts advocate “on call” to
handle client’s legal issues
• It prevents an advocate from representing/ advising a rival
• It is an incentive to compensate a firm/advocate for clients lost
• Retainer fees are non-refundable, but this can be invalidated if the
fee is deemed unreasonable by a court.
Elements of retainer agreements
• There has to be a client
• Defining a client (Sec 2 of the Advocates Act)
• “client” includes any person who, as a principal or on
behalf of another, or as a trustee or personal
representative, or in any other capacity, has power,
express or implied, to retain or employ, and retains or
employs, or is about to retain or employ an advocate
and any person who is or may be liable to pay to an
advocate any costs.
– Has power to retain (capacity)
– Exercises the power to retain (action)
– Is about to retain (intention)
Retainer cont…
• A retainer need not be exhibited in writing.
• In MISC. APP. NO. 698 OF 2004 A. N. NDAMBIRI & CO.
ADVOCATES V. MWEA RICE GROWERS MULTI-
PURPOSE CO-OPERATIVE LTD, it was held that, since a
retainer need not be in writing, there was no obligation
for the advocate to exhibit it
• According to Justice Fred Ochieng “the non-existence
of written instructions would not negate the fact that
the advocate had been duly retained.”
– Client may be illiterate thus unable to give written
instructions.
– Client may instruct advocate over phone.
…retainer cont
• Miscellaneous Application 590 of 2014 Omulele
& Tollo Advocates v Magnum Properties Limited
[2016] eKLR
– Court may imply the existence of a retainer from the
conduct/acts of the parties in the particular case.
– “The basic requirement in any retainer agreement is
that it be fair and reasonable. In the case of an
amended agreement, the attorney has the burden of
showing that the client understood the terms of the
agreement and that the attorney did not exploit the
client’s confidence in negotiating the terms of the
agreement.” Lawrence v. Miller (2007 NY Slip. Op.
09348
• In MISC APPL. NO. 400 OF 2001 HEZEKIAH
OGAO ABUYA t/a ABUYA & CO. ADVOCATES v
KUGURU FOOD COMPLEX LTD, Ringera J. (as
he then was) held as follows:-
– “An advocate duly instructed is retained and
where there is no dispute that an advocate was
duly instructed by the client in any matter, the
retainer cannot be said to be in dispute.”
Forms of Retainers
1. General retainer (secures the services of an
advocate in provision of legal services in non-
contentious business)(ends upon notice of
termination)
2. Non-refundable
3. Security (sum of money paid to you that you
hold in your attorney-client trust account, and
only draw on if your client fails to pay their bill in
full)
4. Specific- (For a particular assignment/persists in
a set period of time ie within duration of a suit)
Elements of a good retainer
agreement
• Define the scope of your services.
• Define the timing(duration) of your services.
• Explain the fee arrangement.
• State examples of the services to be billed to the
client.
• Explain the client’s obligation for costs.
• Explain your billing practices.
• Allow your client time to question your bill.
• Consider a fee arbitration provision.
Justification for retainer fees