Don’t Lose Out on Your Fees in a Neighbor Dispute Case

neighbor_126391374Disputes between neighbors over a fallen tree or a fence line can be extremely emotional. And when these disputes turn into litigation, this heated emotion can make it very expensive for your client. Here are 5 tips to make sure that at least your attorney fees get paid in the end.

When dealing with a neighbor dispute case, always advise your client to think carefully before suing. Explain that it may end up costing more to sue than he or she will actually recover in damages. But if your client is still raring to go, here are five things to consider to make sure that you’re never the loser when handling a neighbor dispute case:

  1. Use a written fee agreement. Written fee agreements are generally required under Bus & P C §6148 when the client’s total expense, including attorney fees, will foreseeably exceed $1000. A fee agreement is also required when the services are performed on a contingency fee basis (Bus & P C §6147), but that’s generally a bad idea in a neighbor dispute given the contentious nature of these claims and the low prospect for a large recovery. A fee agreement must spell out how compensation will be earned, such as a flat fee or an hourly rate, the general nature of the services to be performed, and the respective duties of the attorney and client. Bus & P C §6148(a).
  2. Get an advance. It’s generally a good idea to get an advance against fees to cover the estimated time involved. How much to get depends on what actions you’re going to take. For example, if you’re just writing letters and trying to negotiate with opposing counsel, you may want to ask for a minimum of $1000. If the case will go to mediation or neighbor dispute resolution, you could ask for that amount plus the anticipated time and costs related to the dispute resolution session. If a lawsuit is anticipated, you may decide to ask for $7500 or more and ask the client to keep an additional $1000 in your trust account after billing more than $6500 in time and costs.
  3. Consider a flat fee. In some situations, you may decide that the best course of action, at least initially, is to simply help the client write a letter to send in his or her own name to the neighbor in the dispute (assuming that the neighbor isn’t represented by counsel). For this work, maybe charge a flat fee for the time spent drafting the letter rather than an hourly rate.
  4. Explore limited scope representation. Limited scope representation (sometimes called unbundling) is a “relationship between an attorney and a person seeking legal services in which they have agreed that the scope of the legal services will be limited to specific tasks that the attorney will perform for the person.” Cal Rules of Ct 3.35(a). If your client has limited means, maybe explore limited scope services for a flat fee. Limited scope representation could include, e.g., preparing pleadings and other court papers for the client to file in pro per.
  5. When representing a group of neighbors. When you represent a group of neighbors who are, e.g., opposing a proposed zoning change or issuance of a zoning permit before a planning commission, city council, or board of supervisors, you will typically work on an hourly fee basis, but you may agree to collect the retainer proportionally from each of the neighbors involved.

CEB’s new book Neighbor Disputes: Law and Litigation covers the substantive issues involved in the most common neighbor disputes, as well as the always critical issues around getting paid for your work on these cases. Check out our video for this book. For more info on attorney fee agreements generally, including sample forms and checklists, turn to CEB’s Fee Agreement Forms Manual.

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© The Regents of the University of California, 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

7 Responses

  1. Julie: I continue to enjoy reading your blogs. In connection with this particular one, I recall learning that a true “retainer” is–under California rules–limited to strict rules and is oftentimes difficult to justify. On the other hand, an advance against fees is rather simple to implement, with the understanding that the advance will be held in trust and drawn down as fees are actually earned.

    I was wondering whether you were intending to advise utilzing an advance rather than a retainer.

    In any event, please do keep up the good work!!

    Best,

    Jeff

    • Thanks for this comment, Jeff. Here’s information from CEB’s Basic Practice Handbook on the difference between a “true” retainer and an advance against fees, I have edited the blog post to make this clearer.

      It is important to distinguish between a true retainer fee of an attorney, which is paid solely to ensure the attorney’s availability for a specific matter, and a fee paid in advance to cover ongoing fees in a legal matter. A “true” or “classic” retainer secures the attorney’s availability and is earned when paid, regardless of whether the attorney actually performs any services for the client. See Baranowski v State Bar (1979) 24 C3d 153, 163 n4. See also Cal Rules of Prof Cond 3-700(D)(2).
      Because a true retainer belongs to the attorney when paid, there should be no requirement that it be placed in the client’s trust account. In fact, placing it in the trust account might raise the issue whether it is in fact a refundable deposit, not a true retainer. See Cal Rules of Prof Cond 4-100(A). Placing a true retainer in the trust account might also be considered commingling.

  2. Great work, Julie! Having mediated a number of these cases, I would also add that the attorneys should always underscore the cost and impact such a dispute will have on their clients, going forward. The goal should be to mend the fences rather than war. This will help push the case to resolution. After all, the neighbors will have to live next door to each other after the case has resolved. This approach will very likely increase client satisfaction, as well.

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