Jim was ready to get his will drafted. He picked a lawyer from an online search and met with him at the lawyer’s office. The lawyer quoted a fee to prepare the documents, they shook hands and Jim walked out the door confident everything would be handled.
Anyone see a problem here?
Let me help you out: There was no written fee agreement.
What Should a Written Fee Agreement Cover?
That is a huge red flag. When you hire an attorney for services, especially for document preparation, there should be a written fee agreement that confirms services and fees.
Here is what the fee agreement should do at a minimum.
1. Identify the client
This confirms who the lawyer is representing. If you are hiring the lawyer in a fiduciary capacity, such as a power of attorney agent, trustee, or executor, then that needs to be stated.
2. Describe in detail the services the lawyer is providing
Will she prepare an estate plan, meet with your advisers such as CPAs and financial planners, draft certain documents, render ongoing advice, or assist in funding a trust or changing beneficiary designations? Set it out clearly.
3. State how fees will be charged, paid, and earned
Estate planning lawyers usually charge flat fees, hourly fees, or a combination of the two. A flat fee is the total amount that will be charged for the services that are being rendered. An hourly fee is based on actual time spent. A combination might look like drafting and preparing the documents for a flat fee and then charging an hourly fee for any further meetings or changes to the documents after the initial draft.
Many lawyers require payment of the entire flat fee upfront and then describe when the fee is earned. For hourly fees, most require a retainer to be paid before any services are rendered, and then it is charged against as services are rendered.
4. Describe the time of performance for each of you
When are you expected to provide additional information? When will your documents be prepared?
5. Provide for confidentiality
Your communications with your lawyer are confidential, but you may want to allow your lawyer to communicate some information with your financial advisors, CPAs, or select family members. This should be set out in writing.
6. Explain the lawyer’s document retention policy
Some lawyers keep original paper copies of your documents, some keep electronic copies, and some do not keep copies at all. You are ultimately responsible for keeping track of your documents, so you need to know what the lawyer keeps.
7. Explain if the lawyer is providing tax advice
A lot of attorneys do not regularly render tax advice. You should be advised if the advice given to you includes tax advice.
8. Describe how you and the lawyer will communicate
You may feel secure with email communications, or you may just want snail mail. This should be addressed in the fee agreement.
9. Contain a State Bar-required disclosure for ethics complaints
This could also be posted in the lawyer’s office or contained in a letter, but it is required to be set out in writing.
10. Have a place for the date and your signature
You should read and sign the fee agreement before you pay the lawyer any money. Most attorneys will not open a client file or render services without a signed fee agreement and payment.
Estate Planning is Easy with Hammerle Finley Law Firm
With a team of experienced attorneys, Hammerle Finley Law Firm handles all estate planning professionally. Schedule a consultation today if you or a loved one need assistance navigating estate planning.
You have a business relationship with your lawyer. Treat it that way.
Virginia Hammerle is an accredited estate planner and represents clients in estate planning, probate, guardianship, and contested litigation. She may be reached at legaltalktexas@hammerle.com. This blog contains general information only and does not constitute legal advice.
