If you think your lawyer has overcharged you in legal fees, your first step should be talking to your lawyer. Lawyers make mistakes, so it’s possible that the issue can be resolved with a simple conversation. Or, your lawyer might be able to answer your questions and justify the charge. (To learn more, see our article on understanding your bill for legal services.)
If you’re not able to resolve the issue, there are more formal ways of challenging your legal bill. However, you should consider how much money is at stake and whether it’s worth the time and effort to dispute the bill.
The easiest and most cost effective way of challenging your legal bill is through fee arbitration. Most local bar associations—the professional organization for lawyers in your county—offer fee arbitration when there is a dispute over attorneys’ fees. If your local bar association doesn’t have a fee arbitration program, your state bar association probably does.
Arbitration is an informal conference held before one or more neutral third parties called “arbitrators.” Arbitrators are typically attorneys and members of the community who have been trained in legal fee dispute matters. You and your lawyer will explain your positions to the arbitrators and provide relevant documents or other evidence. After hearing from both sides, the arbitrators will make a decision about how much the fee should be.
Arbitration can be binding or non-binding. In binding arbitration, the decision is final and both parties must abide by it. In nonbinding arbitration, the decision is a recommendation only. However, the recommendation might become final if you don’t dispute it within a certain amount of time (often 30 days).
In many states, an attorney must participate in fee arbitration if a client requests it. However, if the lawyer requests arbitration, the client usually doesn’t have to participate unless the client agreed to resolve fee disputes by arbitration in the fee agreement with the lawyer. (However, in some states—such as California—a client can only agree to resolve disputes through binding arbitration after a dispute has actually arisen.) In other states, arbitration is a voluntary process that both the client and lawyer must agree to participate in.
In most states, fee arbitration is available at no cost or for a relatively low fee (usually in the range of $50 to $300). However, in some states, the fee might be higher. For example, in some counties in California, the filing fee for arbitration is 5% of the amount in dispute. In some states, the party filing for arbitration pays the fee. In other states, the parties split the fee.
Many local bar associations also have mediation for fee disputes, either instead of fee arbitration or in addition to fee arbitration. Mediation is essentially an informal negotiation session between you and your lawyer, with the help of a neutral third party (called the “mediator”). Unlike in arbitration, the mediator will not actually make a decision or recommendation. If you and your lawyer can’t agree on a settlement, you may continue on to fee arbitration or to court.
If your dispute is over unpaid legal bills, your lawyer might decide to sue you in court. However, in many states, your lawyer must give you notice and an opportunity to request fee arbitration instead. You typically have a short period of time, such as 30 days, to request fee arbitration. Otherwise, the case will proceed in court.
If your dispute is over legal fees that you’ve already paid or funds that your lawyer is withholding, you may also sue your lawyer in court. However, the court process is often more expensive, takes longer, and can be more difficult to navigate. If the amount of money at stake is substantial enough, you may want to consider hiring a lawyer to assist you.
Reporting Your Lawyer to the State Bar
If your lawyer’s actions were dishonest or deceitful, you might also want to file a complaint with your state’s bar association. Every state has a disciplinary board that investigates potential ethical violations by lawyers. Most of the time, a simple dispute over legal fees is not a disciplinary matter. However, if you suspect that your lawyer has stolen from you, charged you outrageous fees, committed fraudulent billing practices, or conducted illegal activity, you should report the matter to your state bar association (or disciplinary board). To learn more, see our article on how to report a lawyer for an ethics violation.
Many state bar associations have special funds to compensate clients whose lawyers illegally took money from them (called a client security fund or client protection fund).
Questions for Your Attorney
- How many hours does it usually take to resolve a case like mine?
- How often will you be billing me?
- Can you explain this charge for legal research and how it helped my case?