Colorado Divorce and Real Estate Law Blog. (Vol 1.22)
By Craig Franklin Chambers Esq. 7851 S. Elati Street #204, Littleton, CO 80120
The Littleton Lawyer.
As an attorney practicing Colorado divorce law and real estate law in Denver, Littleton, Centennial, Highlands Ranch, and the surrounding areas, the issue of attorneys fees, retainer, and how they are charged always comes up.
Some types of cases are charged on a contingency fees basis which requires detailed disclosures as to how the fees are charged and what the rights and obligations are of the parties. Contingency fees are not allowed in criminal or domestic, divorce, or family law cases.
In family law cases--and in most civil cases such as real estate cases---attorneys fees are charged on a flat fee or on an hourly basis. The attorney usually requires a retainer as security for being paid for the costs of the case and for his legal fees for his time and concern in working on the case. What you are purchasing when you hire an attorney is the attorney's legal expertise, time and concern.
Each lawyer who works with the public is required to maintain a COLTAF trust account that is subject to the review by Supreme Court. The client gives the attorney a retainer that the attorney keeps in a trust account. The amount of the retainer is subject to negotiation between the lawyer and the client.
The retainer amount depends on the difficulty of the case. Some attorneys charge a low retainer, trusting the client will replenish the retainer if need be as the case progresses. A simple real estate review of a Colorado residential real estate contract or a lease-option, a real estate closing for a FSBO (For Sale By Owner) or a non-contested divorce, might not even require a retainer; a complex real estate case anticipating a jury trial might require a large retainer.
Upon receiving the retainer, the amount is deposited and sequestered from the lawyer's own funds in the trust account. After the work is performed, and the fees are earned, the lawyer pays himself and the costs he has incurred on the clients behalf from the trust. He sends the client an accounting of the funds, and the client replenishes the retainer to fund the case as needed.
Most attorneys have a written fee agreement explaining the scope of the representation and disclosing billing and collection procedures in more detail. These include how the attorney's time for the legal fees are calculated, what costs are likely to be incurred, and giving an estimate of the cost for the case.
The only legal requirements for the lawyer is that the fees are sequestered in a trust account until they are earned, that the fees are reasonable and that the client is informed in writing in advance as to the basis and method in which the legal fees are charged.
In most cases, as the case progresses,once the initial retainer is spent, the lawyer will ask for more funds to replenish the retainer so he can continue to work on the case. In the event the client does not pay the additional retainer,the attorney will withdraw from the case. This can be problematic in that at the time you need the attorney the most--during the preparation for trial and the trial itself--you may not have money to fund the case.
Please make sure and get an estimate of the entire case in the worst case scenario before you enter into a business relationship with an attorney. While no one hopes the case will go badly, there is no guarantee that the case will go smoothly, either. The attorney you hire takes on the responsibility for your case and becomes your fiduciary which means he or she must act in your best interests. That means being fair in the charging of fees and also being accountable as to where the money from the retainer is spent.