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Fee estimate proposal generates opposition

Abrahamson

“I want lawyers put on notice of a potential significant change on something they do every day — set fees.”

Chief Justice Shirley S. Abrahamson
Wisconsin Supreme Court

A petition that would require attorneys to provide written estimates of total fees at the beginning of representation met vehement opposition at the Wisconsin Supreme Court’s administrative conference on Oct. 22. The proposal would also require that estimates be revised when it becomes apparent they will be greater than estimated.

Also meeting resistance were proposals to require that attorneys attain one CLE credit per every two reporting periods in a program related to billing, and require that attorneys inform their clients about the availability of mediation at the beginning of the attorney-client relationship.

Two other proposals in the petition, however, generated less opposition, although the State Bar opposes them as well: that written fee agreements be mandatory; and that attorneys provide a written response to any fee inquiry by a client.

The proposals, part of petition 03-04, were presented to the court by Donald J. Christl, of Reinhart Boerner Van Deuren SC, in Milwaukee, as chairperson of the Wisconsin Courts Fee Arbitration Study Committee.

Ultimately, the court decided not to vote on the petition, but to defer consideration of the proposals until the work of the Ethics 2000 Committee is presented to the court next summer. The court decided, at this time, only to acknowledge both the work of the committee, and the consensus noted above.

Speaking in favor of the proposal, but noting the resistance of bar members since its details became public, Christl observed that, initially, the estimate requirement was intended as protection for attorneys — so that if an attorney provided a fee estimate and the fees were reasonably consistent with the estimate, the attorney would make a prima facie showing of reasonableness in the event of any dispute.

Christl noted one instance the Committee studied in which the attorney submitted a bill of $134,000 to a client who was expecting a bill of only $5,000.

Even before opponents of the petition spoke against the petition, the court expressed an intention not to move quickly on the proposal.

Chief Justice Shirley S. Abrahamson observed that most members of the bar do not pay attention to proposals at this stage, but only take notice after the decision is made and they are informed of it. “I want lawyers put on notice of a potential significant change on something they do every day — set fees,” Abrahamson said.

Expressing the opposition of the State Bar’s Board of Governors was State Bar President George Burnett, of Liebmann, Conway, Olejniczak & Jerry SC, in Green Bay.

Burnett questioned the need for the proposal, noting that only 0.4 percent of fees result in disputes, and less than 4 percent of complaints to the Office of Lawyer Regulation (OLR) involve fee disputes.

Burnett suggested the proposal was “based on an intuitive feel that fee complaints underscore other complaints.”

Burnett argued that attorney fees cannot be compared to other types of fees for which consumers expect an estimate, such as auto repair, because of variables such as the behavior of the client, the adversary, or the adversary’s attorney.

Burnett also noted that estimates are impossible because, at the time an attorney accepts representation, he has only heard one side of the story. What seems simple becomes more complex, once both sides of the story are known.

Also, in personal injury actions, estimating a fee would create an unreasonable expectation in the client’s mind of what the recovery will be.

Lodi sole practitioner Michael W. Smith also spoke against the proposal, stating it would create an unreasonable and unworkable burden for private practitioners, and would not help attorneys provide quality services to clients.

Among the areas in which Smith maintained the proposal would be unworkable, he noted family law, litigation, estate work, and real estate development. At the outset of probate work, Smith noted, an attorney doesn’t know what claims will
be filed, what tax issues will arise, or how cooperative the personal representative will be.

Smith expressed no opposition to requiring written fee agreements, however, noting that he always does so anyway.

OLR Director Keith Selen, who is also a member of the committee that presented the petition, spoke, but only expressed the OLR’s agreement that fee agreements should be in writing, and attorneys should give written responses to fee inquiries.

Finally, Nathaniel Cade, of Michael, Best & Friedrich LLP, in Milwaukee, spoke against the petition.

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Addressing the proposal that attorneys must inform clients of the availability of mediation of fee disputes, Cade noted that the court has already denied petitions seeking mandatory fee arbitration.

As for providing a fee estimate at the beginning of the representation, Cade called the task an impossibility, and asserted there is no way to reasonably estimate fees until right before trial, after motions have been filed, the witnesses are known, and the length of trial can be estimated.

Debating the petition after the hearing, the court divided 4-3 on whether to take a preliminary vote to affirm any of the proposed changes “in principle.” Chief Justice Abrahamson, and Justices Ann Walsh Bradley and David Prosser supported doing so, to put people on notice the direction the court was heading.

However, Justices Diane S. Sykes, Jon Wilcox, N. Patrick Crooks, and Patience Roggensack were only willing to acknowledge the work of the committee, and the consensus of the parties that had appeared, but were not willing to adopt anything in principle.

Sykes, however, was willing to vote immediately against the proposed CLE requirement. Prosser also expressed reservations with that proposal, noting that, at the court’s most recent conference, it had adopted requirements that attorneys take mandatory CLE courses before representing adults as guardians ad litem.

David Ziemer can be reached by email.

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