attorney’s fees (getting paid for what you do)attorney’s fees (getting paid for what you do)...

ATTORNEY’S FEES (GETTING PAID FOR WHAT YOU DO)

CHARLES E. HARDY Higdon, Hardy & Zuflacht L.L.P. 12000 Huebner Road, Suite 200 San Antonio, Texas 78230-1204

Telephone: (210) 349-9933 Fax: (210) 349-9988

E-Mail: [email protected] www.hhzlaw.com

www.texasfamilylawinfo.com

State Bar of Texas FAMILY LAW 101 COURSE

July 31, 2011 San Antonio

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CHARLES E. HARDY Higdon, Hardy & Zuflacht, L.L.P.

12000 Huebner Road, Suite 200 San Antonio, Texas 78230-1204

Office: 210-349-9933 Fax: 210-349-9988

E-mail: [email protected] Website: www.texasfamilylawinfo.com

www.hhzlaw.com EDUCATION B.F.A. Journalism, Southern Methodist University, Dallas, Texas (1980) B.B.A., Business, Southern Methodist University, Dallas, Texas (1981) J.D., St. Mary’s University of San Antonio, San Antonio, Texas (1983) PROFESSIONAL ACTIVITIES & CERTIFICATIONS Partner - Higdon, Hardy & Zuflacht, L.L.P., San Antonio, TX State Bar of Texas – Member, Family Law Council Texas Academy of Family Law Specialist - Secretary 2011, Board Member (2006-present), Member (1989 – present) International Academy of Matrimonial Lawyers - Member (2009-present); American Academy of Matrimonial Lawyers - Member (2004-present) American Academy of Matrimonial Lawyers - TX Chapter: Past President (2010 – 2011), Board Member 2007 to 2011, Member (2004) San Antonio Family Lawyers Association - President (2002-2003; 1996-1997) Director (2000-2003; 1993-1997); Member (1989 to present) Texas Monthly Magazine “Super Lawyer” – 2006 - 2011 Bexar County Domestic Relations Office Advisory Board (2002 - 2009) Board Certified, Family Law, Texas Board of Legal Specialization (1989 – to present) Bexar County Community Justice Program Family Law Mentor (2002 – present) American Bar Association’s Family Law Pro Bono Award 2005 San Antonio Bar Association’s President’s Award - 2004 & 2005 “AV Rated” by Martindale Hubbell PUBLISHED PROFESSIONAL LEGAL ARTICLESU. S. Enforcement of Mexican Decrees, San Antonio Family Lawyers Association, November 17, 1999, San Antonio, Texas. Analysis of the Law and Key Issues: Procedures in Divorce Process, Texas Family Law Practice, January 27, 2000, San Antonio, TX. Applying Procedural Tactics to Enhance Your Client's Case, Advanced Family Law Drafting Course, December 12-13, 2002, New Orleans, Louisiana. Playing By the Rules – Using the Rules of Civil P rocedure, The Rules of Evidence and the Family Code to Bolster Your Child Custody Case, San Antonio Bar Association Family Law Section Seminar, June 2003, San Antonio, TX Advancing with the Basics – Rules of Procedure in the 21st Century, Tarrant County Family Law Bar Association, July 22, 2003, Fort Worth, TX Extreme Billing Makeover - Successful Billing Practices and the Mutual Fairness Doctrine, San Antonio Bar

Association Family Law Section Seminar, June 25, 2004, San Antonio, TX Use of Discovery at Trial – Ultimate Trial Notebook, December 9-10, 2004, Dallas TX New Year’s Resolutions for Successful Billing Practices! (40 Rules to Making More from your Practice), San Antonio Bar Association, Family Law Section Seminar, December 21, 2004, San Antonio, TX Discovery and Evidence: What I’ve Forgotten Since Law School!, San Antonio Bar Association Family Law Section Seminar, March 4, 2005, San Antonio, TX Make More Money - Play More Golf! Increasing Billing Efficiency & Client Satisfaction!, Corpus Christi Bar Association Family Law Section, March 11, 2005, Corpus Christi, TX Evidence and Discovery, TX Bar Advanced Family Law Course, August 8-11, 2005, Dallas, TX Litigation Alternative – Collaborative Law, Texas Academy of Family Law Specialists, 20th Annual Trial

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Institute; January 12, 2006, Reno, Nevada Innovative ADR Litigation Options, San Antonio Bar Association, Family Law Section Seminar, March 3, 2006, San Antonio, TX Standard of Value-How to Determine the Value of An Entity, American Academy of Matrimonial Lawyers, March 8-11, 2006, Cabo San Lucas, Mexico Proving Attorney’s Fees (Ways and Means), State Bar of Texas, Ultimate Trial Notebook Family Law 2006, December 7-8, 2006, New Orleans, Louisiana The Mysteries of Family Law: Ten Must Know Procedures, San Antonio Bar Association, Family Law Section Seminar, March 2, 2007, San Antonio, TX Attorneys Fees Ways and Means, The 30th Annual Marriage Dissolution Institute, May 10-11, 2007, El Paso, TX The Mysteries of Family Law: 10 Must Know Procedure & Evidence Tips, Corpus Christi Bar Association, 2007 Family Law Seminar, October 5, 2007, Corpus Christi, TX 2008 Trial Institute, Texas Academy of Family Law Specialists, January 18-19, 2008, Santa Fe, New Mexico Maximizing Results at Mediation, San Antonio Bar Association Family Law Section Seminar, February 29, 2008, San Antonio, TX 31st Annual Marriage Dissolution Institute, “Electronic Evidence Panel”, State Bar of Texas, April 17-18, 2008, Galveston, TX Co-Course Director, “Extreme Makeover”, San Antonio Bar Association Family Law Section Seminar, 2006, 2007, 2008 34TH Annual Advanced Family Law Course, Family Law Boot Camp, “Practice in the Trenches – Show Me the Money – Your Financial Relationship with Your Client”, August 10, 2008, San Antonio, TX 34th Annual Advanced Family Law Course, “Do I Look Like I’m Negotiating?”, Creative Mediation Techniques Panel, August 11, 2008, San Antonio, TX Moderator, The Divorce Lawyers and Civil District Judge Discuss Family Violence, San Antonio Bar Association Family Law Seminar, October 30, 2008,San Antonio, TX Co-Course Director, 2009 Trial Institute, Texas Academy of Family Law Specialists, Tampa, FL, January 16-17, 2009 Case Law Update, 2009 Parent-Child Relationships: Critical Thinking for Critical Issues, The University of Texas School of Law, January 29-30, 2009, Austin, TX Just When You Had It Figured Out – Case Law Update, 2009 Extreme Makeover, San Antonio Bar Association Family Law Section , February 27, 2009, San Antonio, TX Co-CLE Director, 2009 American Academy of

Matrimonial Lawyers – Mid-Year Meeting, March 17-21, 2009, Kauai, Hawaii How to Maintain Your Financial Relationship with Your Client, St. Mary’s Law School, April 13,2009, San Antonio, TX Disproportionate Divisions, 32nd Annual Marriage Dissolution Institute, State Bar of Texas, April 16-17, 2009, Ft. Worth, TX Your Financial Relationship With Your Client, Family Law Section, San Antonio Bar Association, April 21, 2009, San Antonio, TX Successful Billing Practices for Family Lawyers, 31st AAML Institute, Florida Chapter of AAML, April 30- May 2, 2009, Orlando, Florida Analyzing Your Property Case: A Prequel to Characterization, Valuation and Division of the Marital Estate, 35th Annual Advanced Family Law Course, August 5, 2009, Dallas, TX Help!! My Family Lawyer Stinks!!... Tips for Maintaining Good Client Relations and Protocols For Billing and Mediation Prep, 2009 Family Law Seminar, Corpus Christi Bar Association, October 2, 2009, Corpus Christi, TX “ADR Is NOT A 4-Letter Word!, Hot Tops for Successful Litigation Alternatives”, The University of Texas School of Law 2010 Parent-Child Relationships Seminar, Austin, Texas “Bizarre Facts & Creative Solutions”, 10th Annual Family Law on the Front Lines, July 1-2, 2010, San Antonio, Texas “More Money and Less Stress: Law Office Management and Technology”, State Bar of Texas 26th Annual Advanced Family Law Course, August 9-12, 2010, San Antonio, Texas “CPA’s & Lawyers – A Love Affair That Can Be Taxing”, San Antonio CPA Society, September 2, 2010, San Antonio, Texas LANGUAGES Spanish PERSONAL Married to Karen Maxham Hardy and the proud father of two children - my son Chase, a Senior and newly elected President of his High School Student Body and my daughter Paige, a Freshman voted mostly likely to lead a political party.

Attorney’s Fees (Getting Paid for What You Do) Chapter 3

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TABLE OF CONTENTS

I. INTRODUCTION .................................................................................................................2 II. COLLECTING FROM YOUR CLIENT – THE RULES OF BILLING..........................2 A. Efficient Billing Practice #1 – Hourly Rates, Fee Agreement & Billing Program ............ 3 B. Efficient Billing Practice #2 – Tracking Your Time ............................................................. 5 C. Efficient Billing Practice #3 – Flat Fee Billing ................................................................. 7 D. Efficient Billing Practice #4 – Assess & Educate Clients ..................................................... 7 E Efficient Billing Practice #5 – Receivables – Review, Review, Review! .............................. 9 F. Efficient Billing Practice #6 – Etiquette & Integrity .......................................................... 10 III. CONCLUSION ...................................................................................................................13 APPENDICES: A. Sample Fee Agreements ................................................................................................

(1) Higdon, Hardy & Zuflacht, L.L.P ...................................................................14 (2) Law Office of Sam Bashara .............................................................................21 (3) Law Office of Mark L. Medley ........................................................................23 (4) Vaught Law Firm, P.C. ....................................................................................29 (5) Koons Fuller, P.C. .............................................................................................46 (6) Jenkins & Kamin, LLP.....................................................................................50 (7) Ausley, Algert, Robertson & Flores, L.L.P.....................................................60

B. Client Phone list .........................................................................................................68 C. Survey .........................................................................................................................69 D. Checklist for Client Mediation Preparation Form .................................................72 E. Mediation Letter to Client ........................................................................................74 F. Letter to Client on Closing Documents on Website ................................................76 G. Closing Letter to Client with Bound Book ..............................................................77


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I. INTRODUCTION

Discussing billing and collection practices always seems to be taboo. We all enjoy talking about our cases and talking about the law but we seem to avoid the issue that is most important to our families – our ability to make money. The reason for this hesitance never ceases to amaze me. Law school did not offer what arguably is one of our most important topics- how to successfully bill our clients!

When I first became an attorney, I learned that it generally takes three things to be successful in the practice of law.

First, you obviously have to have a knowledge of the law.

Second, you have to have the ability to attract clients to your practice.

Third, and possibly the most important, you have to have a business sense of when to take, when not to take, and how to take a case (also known as the “business side” of your practice).

I do not know whether you are satisfied with your billing and collection practices.

I suggest that you consider a complete billing makeover of your practice. Take a hard look at every component of your “business side” and consider totally rewriting or changing those things that need to be revised to make you a more successful lawyer.

I have consulted with the Ethics Department of the Florida Bar Association and reviewed their ethics rulings. I cannot assure that this paper is in compliance with Florida’s Rules of Ethics. I would strongly suggest that you diligently review those rules before making any major changes to your practice.

The Concept of “Inventory”

More than once I have heard individuals comment that one of the benefits of practicing law is that we are selling our time and do not have the required “inventory” that many do in their businesses and, of course, the associated cost of maintaining that inventory.

At first blush, you may agree with their assessment. Remember, however, Abraham Lincoln’s famous quote that “a lawyer’s time and advice are his stock in trade”.

Unfortunately, as lawyers we do have “inventory” and our inventory is much more perishable than that of a florist or produce company.

Our “Inventory” is our TIME. It is

fleeting and very, very highly perishable. We have roughly forty hours per week as attorneys in “inventory” that we must either use or lose.

Keep in mind the importance of tracking

and accounting for your time.

Getting paid is a very important part of being an attorney. Often times, your legal representation will be more satisfying to your client if you can create a way for the other side to pay your attorney’s fees. However, ultimately you still have to be able to collect your fees from your client. II. COLLECTING FROM YOUR CLIENT - THE RULES OF BILLING Over the years, I have talked with many lawyers about their billing practices and amassed what I refer to as the “Rules of Billing”. These simple rules can help you increase your efficiency of billing and make your clients happier. When clients understand what they are paying for, they are more readily willing to pay our fees. If after reading these rules, you have suggestions to offer, please


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email them to me and the list will continue to grow. A. Efficient Billing Practice #1- Hourly Rates, Fee Agreements and Your Billing Program Rule No. 1 Assess (or Reassess) your hourly rate – When was the last time that you adjusted your rate? Take a hard look at your hourly rate and compare it to those practitioners with similar years of experience. Additionally, factor in the degree of your specialization in the area of family law in assessing your rate. Rule No. 2 Review your hourly rate annually – Many firms consider updating their hourly rates each December. A common practice is to increase fees $25.00 per hour per year.

This seems to keep up with inflation as well as with your increased amount of experience. This hourly rate change should not apply to existing clients (an ethics issue) but does apply to new client’s cases (or new cases of old clients).

Ethics Issue - Hourly Rate for Existing Clients When a fee being charged to an existing client is different from the agreed fee, the lawyer has the duty to advise the client of the change. Tex. Disciplinary R. Prof’l Conduct 1.04 cmt. 2. Rule No. 3 Revise your contract – Start from scratch. Throw out your old contract and look at the samples that are attached as exhibits to this paper and pick those sections of the contracts that best suit your needs. Rule No. 4 Consider an “evergreen clause” in your contract - Let your clients know that their failure to PROMPTLY maintain their positive balance in their retainer will force you to withdraw. A sample” evergreen clause” that you might consider is as follows:

Client understands and agrees that if the amount of Client's retainer should fall below fifty percent (50%) of its original amount at any time, Client agrees to pay an additional retainer within ten (10) days in an amount sufficient to replenish the initial retainer to fifty percent (50%) of its original amount. Any unused retainer in excess of the initial retainer or subsequent replenishment will be refunded to Client upon conclusion of Client's case. If Client fails to deposit the additional retainer, as requested herein, within ten (10) days after the billing, Attorneys may withdraw as Client's attorney, cease work, and will have no further responsibility to work on Client's case. Client's failure or inability to pay Attorneys' retainer fees and/or expenses as herein provided shall operate as a condition subsequent and may allow Attorneys to withdraw from Client's representation. Unless some other agreement in writing has been reached between Client and Attorneys, any balance due Attorneys at the conclusion of Client's case shall be payable prior to the final hearing in this matter.

Rule No. 5 Find a proper billing program – There are many billing programs that are available for you to track your time. “Time Slips” is very popular but there are many other ones out there that you may be using or that may otherwise suit your needs. (You might consider “ProDoc”, “PC Law”, “Tussman” and “Billing Tracker”.) I personally believe that it is absolutely essential that you learn enough about computers to enter your own time in the system in order to maximize your efficiency and capture all of your time (writing something down on paper and giving it to someone to input is not only an


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extremely inefficient act but also inherently causes a loss of time). Rule No. 6 Accept credit cards – Credit cards offer an easy method of payment for your clients. Retainers appear much more easily when clients are able to put the charge on their credit card. Clients like credit cards in every day spending – why should your attorney’s fees be dissimilar? Take advantage of credit card usage and allow clients to charge. A sample Authorization for Automatic Credit Card Billing form is attached to the Higdon, Hardy & Zuflacht sample Fee Agreement. Ethics Issue – Credit Cards When receiving payment through an approved credit plan an attorney may receive drafts for past or future services and expenses, but any money received for future services and expenses must be kept in a trust account along with an amount, from the attorney’s own funds, equal to the discount on the draft. Op. Tex. Ethics Comm’n No. 481 Rule No. 7 Consider email verifications to pay bills on credit cards – Why not send clients reminders by email with a note allowing them to authorize you to charge your bill on their credit card? It seems advisable when a client comes to your firm to retain a credit card number and expiration date on file as part of your contract to allow the client to authorize you to charge on their credit card. Rule No. 8 Automatic charges on a credit card – Insist, in conjunction with your evergreen clause, that new clients authorize automatic charge of fees accruing on their accounts to their credit card on a monthly basis. Simply stated, a bill goes out and we are authorized to charge that amount due on the client’s credit card. An option to consider! Rule No. 9 Referral Fees to Attorneys – I do not believe that it is a good idea to pay

referral fees on hourly cases. What I do for attorneys who refer me cases is to be sure to refer cases back to them. I would strongly urge that if an attorney refers you case you keep that lawyer on your list of people you “owe” a referral and refer them cases that you believe they are competent to handle. Ethics Issue - Referral Fees Rule 1.04 of the Texas Disciplinary Rules for Professional Conduct sets out the requirements for a division of fees between lawyers who are not in the same firm. The Rule requires that 1) the division is in proportion to the professional services performed by each lawyer or the division is made between lawyers who assume joint responsibility for the representation, 2) the client consents in writing to the terms of the fee arrangement, and 3) the fee is not unconscionable. Therefore, “a referring lawyer’s duties cannot end with the referral.”Op. Tex. Ethics Comm’n No. 568 (2006). Rule No. 10 Co-counseling cases – If you have a tough case that you should not stay in, consider retaining a more experienced attorney to assist you as your “co-counsel” in the case, especially if you have a good relationship with the client. Rule No. 11 Refer tough cases and expect referrals of cases in return – If you have a case that you know that you should not be a part of (and trust me, I have been there), consider referring it to an attorney who is best able to help your client. Do so early in your case and check your ego to make sure that you are not biting off more than you can handle. By the same token, you should certainly expect a referral of a case from the attorney you send the case to. Ethics Issue – Incompetence A lawyer shall not continue or begin representation of a case that the lawyer knows or should know he or she is incompetent to


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handle unless 1) a competent attorney is involved in the matter or 2) the representation is necessary because of an emergency. Tex. Disciplinary R. Prof’l Conduct 1.01(a). B. Establish Efficient Billing Practice #2 - Tracking Your Time Rule No. 12 Track your time (all of it) – Remember, your time is your “inventory” (or your stock in trade). Any amount of your time that is not tracked is lost, so track all of it and track it carefully. Rule No. 13 Bill for EVERYTHING – You should bill for every “iota” of work that you do for your clients. (Even if you decide to “no-charge” your time, your clients will appreciate you even more knowing ALL the work that you are doing on their files, especially if they know that you did not charge them for it). Treat your bill as the “diary” of your case. I regularly explain to clients that they will see everything that I do on their case and if I dream about their case, they will see it on their bill. A quick explanation to your client that short items (and dreams) will be “no charged” will put them at ease but help them to better understand the process. While we have to be worried about putting in too much detail (as a contract may fall in the hands of the opposing side), be sure to provide enough detail that your client understands what you have done on their case. Compare a time entry of “Telephone conference with client” with “Saturday telephone conference with client regarding Christmas visitation issues and problems with those issues”. Which entry better explains what you did for the client? Which entry offers the client a more complete understanding of what you have done for them? Which entry reminds the client that you worked on a weekend for them?

Rule No. 14 “No Charge” Billing – Remember to include in your billing even those items that you do not charge for. A quick phone call to a client, or opposing attorney, some quick action on their file, a short letter to the other attorney should be reflected with a “No Charge” billing entry. This not only reminds the client that you did the work but emphasizes and reminds them that they were not charged for the work done. Rule No. 15 Bill in quarter hour (.25) increments – Quarter hour incremental billing is the easiest type of billing that you can find. Clients understand the concept of “rounding up” or “rounding down” to quarter hour increments and there is not much work that you can do in a file that does not fit into this billing concept. If you do something that takes three to four minutes, I still suggest that you still “quarter” hour bill it but “no-charge” that time billing entry. Rule No. 16 Set your goal to bill a 40-hour week – We work a forty-hour plus week. We should aim to identify a forty-hour work product. Granted, this time may include “no-charge” hours but it still gives us a weekly goal. Check your billing progress throughout the week (or even the day) to ensure that you are capturing all of your time and trying to keep to your daily goals. Rule No. 17 Bill as a Malpractice Defense – Remember that your bill is your case “diary”. If there are problems in your case, your billing instrument can be used against you to reflect work you did or work you failed to do. I am familiar with a case involving an attorney (a good one) who was sued for malpractice with the allegation being that he had not properly prepared for trial. He had, of course, prepared for trial but his bill did not reflect a charge for the trial preparation. His client claimed (unsuccessfully) that the bill proved that the


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attorney had not spent time preparing the case for trial. Rule No. 18 Nonrefundable Retainers – Thank you for your non-refundable retainers. I cannot tell you how many clients come to me who were distraught over having interviewed with attorneys who charged non-refundable retainers. I explain to clients that a large part of the rationale behind the charging of “non-refundable retainers” has to do with the fact that it makes billing practices much easier. In reality, there are other options. Ethics Issue – Commingling Funds A nonrefundable retainer belongs to the attorney when it is received. Therefore, the nonrefundable retainer does not have to be placed in a trust account for the client. However, if the client uses one check to make a payment that includes the nonrefundable retainer and a refundable retainer, the entire payment, including the nonrefundable retainer, must be deposited in the trust account. After depositing the entire payment in the trust account, the lawyer may transfer to a general account the portion that constitutes the nonrefundable retainer. Tex. Comm. on Prof’l Ethics, Op. 391, 1978 WL 14284 (1978). Ethics Issue – Termination of Representation If the retainer is an advance payment for services, then the lawyer must abide by Rule 1.15. The Rule requires that when a lawyer terminates representation of a client, the lawyer must return advance payments of the fee that are unearned. Tex. Disciplinary R. Prof’l Conduct 1.15(d). Rule No. 19 Value bill – Consider “value billing” for your services. For example, when you charge for an original petition for divorce, consider billing a set amount for your time and planning on including your revisions and time spent on revisions and that original set amount of time.

Rule No. 20 Prepare your decree at the beginning of your case – It offers a “blue print” for your client as to where you are going to go with their case and offers the client an opportunity to start putting together the important account numbers and legal descriptions necessary to complete their decree. It is a good idea to ask your client about chances of reconciliation and for their permission to prepare the decree. Explain that it needs to be done anyway and you might as well get started as it will take time to fill in a lot of necessary information (VIN numbers, legal descriptions, etc.). Rule No. 21 Return all calls the same day or apologize the next day - This is a good, important client practice. Remember, you can steadily bill for your time on the phone and clients are extremely satisfied if you promptly return their phone calls. Ethics Issue – Most Rules of Professional Conduct do not say anything about timeliness in returning phone calls; however, every lawyer owes every case a duty of diligence. To their clients, that diligence is to be consistent with the client’s interests, so it is important to return calls promptly. The most common grievance against lawyers is a failure to keep the client adequately informed about the case, including not returning phone calls in a timely manner. Joal Cannon Sheridan, “What Would Atticus Do?”: Top Ten Ethical Mistakes Family Lawyers Make, in 7 State Bar of Texas, 34th Annual Marriage Dissolution Inst. (2011). Rule 1.03 states that a lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. Tex. Disciplinary R. Prof’l Conduct 1.03. Rule No. 22 Bill throughout the day as you conduct your work – It is much, much easier to type in a time slip as you are talking on the phone as opposed to trying to remember your work later on in the day. Get in the habit of


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creating a time slip while you are on the phone with a client or while you are doing the billable work. Rule No. 23 Have your legal assistants bill for their time - Outside of basic typing, a legal assistant should certainly bill for his/her time. They, too, can bill in quarter hour increments and should be billing for other than basic work. Examples of legal assistant billings can include: telephone conference with a client; preparation of response to discovery, cover letters to clients/opposing attorneys, inventory and appraisement, draft of final decree just to name a few. C. Efficient Billing Practice # 3 - Flat Fee Billing Flat fees are generally utilized by lawyers to do a set amount of work on a case, such as for real estate transaction work and for criminal law cases. Should we consider them for family law cases? At first glance, they are not appropriate as most of us have experienced the “easy case” creates an expectation by a client of a refund while the “more difficult case” creates an expectation by a client that you will stick to your flat fee. Consider certain transactional cases wherein flat fees may be appropriate. If you are brave enough to prepare Pre-Nuptial Agreements perhaps a flat fee would work for your situation. Consider the flat fee when quoting a fee for a pre-marital or a similar transactional service to clients. Ethics Issue – Flat Fee Billing The comments to Rule 1.04 indicate that common billing methods include flat fee arrangements. A flat fee arrangement is still subject to the standard of reasonableness; however, there are no inherent ethical issues

associated with this practice. Tex. Disciplinary R. Prof’l Conduct 1.04 cmt 3. Ethics Issue – Commingling Funds When lawyers charge flat fees, it is important that the employment contract is clear as to who will own the money after the client submits payment and whether the fee is refundable. All funds that are owned by the client and/or refundable should be placed in a 9-102 Trust Account. Tex.Comm. on Prof’l Ethics, Op. 391(1978). D. Efficient Billing Practice #4 – Assess and Educate Clients Rule No. 24 Read your contact “word for word” with your client - Ensure that they understand what is expected of them as part of the fee arrangement. Read each section to them and explain in your own words what the section means, especially as regards to the importance of their paying their fees on a monthly basis. Offer to let them take it home for review. Ethics Issue – The lawyer client relationship begins when the client reasonably believes that the lawyer has undertaken to provide legal services to the client. Rule No. 25 Initial Appointment Fees – There are pros and cons to initial appointment fees. The pros of fees is that you are charging for your time and avoiding be conflicted out of cases. The cons of initial appointment fees is that you might avoid seeing the client who might be shy of paying an initial appointment fee yet be willing to pay a substantial retainer if they hire you. I believe that some amount should be charged for an initial appointment fee, if not your full hourly fee. (At the very least, a nominal amount of $100.00 should be charged so that they feel that they are getting the value of your time.)


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I have received many comments from lawyers on initial consultation fees over the years. My personal experience with an initial office conference is that clients know that they “get what they pay for”. Clients who won’t or can’t afford an initial conference will not be able to afford you anyway. The payment of the first conference fee gets the client used to paying your fees and gives them an understanding that your time truly is your “stock and trade”. I am committed to charging for my initial conferences (with a rare exception perhaps of a good client referral, in which case I tell the client that they are getting a free consultation due to the person referring them). Rule No. 26 Determine a client’s ability to afford you - If a potential client cannot afford your fees, accept the fact that this potential client should become someone else’s client (and not yours). Rule No. 27 Set the tone early – Setting the tone with your client early in your case can make it easier for you to collect your fees during the case. Remind the client that you can “focus on their case or focus on your bill – what would they prefer?” Rule No. 28 Just Say “No” - Don’t fear allowing client to walk away from your office without hiring you. If they are meant to come back and hire you, they will do so. Otherwise, you will probably be much happier about their case if someone else is representing them. Rule No. 29 Do client a favor – refer! - If a client cannot afford you, help them out by finding them an attorney that they can afford. Maintain a referral network of competent lawyers who charge less than you do to whom you can refer those clients.

Rule No. 30 Treat Pro Bono as Pro Bono - Don’t have unrealistic expectations. If a client tells you that he/she can pay a total of $500 or $1,000, understand that you will probably be handling a great deal of their case on a “pro bono” (or free) basis. In such cases, do not be upset if a client does not pay your large receivable at the end of their case. Rule No. 31 Maintain a "time buffer" – One of the most important things that lawyers fail to do is to maintain a “time buffer”. If you take too many Pro Bono or “low fee cases”, you will not be available when a “good fee” case comes along. Don’t waste your “inventory” (your time) with non-paid cases when you should maintain that inventory for availability for higher paying cases. How often do we have clients who attempt to hire us who have no funds available to pay us? Deciding what to do is not only a difficult personal decision (we often want to help), but a business decision too (we want to pay our staff and bills). Considering the options in such a circumstance can be helpful: Option #1 – Refuse or refer the case. The easiest and perhaps best financial option for the attorney is to refuse or refer the case. Option #2 – Handle the case knowing you are probably handling it as a pro bono case and limit your expectations as to collecting a fee. The key to this type of representation is to have the understanding that you may, or probably, will not be paid. Working for free is not a bad thing, when done in moderation. But treating a pro bono as a pro bono is important. Don’t plan on suing the client who obviously does not have the money to pay you. Ethics Issue – In general, there is no duty for a lawyer to take any particular case.


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Rule No. 32 Maintain a client phone list – Keeping a client phone list will serve several purposes. First, it will offer you a readily available source for your client’s and opposing attorney’s phone numbers and other basic information. Second, it will give you an opportunity to have a master list to review on a regular basis. (I try to go through my phone list with my legal assistant weekly to make sure that we are on top of our cases.) Third, it will offer you a vehicle for review at the end of the day to ensure that you have properly billed for the cases that you have worked on during the day and would otherwise forget to bill on. (See Appendix “B” for a sample phone list.) Rule No. 33 Monthly billing - Send out bills to clients every month, no matter what, without fail. Avoid having clients receive a statement for 2 or 3 or more months of work at a time. Clients are entitled to ask you to “slow down” and your failure to send that statement on a regular basis does not afford them that opportunity. Rule No. 34 Pay only fees out of your retainer - Expert, accounting, psychological evaluation, and mediation fees should always be paid by the client separately from your retainer. Don’t confuse things. Tell your client that they need to bring a check for their portion of the mediation fee to the mediation. Alternatively, tell them that they need to advance the fee to your trust account prior to the mediation so that you can write the check. Note that my real reason for wanting an expert at, mediation, and other fees to be paid separately is my concern the clients will lump the fees paid through my trust account with their total attorneys fees bill. Different state laws provide differently as to privilege issues if these are paid by the attorney.

Ethics Issue – Separation of Funds Client property and funds must be kept separate from lawyer property and funds. More lawyers are sanctioned and disbarred for not getting this right and commingling funds than for any other ethical violation. Rule No. 35 Be Brave and Survey – Survey your clients. Surveying your clients by the inclusion of a survey with their bills and a self-addressed, stamped envelope can offer you the opportunity to learn how you and your staff are doing while offering your client an opportunity to vent as to any problems they are having with your services. You will be shocked and amazed at the positive feedback you will receive when you survey your clients and surprised at little things that bother your clients that, although easily correctable, you did not know existed. A sample survey is attached to this paper as Appendix “C” and is also available at our law firm’s secondary website at:

www.TexasFamilyLawInfo.com. E. Efficient Billing Practice #5 – Receivables - Review, Review, Review! Rule No. 36 Stay on top of receivables – Be sure to have your staff call your clients EVERY SINGLE MONTH (my admitted weakness) should they fail to make due payment on their bills. Enforce your “evergreen clause” in your contract and let clients know that they need to pay their fees. Rule No. 37 Have a staff member call about bills that are due - If you go to a doctor’s office and do not pay a bill, you receive a call from their staff reminding you to make a payment. Why should we be any different? Rule No. 38 Have a Pre-mediation meeting with clients – When you ask clients to pay the mediator, ask them to pay their retainer up to the “evergreen amount” prior to mediation. They won’t be surprised by this but, more likely, will expect to be asked to follow their contract. (If you are not sure what to discuss, other than


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fees, at pre-mediation meetings, feel free to follow the list provided as Appendix “E”). Rule No. 39 Schedule a “Closing Meeting” with client to review their closing packets and their bills - Sit down with your clients at the end of their case and present them with a copy of their closing documents and a copy of their bill. Mention prior to the meeting that you will be discussing the closing of their files and their final bills. (Think about asking that they bring their checkbooks.) They will not be shocked but will expect this meeting. (See Appendix “F”) Rule No. 40 Old Receivables, December Letter - A great new tip that I received from a lawyer is to generate a letter on December 1st for some of your “older receivables”. Offer to discount a client’s bill by 10% to 35% if they have paid their receivable by the end of the year. Rule No. 41 1099 Notice – **(Not Necessarily Recommended)** I understand that some attorneys are now sending IRS Form 1099’s to clients whose receivables they are writing off (or are threatening to do so). This is not a method that I use nor that I recommend, I simply report it as something that is being done. Please talk with your CPA before considering doing so. Rule No. 42 Client Good Will – Keep your client happy during their case. Let them know that you are thinking about them and their case while their case is pending. If a client mentions that they have an interest in wine and you come across an article on fine wines, send it to the client with a short note. Birthdays offer another opportunity to for you to diary their birthday and send a quick letter wishing them well. A happy client will always be quicker to pay their bill on a timely basis.

Rule No. 43 The Every Month Discount - Another legal policy being used by some attorneys (again not necessarily recommended) is to offer clients a 20% discount every month provided the client’s bill is paid by the end of the month. Lawyers report high collection rates (and low receivables). F. Efficient Billing Practice #6 – Etiquette and Integrity Rule No. 44 Be appropriate – Clients are generally impressed with what you say as well as things you do. When you meet a client’s spouse and lawyer for the first time, introduce yourself. Be professional. Do not disparage your opposing counsel. Far from disparagement, you have every reason to compliment the opposing attorney and their skills. Remember that your client will be more impressed with your professionalism and ability and, accordingly, more willing to pay your fees if they are impressed with you. (Note the alternative comment from your client that “anyone could have done what you did – even you acknowledged early in the case that this lawyer was not good”.) Rule No. 45 Maintain your Integrity – We can reflect on the importance of maintaining your integrity as to the importance of your reputation among fellow members of the Bar and Judges. But remember just how important it is as to clients. Clients do not need a reason to dislike attorneys. For many, your representation will be the first exposure that clients have had to an attorney. Not only should you be careful not to disparage our profession, but remember that clients who lose respect for you will justify not paying your bill. Do not allow clients to lie or misstate the truth. Be honest and compel your clients to be honest. Maintaining your integrity makes more than ethical sense, it makes business sense!


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**Bonus Tips from Guru James T. McLaren

on Setting and Collecting Fees**

1. “I would rather not do the work and not get paid than do the work and not get paid (and defend a grievance).”

2. Remember the “Gratitude Curve”. Collect your fees before or at the time the case is concluded.

3. Cash is king and the gold should always flow through your hands. 4. You have no one to blame but yourself if you have let a client go way ahead of you on your fees. 5. Do not apologize for the amount of your fees – the client came to you because they believe you are the best in the business – do not give the client a reason to doubt their judgment. 6. Do not negotiate with the client over your retainer or the hourly rates. 7. Buy lunch. (Clients resent your working through lunch and allowing the lunch bill to find its way to their bill.) 8. Call your clients with good and bad news. 9. Consider, for certain cases, the “Bonus” clause. 10. Remember the Curve!

a. Day client is served; b. Client meets with divorce attorney; c. Next meeting; d. Deposition; e. Negotiations; f. Settlement Conference; g. Settlement Meeting; h. Trial; i. After Trial; j. Decree;

k. Later; l. One Month Later; m. Two Months Later; n. Three Months Later; o. Four Months Later; and p. Five Months Later

Rule No. 46 Take the 7 steps to

Success! -

Start with a 7 step process to proper billing practices:

Step #1 – Consider rewriting your Fee agreement. Step # 2 – Analyze your computers and consider an upgrade. Step # 3 – Buy a good billing program. Step # 4 – Use the program hourly and keep it open on your desktop. Step # 5 – Get in the habit of reviewing your time and billing totals daily. Step # 6 – Set a procedure for sending your bills monthly. Step # 7 – Review your receivables monthly and remind your clients to pay you.

**Additional Bonus/Billing/Marketing/Client Care Ideas** 1. “My lawyer can beat up your lawyer” is not a marketing strategy. “My lawyer will call me back before yours will” is. 2. The value of a free consultation is what you charge for it. 3. Noting is free that costs your time. 4. If your clients stop paying you, don’t ignore them. Fire them.


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5. Your client will always know their business better than you do. Make sure you seek their advice before giving yours. 6. Being good at understanding makes you a good lawyer. Being good at arguing makes you an ass. 7. There are 1440 minutes in each day. How many did you make matter? How many did you bill for? Were they the same minutes? 8. Ask clients, “If I could solve just one problem for you, what would it be?” 9. The confused mind always says no. 10. Your “Keep great clients happy” budget should exceed your “try to find new clients” budget by at least three to one. 11. You can’t sell bad service to the same client twice. 12. If you don’t agree on fees at the beginning of a case, you’ll be arguing about them at the end of it. 13. How would your 10 best clients design your firm? Why haven’t you asked them? 14. If you keep 99 out of 100 clients happy, your batting average is .990. To the client you let down, however, your batting zero. 15. If there are three or more things that don’t seem quite right when interviewing a prospective client, take a pass! 16. Innovation begins with conversation. Engage with your clients so they’ll engage you. 17. The single piece of “technology” all lawyers should use to learn better is their keyboard. 18. Firing bad clients doesn’t put them out of their misery, but it puts them out of yours. 19. What’s the last thing you’ve done to improve your customers’ experience with you? 20. The more you resemble your competition, the less likely their customers will become yours. 21. Never forget that the least important file on your desk is, to at least one client, the most important file on your desk. 22. Resist the urge to say yes to everything. Say no to something each day, just to stay in practice. 23. It is unimportant how great you are at what you do if you don’t send your bills on time.

24. You can’t expect someone to appreciate your expertise if you fail to acknowledge theirs. 25. The one “technology” your clients really wish you’d get better at using is the telephone. Call them back! 26. Your clients don’t pay you to feel sorry for them, they pay you so they’ll no longer have to feel sorry for themselves. 27. Making a healthy profit from satisfied customers is the purpose of your business, not something to apologize for. 28. McDonald’s had made billions asking customers, “Would you like fries with that?” What’s your “French fry” question? 29. A client’s definition of a “great lawyer” is probably far different from yours. Understand their expectations, and then exceed them. 30. Your clients don’t think you aren’t calling because everything is fine, they think you’re not calling because everything isn’t. 31. When meeting a potential client, don’t sell your competence, sell your compassion. You must care about them before they’ll care about you. 32. Clip a picture of your kids to the top of your stack of bills so you remember why you do what you do (and charge for it). 33. If your clients can go months without hearing from you, they can go longer without recommending you. 34. Thinking like a lawyer doesn’t pay the bills. Thinking like a business person does. 35. Just because you’re not paying your clients for their time, don’t believe it isn’t as valuable as yours. 36. Never network to meet people, network to help people. 37. When you meet a client for the first time, make certain they don’t hear you complain. About anything. 38. People don’t tell lawyer jokes because they think they’re funny, they tell them because they think they’re true. Prove them wrong. Rule No. 47 Play more Golf! – What this rule means is to withdraw from a case or do not take a case for which you will not be paid your fair hourly wage. If you have the option of


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involuntarily working for free or going out and doing something fun, you should take advantage of the free time and do something that you enjoy (something that I am finally learning to do). III. CONCLUSION Working hard as a lawyer is not enough to be successful in the practice of law. The “business side” of our practice must be considered in order to have a successful practice. These policies that I have learned from attorneys have helped me maintain good billing practices. I hope these ideas will help you in your practice.

Good luck and good billing!


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APPENDIX “A”

SAMPLE FEE AGREEMENTS

FAMILY LAW RETAINER EMPLOYMENT CONTRACT "Client", whose name is subscribed at the end of this contract hereby employs HIGDON, HARDY & ZUFLACHT, L.L.P. ("Attorneys") of San Antonio, Texas to represent me in a family law matter and/or suit of the following referenced matter: _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ For said Attorneys’ services, Client agrees to pay an initial retainer fee as hereinafter set forth with the total fees for Attorneys’ services calculated by time expended by Attorneys at the following rates:

RETAINER ATTORNEYS AMOUNT James N. Higdon $10,000.00 Charles E. Hardy $ 7,500.00 Harold C. Zuflacht $ 6,000.00 Amy A. Geistweidt $ 5,000.00 David T. Emory $ 4,500.00 Stephanie J. Bandoske $ 3,500.00

CLIENT UNDERSTANDS THAT LEGAL REPRESENTATION WILL NOT COMMENCE UNTIL THE RETAINER FEE IS PAID IN FULL AND THIS CONTRACT HAS BEEN SIGNED BY THE CLIENT AND THE ATTORNEY. It is further agreed that for the services to be rendered by Attorneys, the fees for said services shall be determined as follows:

OUT OF COURT NON-JURY COURT ATTORNEYS TIME APPEARANCE/TRIAL JURY TRIALJames N. Higdon $425.00 per hr. $3,400.00 per day $5,100.00 per day Charles E. Hardy $400.00 per hr. $3,200.00 per day $4,800.00 per day Harold C. Zuflacht $350.00 per hr. $2,800.00 per day $4,200.00 per day Amy A. Geistweidt $300.00 per hr. $2,400.00 per day $3,600.00 per day David T. Emory $250.00 per hr. $2,000.00 per day $3,000.00 per day Stephanie J. Bandoske SUPPORT STAFF

$200.00 per hr. $1,600.00 per day $2,400.00 per day

Sr. Paralegal Time $125.00 per hr. $1,000.00 per day $1,500.00 per day Paralegal Time $100.00 per hr. $800.00 per day $1,200.00 per day Non-Legal Staff $45.00 per hr. $45.00 per hr. $45.00 per hr. Client understands that all time spent on Client’s case is recorded and billed. Some, but not all, of Attorneys’ services for which charges are made include legal research, drafting of pleadings and documents, office conferences, out-of-office conferences, telephone conferences, investigative work, review of material received from Client, the opposing party and others, preparation for and appearances in court, and other tasks necessary to handle the matter in controversy.


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If the time spent in Court is less than one-half day, the charge will be for one-half day; if the time spent in Court is more than one-half day, the charge will be for a full day. Out of court time will be calculated in increments of one-quarter (.25) hours. THAT IS, THE MINIMUM INCREMENT OF TIME TO BE CHARGED IS FIFTEEN MINUTES. For example, if a telephone call in regard to Client’s matter should be made, Client would be charged fifteen minutes of time (.25 hours) even though the actual telephone call may take less than fifteen minutes. Similarly, if that telephone call took more than fifteen minutes, but less than thirty minutes, Client would be charged an additional one-quarter (.25) hour of time. Attorneys cannot estimate the total amount of the time attorneys incur in your representation and the expenses which will accrue since the opposing party and his/her attorney(s), as well as other factors, often control this aspect of Attorneys’ representation of you since they and their counsel can require action(s) to which Attorneys must respond in order to properly represent you. Reimbursement of Expenses Advanced: Client agrees to reimburse Attorneys for expenses incurred on Client’s behalf. Expenses charged by Attorneys in addition to Attorneys’ hourly fees include photocopying, long distance telephone calls, facsimile transmissions and receptions, postage, parking fees, mileage, delivery and other similar charges, as well as filing fees, deposition charges, costs for the services and/or testimony of expert witnesses (such as psychologists, social workers, accountants and appraisers), and investigator expenses. Attorneys agree not to obligate Client for any large expense without Client’s prior approval. However, with respect to potentially large expenses, such as the cost of depositions and expert, consultant or other professional fees incurred on Client’s behalf, these expenses will either be deducted from the money on deposit in Client’s retainer account or will be paid directly by Client immediately upon receipt of the provider’s statement for these services if the retainer account balance is insufficient for the payment of such costs. Mediation Fees: In the event the matter is mediated, Attorneys will require Client to pay the mediator’s fees to Attorney’s in advance of the mediation. This payment of the mediator’s fees is in addition to the expenses paid by Attorneys out of the retainer referenced in the preceding paragraph. Client, upon prior arrangement with Attorney’s, may pay the mediator’s fees directly to the mediator prior to the commencement of the mediation. However, the mediator’s fees are required to be paid by the mediator before the mediation commences. Replenishment of Retainer: Client understands and agrees that if the amount of Client’s retainer should fall below fifty percent (50%) of its original amount at any time, Client agrees to pay an additional retainer within seven (7) days of notice of the reduced retainer in an amount sufficient to replenish the initial retainer to fifty percent (50%) of its original amount. In this regard, Client should understand that Attorneys will require that Client’s retainer with Attorneys must be sufficiently “replenished” in accordance with this paragraph prior to mediation, as well as, in the event of an unsuccessful mediation, not less than two weeks prior to the trial of Client’s matter. Any unused retainer or unused subsequent replenishment will be refunded to Client upon conclusion of Client’s case. If Client fails to deposit the additional retainer within seven (7) days as required by the preceding paragraph, Attorneys may withdraw as Client’s attorney, and/or cease work, and/or will have no further responsibility to work on Client’s case. (Client may elect to pay Client’s bill when received by PayPal or credit card by signing the credit card provisions contained at the end of this contract.) Client’s failure or inability to pay Attorneys’ retainer fees and/or expenses as herein provided shall operate as a condition subsequent and may allow Attorneys to withdraw from Client’s representation. Unless some other agreement has been reached between Client and Attorneys, any balance due Attorneys at the conclusion of Client’s case shall be payable prior to the final hearing in this matter. Attorneys will send Client a statement each month in which Attorneys have incurred expenses or performed services on behalf of Client. Questions arising from Attorneys’ monthly statement must be brought to Attorneys’ attention within twenty (20) days of Client’s receipt of Attorneys’ statement. It is understood that all sums due and payable pursuant to this agreement shall be payable by Client to Attorneys at their offices in San Antonio, Bexar County, Texas, which will include all charges for professional services rendered, together with all


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costs of court and expenses reasonably and necessarily incurred in Attorneys’ representation of Client. Client understands that Client must pay Attorneys’ fees whether or not Attorneys are able to resolve Client’s problem to Client’s satisfaction. Client realizes that Client is primarily responsible for the payment of the attorney’s fees and expenses. In the event the Court should award attorney’s fees, the amount awarded by the Court does not limit the amount Client owes and/or may still owe Attorneys. Further, in the event the Court awards a judgment for attorney’s fees, the difference between the amount of the judgment awarded and actually received/collected as a result of that judgment and the amount of the attorney’s fees incurred by and owed to Attorneys by Client shall be paid by Client to Attorneys. In the event Client has already paid Attorneys all of the attorney’s fees owed to Attorneys, any monies Attorneys should receive as a result of a judgment for attorney’s fees against the opposing party shall be paid to Client. The scope of this Employment Contract and the attorney’s fees involved herein does not cover the collection of any judgment for attorney’s fees awarded by the Court against the opposing party. Client realizes that Client will have to make additional arrangements for the payment of attorney’s fees for the collection of a money judgment against the opposing party. Client further realizes that, in the event Client paid Attorneys in full, Attorneys will assign to Client any judgment for attorney’s fees awarded by the Court to them.

Client understands that Attorneys will not give any advice on the value of any property. If the client does not know the value of an asset client should seek an appraisal. Client understands that Attorneys will not give any financial advice of any type or nature. Client understand and agrees that any discussion of property values and/or financial matters as they may relate to Client’s case are for discussion of the presentation of Client’s case and are not intended to be relied upon by Client other than in the context of Attorneys representation of Client and for no other purpose. In further consideration of Attorneys’ agreement to represent Client in the referenced legal matter, Client has agreed to and does hereby assign to Attorneys a lien against any and all sums of money coming into Client’s and/or Attorneys’ hands to which Client is or may become entitled related to and/or arising out of Attorneys’ representation of Client in the matter made the subject of this employment agreement, but then only to the extent of all unpaid Attorneys’ fees and expenses hereby contracted by Client. By signing this agreement, Client additionally hereby appoints Attorneys as Client’s attorney-in-fact with the specific power to negotiate, cash and/or give receipt for any amounts paid to Client related to and/or arising out of Attorneys’ representation of Client in the matter made the subject of this employment agreement. Any money owed to Attorneys by Client shall first be deducted from any money payable to Client as a result of the legal action for which legal services have been rendered by Attorneys. Client understands that interest at a rate which will not exceed one and a half percent (1 1/2%) per month will automatically be charged on any and all previous balances due in excess of thirty days from the date of billing, which Client agrees to pay. Any interest charged, however, shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law; any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. Upon any acceleration or required or permitted prepayment, if applicable, any such excess interest shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides other provisions in this and all other instruments concerning the interest on any such unpaid balance. Upon completion of services, Client agrees that all sums due and owing for legal fees and expenses will be paid in full. In the event such sums are not paid in full, upon the request of Attorneys, Client agrees to sign a promissory note with Attorneys for all additional amounts owing. The promissory note shall be in the standard form of promissory note prepared and issued by the State Bar of Texas, shall provide for interest at a rate not to exceed eighteen percent (18%) per annum on all amounts owing and not paid under the note, and shall provide for a monthly payment schedule which shall cause the amount then owed Attorneys by Client to be paid in full no later than two (2) years of the date of the last bill sent by Attorneys to Client unless written approval of other arrangement is made with Attorneys. Other than to provide reasonable and necessary legal services to the best of Attorneys’ ability,


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Attorneys make no representations, promises, or guarantees as to the outcome of the case for which Client has retained Attorneys, including whether costs or expenses incurred by Client will be reimbursed by the adverse party. Further, attorneys have made no estimate as to the total fee for Client’s legal services. ATTORNEYS DO NOT PROVIDE TAX ADVICE - Client acknowledges that Client has been advised by Attorneys that there may be certain tax consequences pertaining to any divorce decree and/or other order and/or settlement agreement reached that disposes of the matter in controversy; that Attorneys have not and will not furnish tax advice to Client regarding any matter for which Attorneys are retained by Client; and that Client has been directed and advised to obtain independent tax counsel prior to signing any divorce decree and/or other order and/or settlement agreement that may hereafter be prepared in finalizing some or all of Client’s claims made the subject of this Employment Agreement. PERSONAL INJURY CLAIMS EXCLUDED - Client agrees and understands that Attorneys have not been retained to represent Client with respect to any claim of personal injury that Client may have as a result of any event(s) arising out of the family law matter made the subject of this contract. Client therefore agrees and understands that a separate employment contract must be signed by Client and Attorneys before Attorneys will represent Client with respect to any potential personal injury claim, whether or not it emanates from the family law matter made the subject of this Employment Agreement. CHILD CUSTODY MATTERS EXCLUDED - Client agrees and understands that Attorneys have not been retained to represent Client regarding any issues concerning child custody matters. Client further agrees and understands that Attorneys representation of Client in this matter, unless separately employed to handle such custody matters, shall terminate hould any custody matters arise. Client therefore agrees and understands that a separate employment contract must be signed by Client and Attorneys before Attorneys will represent Client with respect to any such custody matter. APPEALS EXCLUDED - Client agrees and understands that Attorneys have not been retained to represent Client in the appeal of any judgment which may be signed as a result of Attorneys’ representation of Client made the subject of this contract. Client further agrees and understands that Attorneys representation of Client in this matter, unless separately employed to handle the appeal of any such judgment, shall terminate following the entry of a judgment by the trial court and all wrap-up documents have been prepared. The preparation of a motion for new trial, if Client determines same to be necessary to preserve Client’s appellate rights, is not included in this contract. Client therefore agrees and understands that a separate employment agreement must be signed by Client and Attorneys before Attorneys will represent Client with respect to any such appeal. COPIES OF CLIENT’S FILE CLIENT’S EXPENSE – In the event that Client discharges Attorneys and “requests their file” from Attorneys, any cost to provide Client with a copy of the file that has been created and/or maintained by Attorneys during the course of Attorneys’ representation of Client and/or the file materials created by Attorneys and/or coming into the possession of Attorneys during the normal course and scope of Attorneys’ representation of Client in this matter (“Client file”) shall be the sole cost of Client. Notwithstanding the foregoing, the cost of copying any original documents/exhibits provided to Attorneys by Client shall be that of Attorneys if Attorneys want to retain a copy of said original documents. All such original documents of Client shall be returned to Client upon Client’s request and/or as part of the delivery to Client of Attorneys’ “Client file.” Attorneys shall retain the right to require Client, upon Attorneys’ receipt of a request for a copy of Client’s file, to deliver the original of Attorney’s “Client file” to a copy service designated by Client, which copy service shall, at Client’s sole cost and expense, copy Attorney’s “Client file” and return the original of such file to Attorneys, while delivering the copy to Client. WAIVER OF JURY DEMAND - Should any dispute arise regarding the terms or conditions of this Employment Agreement, including but not limited to the services rendered (including but not limited to any claims by Client against Attorneys for professional negligence, breach of fiduciary duty and/or legal malpractice), or the fees, costs, or expenses payable hereunder, all parties hereby agree that the matter shall be decided, nonjury, by a District Court of Bexar County, Texas. In this regard, Client and Attorneys each understand and agree that, by signing this agreement, each is waiving their right to have any such dispute decided by jury and will submit the matter to the decision of a judge alone, that is, without the additional advice of a jury. Thus, in signing this Employment Agreement, Client acknowledges that, as to a dispute arising from and/or related to the terms or conditions of this


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Employment Agreement, which specifically includes potential future claims addressed in this waiver of jury demand clause, (1) each party, including Client, is expressly waiving the right to a trial by jury on these matters; and, (2) before signing this Employment Agreement and thereby agreeing to be bound by the provisions of this clause, Client has the right to obtain legal advice from independent counsel if the provisions and ramifications of this clause are not fully understood, but has, with full understanding of this clause and its provisions, nevertheless agrees to its inclusion in this Employment Agreement and agrees to be bound thereby. The provisions of this clause are not in any way intended to prospectively limit Attorneys potential liability to Client, if any, but are only intended to specify the forum and/or manner in which redress of any such claims will be resolved. BINDING ARBITRATION CLAUSE – In the event that the parties, in lieu of the nonjury trial specified in the preceding paragraph, desire to resolve any dispute regarding the terms or conditions of this Employment Agreement and should mutually agree that the dispute should be referred to binding arbitration in lieu of the litigation associated with a non-jury trial, then, in that event, the parties hereby agree that the arbitrator will be appointed by the then Presiding District Judge of Bexar County, Texas. In the event of any such arbitration, the provisions of Chapter 171 of the Texas Civil Practice and Remedies Code shall govern any such arbitraton proceedings to the extent the parties cannot otherwise agree. Client acknowledges that subject to the foregoing “Waiver of Jury Demand” provision, as to a dispute arising from and/or related to the terms or conditions of this Employment Agreement, which specifically includes potential future claims addressed in this binding arbitration clause, is agreeing to be bound by the provisions of this Binding Arbitration Clause. Client understands that Client has the right to obtain legal advice from independent counsel if the provisions and ramifications of this clause are not fully understood. Client, with full understanding of this Binding Arbitration Clause and its provisions, nevertheless agrees to its inclusion in this Employment Agreement and agrees to be bound thereby. The provisions of this clause are not in any way intended to prospectively limit Attorneys’ potential liability to Client, if any, but are only intended to specify the forum and/or manner in which redress of any such claims will be resolved. GENERAL - Attorneys will keep Client informed of the progress of Client’s case. Attorneys will endeavor send Client copies of all papers related to Client’s case coming into and going out of Attorneys’ office, including correspondence, pleadings and other documents (save and except, perhaps, copies of emails). If the assigned attorney and/or their paralegal is available when Client telephones, Attorneys will endeavor to have Client’s call returned as soon as possible by another member of Attorneys’ staff. All of Client’s communications with Attorneys are confidential. Confidentiality of Client’s communications with Attorneys also applies to all employees of Attorneys. Communications between Attorneys and Client about Client’s case are privileged. Candor and truth are important in the pursuit of the Client’s objectives. Only if Attorneys know all of the facts can Attorneys perform the services for which Client has hired Attorneys. However, some communications are not protected. Texas Family Code §261.101 compels any professional (including Client’s attorney) to reveal information regarding child abuse if the professional, i.e., Attorneys, have cause to believe that a child has been abused or neglected or may be abused or neglected or that a child is the victim of an offense under Texas Penal Code §21.11. Attorneys will make every effort to expedite Client’s case promptly and efficiently according to the legal and ethical standards promulgated by the Supreme Court of Texas. Attorneys are bound by professional rules of conduct which require Attorneys to serve Client and the court honestly and faithfully. If Client insists that Attorneys break any of the disciplinary rules under which Attorneys practice law, insists upon presenting a claim or defense not warranted under existing law and which cannot be supported by a good faith argument for extension or reversal of such law, personally seeks to pursue an illegal course of conduct, insists that Attorneys take an action which is dishonest, insists upon the use of a witness who will not tell the truth, or by other conduct renders it unreasonably difficult for Attorneys to carry out Attorneys’ representation of Client, Attorneys must withdraw from representing Client. The State Bar Act requires that Texas attorneys give notice to their clients that the State Bar of Texas investigates and prosecutes professional misconduct committed by Texas attorneys. Although not every complaint against or dispute with a lawyer involves professional misconduct, the State Bar’s Office of General Counsel will provide information about how to file a complaint by calling 1-800-932-1900 toll free. By inserting an email address in the following blank Client expressly authorizes and directs Attorneys to


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send Client’s bills to Client at this e-mail address: _______________________________________________. THE UNDERSIGNED HAS FULLY AND COMPLETELY READ THE FOREGOING CONTRACTUAL AGREEMENT, HAS ABSOLUTELY NO QUESTIONS WHATSOEVER CONCERNING ANY OF ITS PROVISIONS AND FULLY UNDERSTANDS AND AGREES TO EACH AND EVERY TERM AND PROVISION STATED THEREIN. AGREED TO AND SIGNED this _____ day of _____________________ 2011.

HIGDON, HARDY & ZUFLACHT, L.L.P. CLIENT’S PRINTED NAME: __________________________ 12000 Huebner Rd., Suite 200 SIGNATURE:_______________________________________ San Antonio, Texas 78230-1210 ADDRESS: _________________________________________ Telephone: (210) 349-9933 CITY/ZIP: _________________________________________ Telecopier: (210) 349-9988 HOME PHONE: (______) _______________________ E-Mail: OFF. PHONE: (______) _______________________ CELL PHONE: (______) _______________________

SSN: __________________________________ BY:__________________________________________

DLN: TX __________________ DOB: ________________ Email: _____________________________________________ EMERGENCY CONTACT NAME AND PHONE #: __________________________________________________

GUARANTY AGREEMENT For valuable consideration, being Attorneys agreement to represent Client at my/our request, I/We hereby guarantee the payment of all expenses and fees incurred and/or professional services rendered by Attorneys for Client pursuant to this Employment Contract. AGREED TO AND SIGNED this _____ day of _________________2011.

GUARANTOR’S NAME: GUARANTOR’S ADDRESS: PRINTED: ___________________________________ ______________________________________________ SIGNATURE: _________________________________ ______________________________________________ SSN: ________________________________________ ______________________________________________ DLN: ________________________________________ ______________________________________________

SIGNATURE:_________________________________ DATE: ______________________________________


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Higdon, Hardy & Zuflacht, LLP

CREDIT CARD PAYMENT AGREEMENT

__________ If Initialed, I hereby authorize my outstanding monthly bill to be paid in full (including

replenishments) by the following credit card account on the 10th of every month unless I instruct attorney

otherwise in writing, which includes email or facsimile transmissions.

__________If initialed, I hereby authorize the following charge $_________to be paid by the following credit

card account on the following date _______/___/_2011.

Please complete the necessary information below: ______________________________________________________________________________ Client Full Name Phone Number CREDIT CARD NUMBER: _________-_________-__________-__________ __________/_____ ____ Card Expiration CSC Code NAME AS IT APPEARS ON CARD: __________________________________________________________

Print Name

BILLING ADDRESS: ______________________________________________________________________ Street ______________________________ ________ _______ City State Zip ______________________________ Email address _________________________ _________________ CARDHOLDER Signature Date SPECIAL INSTRUCTIONS: PHONE IN PAYMENTS MUST BE FOLLOWED UP WITH

EMAIL AUTHORIZATION FROM CARD HOLDER, IN LIEU OF SIGNATURE. (No

exceptions)


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Exhibit 2

FEE AGREEMENT FURNISHED BY LAW OFFICE OF SAM BASHARA

[Date]

VIA FIRST CLASS MAIL [Name] [Address] [City, State, Zip Code]

Re: [Matter]

Dear [Name]:

Please let this letter serve to outline the terms of our attorney-client relationship with respect to the above-referenced matter. l. We agree to represent you in connection with [state matter, i.e., divorce action,

modification proceeding, etc.]. My hourly rate will be $450.00 an hour. In addition thereto, you agree to pay all costs and expenses associated with our representation, including, but not limited to, court costs, expert witness and court reporter fees, along with travel, telephone, copying and fax expenses.

To the extent Julian Schwartz does work on the case, he will be compensated at a rate of $225.00 an hour.

To the extent a secretary performs paralegal services, such as providing assistance to you in connection with responding to written discovery, organization of the discovery, and/or indexing of depositions, such secretary's time will be billed at $60.00 an hour.

2. In the event that fees, costs and expenses are not timely paid in accordance with

this agreement, I may withdraw from my representation of you, pay any outstanding bills, including my own, and refund the retainer balance, if any, to you.

3. You will pay to me an initial retainer of $__________. The retainer will be held

by me in my trust account to protect the fee. You will receive a monthly bill which you will be expected to pay by the I0'" of the month with non-retainer funds. In the event my monthly fee statements are not timely paid, I may use any


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portion of the retainer to pay the monthly bill. The retainer will eventually be credited against the amount due and owing when the representation is concluded. Any amount not used will be returned to you.

4. No warranties or representations, either express or implied, are made by me.

5. You have the right to discharge me at any time, but will be responsible for the fees, costs and expenses incurred through the date of discharge.

6. ARBITRATION. ANY DISPUTE ARISING BETWEEN US WHICH RELATES

IN ANY MANNER TO THIS AGREEMENT OR THE REPRESENTATION OF CLIENT BY BASHARA, INCLUDING, BUT NOT LIMITED TO, ANY FEE DISPUTE, MALPRACTICE CLAIM, DTPA CLAIM, FRAUD CLAIM, BREACH OF FIDUCIARY DUTY CLAIM OR ANY OTHER CLAIM, WHETHER MENTIONED OR NOT, SHALL BE SUBMITTED TO BINDING ARBITRATION ON THE REQUEST OF EITHER PARTY BY SUBMISSION OF THE DISPUTE TO A JUDGE OR FORMER JUDGE APPOINTED BY JUDICIAL ARBITRATION & MEDIATION SERVICES, INC. (JAMS). EACH PARTY WILL HAVE ONE PEREMPTORY CHALLENGE TO THE JUDGE OR FORMER JUDGE ASSIGNED TO ARBITRATE THE CASE BY JAMS. ARBITRATION WILL BE BINDING AND IN ACCORDANCE WITH THE RULES, REGULATIONS AND PROCEDURES OF JAMS. IN THE EVENT THAT JAMS CEASES TO EXIST, OR IS UNWILLING OR UNABLE TO APPOINT A JUDGE OR FORMER JUDGE TO ARBITRATE THE DISPUTE, THEN AN ARBITRATOR SHALL BE APPOINTED BY A DISTRICT COURT OF BEXAR COUNTY, TEXAS. EACH PARTY SHALL HAVE ONE PEREMPTORY CHALLENGE TO THE ASSIGNED ARBITER. EACH PARTY SHALL BE RESPONSIBLE FOR PAYING ONE-HALF (1/2) OF THE ARBITRATION COSTS. NOTWITHSTANDING THE PROCEDURE OUTLINED ABOVE, THE PARTIES, BY WRITTEN AGREEMENT, MAY SELECT THEIR OWN ARBITER TO RESOLVE ANY DISPUTE. ARBITRATION SHALL BE BINDING ON THE PARTIES. EACH PARTY TO THIS AGREEMENT EXPRESSLY WAIVES THE RIGHT TO AN ATTORNEY IN CONNECTION WITH THE EXECUTION OF THIS AGREEMENT.

Very truly yours, SAM C. BASHARA

SCB:mel AGREED to this the ____ day of ______________, 2011 ___________________________________ CLIENT’S NAME


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Exhibit 3

FEE AGREEMENT FURNISHED BY LAW OFFICE OF MARK L. MEDLEY

CONTRACT AND AGREEMENT The undersigned, hereinafter sometimes referred to as "Client" and the undersigned, LAW

OFFICE OF MARK L. MEDLEY, P. C., sometimes hereinafter referred to as "Attorney", hereby

enter into the following Contract and Agreement regarding Attorney's representation of Client in

the following matters:

CONTESTED CONSERATORSHIP AND DIVORCE

Client understands the following conditions regarding employment of Attorney in this case: 1. The date of actual employment of Attorney is __________________, 2011; 2. No representations have been made by an Attorney as to the ultimate success of the case and the only material representations made by Attorney to Client are that Attorney will exert his best professional efforts in his representations of Client. There have been no guarantees made by the Attorney that there will be a recovery of fees, costs or expenses incurred by Client in this cause of action; 3. Client fully understands that in the event sums are recovered and actually received from the opposing party, they shall first be credited to unpaid fees, costs or expenses with any remaining fees paid to Client; 4. Client fully understands that this instrument represents a contract for services rendered and to be rendered by Attorney and that such services are conditioned upon the terms of this agreement, including but not limited to payment of attorney fees to Attorney in accordance with the fee schedule and other fee terms as set forth herein; 5. Client fully understands that Attorney accepts no responsibility or liability of any nature for any matters related to this cause which precede the date of this Agreement; 6. Client fully understands that there is a Minimum Fee Deposit of $ , paid simultaneously with the execution of this Contract; $ of such fee IS IN NO PART REFUNDABLE, although time expended on your behalf will be credited toward this fee. The Minimum Fee Deposit is based upon the perceived complexity of your case, the likelihood that


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acceptance of your case may preclude me from taking other cases and the skill and expertise of the attorney; 7. Client fully understands that such Minimum Case Fee deposit is absolutely vested to LAW OFFICE OF MARK L. MEDLEY, P. C. upon execution of this Agreement; 8. Client fully understands that there is a Trust Deposit of $ ______________ (part of the minimum fee deposit) which is to be paid simultaneously with the execution of this contract. Any fees deposited in trust and not expended will be refunded to Client at the close of the case, less all fees, and expenses owing the firm. Client understands that the fees in this matter may well exceed $40,000.00. 9. Client fully understands that at such time as the Minimum Case Fee referred to in paragraph 6 and the Trust Deposit referred to in paragraph 8 above have been expended, Client shall be required to make an additional trust deposit or maintain a current balance with the Attorney at the Attorney's discretion; 10. Client fully understands that no less than the 1st day of the month prior to the month in which a trial of this cause of action is set, unless other arrangements are specifically made in writing, Attorney requires any past due or billed and unpaid fees and expenses to be brought current and a trial deposit to be made in an amount not less than the amount determined by multiplying 9 hours per day by the attorney's hourly rate as provided herein for the number of trial days estimated by the Attorney; 11. I DO NOT REPRESENT CLIENTS ON A FIXED-FEE BASIS IN CONTESTED CASES. Any figures quoted as to the total cost of services are merely estimates, based on stated hypothetical occurrences and they cannot be relied upon as an accurate estimate. Your adversary, the opposing attorney, or others may engage in activities requiring attorney to expend additional time not originally contemplated; 12. Client fully understands that Attorney may withdraw from representation in the event Client: a. Insists upon presenting a claim or defense not warranted under existing law and which cannot be supported by a good faith argument for extension or reversal of such law. b. Personally seeks to pursue an illegal course of conduct. c. Requests that the Attorney pursue a course of conduct which is illegal or prohibited under the disciplinary rules. d. By other conduct renders it unreasonably difficult for the Attorney to carry out employment.


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e. Insists upon the Attorney engaging in conduct which is contrary to the judgment or advice of the attorneys. f. Disregards an agreement with Attorney as to fees or services, costs or expenses rendered. g. Fails to keep attorney promptly informed of any change in Client' home address and home telephone number. h. After investigation of the facts and research of the law, does not wish to continue to represent Client. 13. This agreement shall not bind ATTORNEY to represent you after judgment is rendered and entered, but if we represent you after judgment without a new compensation agreement, then for the additional work, you shall pay the greater of a reasonable fee as defined above or the hourly fee arrangement above-described, plus in either case, the expenses under the same terms of this Agreement. This Agreement inures to the benefit of and binds the parties', their heirs, successors, and assigns. 14. ATTORNEY and CLIENT agree that no settlement or disposition of this matter shall be made without the consent of both ATTORNEY and CLIENT. 15. CLIENT shall notify ATTORNEY of any change of address, residence phone number, employment and employment telephone number, within 48 hours of any such change. If CLIENT fails to supply ATTORNEY with this information, ATTORNEY may, within his sole discretion, withdraw from representing CLIENT or abstain from rendering any further legal services to CLIENT until CLIENT have complied with this requirement. 16. Any NOTICE required to be made by ATTORNEY, CLIENT, under the terms of this contract, by the Code of Professional Conduct or by any of the State or Federal Rules of P