N.M.: Underlying criminal matter
Facts: Plaintiffs, clients in the matter, brought suit against defendants, their attorneys. Plaintiffs retained defendants to represent them in criminal cases filed in the New Mexico state court. Defendants charged plaintiffs a flat fee of $15,000. There was no written fee agreement. Clients became unhappy with attorneys’ representation especially with regards to clients accepting a plea offer that attorneys believed to be highly favorable. As a result, plaintiffs rejected the plea offer, discharged the attorneys, and demanded the retainer fee back claiming ineffective representation.
Issue: Does a court have the power to reduce the amount fixed by a contract between a client and attorney, if there is no showing of misconduct or neglect on the part of the lawyer?
Ruling: No. Under New Mexico law, if the parties have reached a contract of retainer that fixes the amount of the attorney’s compensation, and the attorney has not offended it , either through misconduct or neglect in providing professional services, the court does not have the power to reduce the amount fixed by the contract.
Lesson: Although the laws vary state to state, in New Mexico, where the attorney has not committed misconduct or neglect, a client cannot simply change the retainer fee agreement, and only pay the attorney for services rendered up to the discharge. If this were allowed, there would be no purpose in a client and attorney contracting, and would thus put the attorney at an unfair disadvantage.
Editor’s Note: Interestingly, the Court must have felt that the flat fee charged for the underlying defense services was reasonable under the circumstances, since it did not mention that all attorneys fees are required to be reasonable, under RPC 1.5.