My Lawyer is Overcharging Me on Work That Was Never Completed
My question involves malpractice by a lawyer in the state of: New York
I owned a business that had a shareholder agreement issue. The shareholder was demading a certain percentage of the location but did nothing and the legal documentation of the store claimed she did not have any percentage. I hired a lawyer to fix this case but he was slow in contacting me and therefore I hired another lawyer. We signed an agreement for around $40,000. It was similar to a retainer fee but it also included all the work he was going to do. I paid off this debt but in the end he did not do anything. He continued on "working" by talking to various people and asking me for documents after documents. Eventually he charged me around $70,000to continue. This is when I told him I did not want his services anymore.
He later insists that I pay him around $60,000 because of the services he "completed." We did not sign any agreement regarding this amount and he did not even complete anything. The case regarding the shareholder is still in the courts being processed. He claims, however, that he spoke to various people and did his job because of the documents he reviewed.
Recently I received a summons from his law office stating that I must appear in court regarding this matter or I could apply for arbitration. Unfortunately this lawyer was also working with his brother on the case and therefore they are both suing me. Addressed in the summons was my business that had the shareholder problem but has been recently closed down due to insufficient funds, my other business, and myself. I am not a wealthy man and these are small mom-and-pop locations. My ex-lawyer is demanding money that he does not deserve. How can I rectify this situation without wasting more money on legal fees with another lawyer for this case? Is arbitration a more sound reasoning? And if so, how would I go about arbitation in New York. Also is his claim justified? What can I do in this situation to not pay him this huge outstanding balance that he claims he deserves?
Re: My Lawyer is Overcharging Me on Work That Was Never Completed
First, he has to give you an itemized statement. The charges on that statement have to be reasonable in llight of industry standards in that area of law. He can't just make up a total.
I don't understand how the case you describe could have raked up such charges unless the attorney did a lot of unnecessary stuff. You could go through a civil filing, motions and hearings, discovery, pre-trial and a full multi-day jury trial for less than that in most circumstances.
On the other hand, if you have a law firm that wants to pump up the charges, it can be easy to do, and hard to fight. I had a battle with Ameritech and they hired a big intellectual property law firm (trademark issue). It was just paperwork back and forth. There was no hearing and it never even made it to discovery. They included the same exhibits with everything they filed and went way overboard for no reason. They billed Ameritech $65,000. They were also stupid as they did not do their homework and sued a dissolved corporation, so they couldn't collect a dime.
For that much money I would find an attorney that was an expert at billing and have him/her go through the bill and find any problems in it and then testify as an expert witness.
For instance, a ton of hours spent researching some issue of law as if it was undecided or in conflict when in reality it was well established law and an hour would be all that was needed.
Sometimes unusual circumstances can pump up the bill. For instance, I recently was involved in a mediation here in Key West. Four of the five lawyers came from the Miami area and had to drive or fly down which basicly meant they spent an entire day on this case. The mediator was $1,200.
That was overall a $10,000 day, though of course the costs were split between the parties.
Re: My Lawyer is Overcharging Me on Work That Was Never Completed
I hope, for those fees, this was a complex legal situation with a great deal of money at stake.... I realize we only have your side, but under the facts you've given that seems like a lot of money for the work performed.
Your obligation to pay your lawyer is principally a matter of contract. Either the work he claims to be additional was covered by the original contract for services, and (per your description) is included in your initial payment, or it is not. If it's not, and you implicitly or explicitly authorized it, you owe for that work at the rate defined in your retainer agreement or, in the unlikely event that retainer agreement doesn't indicate how additional work will be billed, a reasonable amount under the circumstances.
If you knew he was doing work he believed to be outside of the original $40K, and you continued to let him do the work and bill you until the fees reached a total of $70K and only then told him to stop, never previously objecting that you believed the work to be included in the original $40K, there's a good chance that a court will uphold his bill.
How did his brother come into this? Did you retain his brother separately? Did you retain his brother in your original $40K contract? Is it that your contract authorized your lawyer to hire other professionals, with you being responsible to pay them?