Professional ethics

Fee dispute over an escalating contingency & the value of mandatory arbitration.

Our attorneys drafted a complaint and mailed it to the defendants, triggering a settlement. Our fee dispute revolves around this language in our agreement: “We will draft and file a complaint on your behalf.” If the matter reached that stage, we were to pay an extra 10%. The attorneys contend “mailing the complaint to the defendant was the equivalent of filing” and they are due the extra 10%. Is that a reasonable interpretation? And: I understand we can compel them to fee arbitration. Can we compel binding arbitration though? If not, what's the point? If they don't like the result, why not drag it into court, able to represent themselves while we burn more fees? If their strategy is threat, make us incur fees, where is the value of mandatory but non-binding arbitration?

Nathan’s Answer

The analysis can go either way but the net effect is acknowledged by you that the complaint being mailed triggered a settlement. Thus if you have reached the "stage" where the complaint will be drafted and filed, it may not be necessary that the complaint was filed, but rather that the stage was reached, where here it seems like it was. May or may not be cost-effective to pursue over 10%.

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