Friday, September 16, 2016

Attorney Liens - 10 Real World Tips

     As valuable service providers attorneys too have the right to get paid.  Liens are a way to enforce that right.  In the real world, attorney liens sound better than they work, and they are fraught with risk.  Here are some tips to minimize trouble:

1.  Although it is customary to assert both, it usually is the charging lien that matters most.  A lien is  a “claim or charge on property for payment of some debt, obligation or duty.”  Black’s Law Dictionary (West 1979), p. 832.   Most state statutes provide for two kinds - a charging lien and a retaining lien.  For example in Colorado, see CRS 12-5-119 and 12-5-120.  A charging lien is one "on any money, property ... claims and demands ..., on any judgment they may have obtained or assisted in obtaining, in whole or in part, and on any and all claims and demands in suit for any fees or balance of fees due or to become due from any client."  The retaining lien is "for a general balance of compensation upon any papers of his client which have come into his possession ... and upon money due to his client in the hands of the adverse party in an action or proceeding in which the attorney was employed from the time of giving notice of the lien to that party." 

2.  Accurate written notice of lien duly must be given, and filed in court as appropriate.  The lawyer can enforce the lien via motion in the context of the court case he or she handled (or is handling) for the client, or via a separate civil action.  The enforcement procedure otherwise is not well delineated or prescribed.  Generally it resembles a motion for summary judgment and should be handled accordingly.  At the outset, move to seal the file or at least limit public access.

3.  The lien is only as good as the underlying fee agreement and to that extent arguably subject to the rules that govern them.  If the lawyer has withdrawn from a court case giving rise to the lien, such withdrawal must have been justified (and approved by the court) and otherwise be completely consistent with the fee agreement.

4.  It is customary for the lien to generate all kinds of boundless and timeless scrutiny, counterclaims, accusations and grievances - valid or not.  Proceed accordingly including making sure the file supports the lien and the potential recovery is worth the brain damage.  Consider having an experienced lawyer outside the firm look over the file before pursuing the lien.

5.  Once the lien is pending, alternative dispute resolution should be considered (and likely will be required by the court anyway).  Non-binding mediation is preferred as it is quick, inexpensive, confidential and gentler on the parties.  A bad settlement may be better than a good judgment.

6.  Consider requesting the appointment of a special master if the underlying case involves particular areas of legal expertise.  For example, not all judges are versed in the nuances of a personal injury practice.

7.  It can take a year to resolve the lien (i.e. to determine its validity, amount, and enforcement), more of course if the judge overseeing the matter is slow to rule or there are appeals.  Expect at least one evidentiary hearing.

8.  The lawyer's (and staff) time spent on the underlying case will have huge influence on the validity and amount of the lien.  Accurate time records must be available.  Contemporaneous records are better than not, and non-contemporaneous records are better than none.  Bundling of time - the grouping of services reflected in a single time measurement -  is not preferred but is acceptable (although it may carry less weight with the judge).

9.  The case file of course must be tight, consistent and supportive before commencing the process, but don't expect the judge to read through every page.  Consider using affidavits to summarize services provided, time spent, costs incurred, client difficulties encountered, etc. 

10.  Expert evidence (most likely affidavits) may be necessary to support the lien (and counter it), but remember the lawyer who handled the case and client is the best expert and should assert him or herself as such throughout the process.

     Attorney liens are tricky.  Experience counts.  Call Sanderson Law, P.C., 303-444-8846, if you are considering one.