Seriously Overcharged By Lawyer, Whta Do I Do?
Had a call with a lawyer and accountant I was referred to about structuring LLCs and holding companies for owning properties in multiple states for liability and tax efficiency a couple months ago. Accountant came up with answer in minutes during free consultation as he is very familiar with the area...lawyer went on the give me a bill 6 weeks later for over 25 hours (over $10K) claiming he did all sorts of research on statutes in various states about correct state to set LLC up in vs get operting approval from, etc. His final answer wasn't any different than what the accountant said on the call...he seems to have wasted an extreme amount of money on educating himself in an area he doesn't really know - he does dev't, not own/operate multi-families. We had no prior arrangement about max cost he could go to, had no estimate that this would cost ___. Just a bill delivered to me.
What can I do?
Pay the bill. Next time ask if the subject under discussion is within the professional's realm of expertise. If not, then ask for a referral.
send back the bill with a nice letter saying you consider these charges excessive and are not going to pay them. Find yourself a new lawyer.
Thanks to both of you for your replies.
Problem with asking a lawyer if ___ is within his/her expertise...which I did...they all say yes. Literally I have talked with many lawyers and not one said it was beyond them. BUT, if you get someone who is really familiar, you get answers in an hour or half hour initial consultation...or most of the way there. I guess it seems as if it were a really small job they couldn't be bothered with I suppose I could get a reply that was more honest, but when they see tons of units....I think they see fee$$.
Send bill back and say it's excessive...won't they just sue me or go to collection? Do I have any firmer ground to stand on, like he had no idea what he was doing or we never agreed he could run up $10K?
First of all, always establish price and billing practices. Please however note, this practice will not necessarily eliminate the chance of your current situation repreating itself in the future. In my experience, it is easy to find yourself being overbilled by an attorney even after holding such a conversation.
Moving on to your question; I agree w/the previous post suggesting a letter disputing the bill. So far as being sued is concerned........ so what? Being sued does not mean you are in the wrong. Too often the threat of suit is just an empty bullying technique. Furthermore, the "burdon of proof" is on the entity bringing the suit. In other words, if you are infact sued and it proceeds to a hearing, this joker must convince a court that your questions required 25+ hrs of research (which was authorized by you).
I do not know the details of your meeting, nor am I an attorney. Nevertheless, I find this practice so disgusting that I would consider filing a complaint w/the NY BA.
Good Luck (Although I don't think you need it!!)
Thanks, Boston. I will indeed file a complaint if this is not settled fairly and quickly. I'll call tomorrow for parameters and procedures.
Typical, I would ask this attorney for a statement of case. That is after you can his miserable behind. A job that big requires some communication as to what his work will entail. Its really too bad a few attorneys need to screw it up for the rest of them. In the future you should interview an attorney for the specific use. Real Estate attorneys ought to do at least 50%+ of their business as RE attorneys. When they claim they did all this research it just shows they are not yet competent to do that type of law. While this bill may seem a lot if you have a lot of units in more than a half a dozen states it is possible he did the work. I got ripped off 10 years ago on a land deal I had to get reversed. Like a nimrod I didnt interview the guy before I hired him and as a result I paid for research that was un nessesary. My best schooling seems to always come out of my wallet. haha. Real Estate still pays better than my job ever did.
No attny is going to sue you for fees. All it does is guarantee a complaint to the ARDC and the threat of a malpractice suit.
Gentlemen, thank you.
I will indeed ask for statement of case. He has been fired already. The ARDC appers to be IL specific. NY has a version as well. Says that as of March 4, 2002 attorney needs to provide written letter of engagement specifying scope of work, how fees will be charged, my rights to arbitrate, etc unless it's expected that charges are less than $3,000 or unless I have retained him/her for similar work in the recent past. Never got that. I think $10k would be considered unusual in one month with no prior notice when the result was the same as was mentioned on a conf call weeks earlier with a group of accountants that specialize in large real estate clients (that he was a part of).
His claim thus far is that since they represent such large clients, they have to be super super thorough b/c one small mistake can cost millions...?
Dealjunky gave you some great advice. You never had an agreement with this attorney! I would advise you to contact the local licensing board in your area and you could also contact one of those television shows that expose shiisters like him! I would also go to the better business bureau! First I would send him a letter and cc another attorney telling him you never hired him for services rendered and what you are planning to do! This should scare him!
Best Riches,
Jeffrey Adam
[addsig]
I would challenge the bill with the Lawyer. If there was no agreement for the Lawyer to run up said cahrges, I see no reason why you should be held responsible for them. Was there a retainer? Do you have any agreement (verbal or otherwise) for this Lawyer to work on your behalf?
I am going through a similar situation with a property management firm that tends to go over and beyond our original management agreement. After their initial bluster, they have calmed down and are now willing to discuss the situation once they realized that I wasn't going to back down because of empty threats.
Be sure of your position and, if you are right, stick to it. Don't be bullied into paying a bill that you did not incur.
Good Luck!!
JS.
What was the outcome with this situation?!?!
I am on the edge of my seat here :-o
I hope it worked out for you
Once had a lawyer trying to talk a friend into going to law school and becoming one. He said it was a great job and was like having a license to steal. Seems to fit in your case.
Once had a lawyer trying to talk a friend into going to law school and becoming one. He said it was a great job and was like having a license to steal. Seems to fit in your case.
Please update us on your situation.
I recently received an unexpected bill from attorney as well. It was "only" $1000, but still overpriced. I am wondering if I should sent it back to him as well. It does not take 5+ hours to fill out court papers for eviction!
sorry i have not posted until now; lawyer says he is willing to 'talk' abou it, but not sure what that means. i have paperwork ready to file with all sorts of state, oversight agencies. he picked the wrong person to fund his mercedes on...but note that i had an air of conciliation that i would pay what was fair, but not all these hours of (bogus) 'research' will update in the coming days
still negotiating - will keep you posted!!
An attorney noticed a boy kneeling in the dirt playing with a pile of poop. The lawyer asked, "What are you doing there?" The boy replied, "Makin' people." "So who's that?" asked the lawyer, pointing to a pile. "That's a banker," came the reply. "Can you make a lawyer?" the attorney asked. The boy shot back, "Nope, not enough poop."