Rule 1.5. Requirements for written contract and fees.

(a)    Before providing any services, a licensed paralegal practitioner shall provide the client with a written contract that:

(a)(1) states the purpose for which the licensed paralegal practitioner has been hired;

(a)(2) states the services to be performed;

(a)(3) states the rate or fee for the services to be performed and whether and to what extent the client will be responsible for any costs, expenses or disbursements in the course of the representation;

(a)(4) includes a statement printed in 12-point boldface type that the licensed paralegal practitioner is not an attorney and is limited to practice in only those areas in which the licensed paralegal practitioner is licensed;

(a)(5) includes a provision stating that the client may report complaints relating to a licensed paralegal practitioner or the unauthorized practice of law to the Utah State Bar, including a toll-free number and Internet website;

(a)(6) identifies the document to be prepared;

(a)(7) explains the purpose of the document;

(a)(8) explains the process to be followed in preparing the document;

(a)(9) states whether the licensed paralegal practitioner will be filing the document on the client’s behalf; and

(a)(10) states the approximate time necessary to complete the task.

(b) A licensed paralegal practitioner may not make an oral or written statement guaranteeing or promising an outcome, unless the licensed paralegal practitioner has some basis in fact for making the guarantee or promise.

(c)    A written contract is void if not written in accordance with this section.

(d) A licensed paralegal practitioner shall not make an agreement for, charge or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:

(d)(1) the time and labor required and the skill requisite to perform the legal service properly;

(d)(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the licensed paralegal practitioner;

(d)(3) the fee customarily charged in the locality for similar legal services;

(d)(4) the amount involved and the results obtained;

(d)(5) the time limitations imposed by the client or by the circumstances;

(d)(6) the nature and length of the professional relationship with the client; and

(d)(7) the experience, reputation and ability of the licensed paralegal practitioner or licensed paralegal practitioners performing the services.

(d)(8) Reserved.

(e) Any changes in the basis or rate of the fee or expenses shall also be communicated to the client. 

(f) A licensed paralegal practitioner may not enter into a contingency fee agreement with a client.

(g) A division of a fee between licensed paralegal practitioners who are not in the same firm may be made only if:

(g)(1) the division is in proportion to the services performed by each licensed paralegal practitioner or each licensed paralegal practitioner assumes joint responsibility for the representation;

(g)(2) the client agrees to the arrangement, including the share each licensed paralegal practitioner will receive, and the agreement is confirmed in writing; and

(g)(3) the total fee is reasonable.

 

Comment

Reasonableness of Fee and Expenses

[1] Paragraph (d) requires that licensed paralegal practitioners charge fees that are reasonable under the circumstances. The factors specified in (d)(1) through (d)(7) are not exclusive. Nor will each factor be relevant in each instance. Paragraph (d) also requires that expenses for which the client will be charged must be reasonable. A licensed paralegal practitioner may seek reimbursement for the cost of services performed in-house, such as copying, or for other expenses incurred in-house, such as telephone charges, either by charging a reasonable amount to which the client has agreed in advance or by charging an amount that reasonably reflects the cost incurred by the licensed paralegal practitioner.

[2] Reserved.

[3] Reserved.

Terms of Payment

[4] A licensed paralegal practitioner may require advance payment of a fee but is obligated to return any unearned portion. See Rule 1.16(d). A licensed paralegal practitioner may accept property in payment for services, such as an ownership interest in an enterprise, providing this does not involve acquisition of a proprietary interest in the cause of action or subject matter of the litigation contrary to Rule 1.8(i). However, a fee paid in property instead of money may be subject to the requirements of Rule 1.8(a) because such fees often have the essential qualities of a business transaction with the client.

[5] An agreement may not be made whose terms might induce the licensed paralegal practitioner improperly to curtail services for the client or perform them in a way contrary to the client's interest. For example, a licensed paralegal practitioner should not enter into an agreement whereby services are to be provided only up to a stated amount when it is foreseeable that more extensive services probably will be required, unless the situation is adequately explained to the client. Otherwise, the client might have to bargain for further assistance in the midst of a proceeding or transaction. However, it is proper to define the extent of services in light of the client's ability to pay. A licensed paralegal practitioner should not exploit a fee arrangement based primarily on hourly charges by using wasteful procedures.

[6] Prohibited Contingent Fees.  Paragraph (f) prohibits a licensed paralegal practitioner from charging a contingent fee.

Division of Fees

[7] A division of fee is a single billing to a client covering the fee of two or more licensed paralegal practitioners or a licensed paralegal practitioner and a lawyer who are not in the same firm. A division of fee facilitates association of more than one licensed paralegal practitioner or lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring licensed paralegal practitioner and a lawyer or trial specialist. Paragraph (g) permits the division of a fee either on the basis of the proportion of services they render or if each practitioner assumes responsibility for the representation as a whole. In addition, the client must agree to the arrangement, including the share that each practitioner is to receive, and the agreement must be confirmed in writing. Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the licensed paralegal practitioner and the other licensed paralegal practitioner or lawyer were associated in a partnership. A licensed paralegal practitioner should only refer a matter to a licensed paralegal practitioner or lawyer whom the referring licensed paralegal practitioner reasonably believes is competent to handle the matter. See Rule 1.1.

[8] Paragraph (g) does not prohibit or regulate division of fees to be received in the future for work done when licensed paralegal practitioners were previously associated in a law firm.

Disputes Over Fees

[9] If a procedure has been established for resolution of fee disputes, such as an arbitration or mediation procedure established by the Bar, the licensed paralegal practitioner must comply with the procedure when it is mandatory, and, even when it is voluntary, the licensed paralegal practitioner should conscientiously consider submitting to it.

 

Effective November 1, 2018