What is an attorney lien in family law?
Your family law attorney client relationship begins with a retainer agreement. A dispute over legal fees can result in an attorney lien in your family law case. Fortunately, the attorney lien is infrequently needed in a family law case.
Retainer agreement in a family law case
All New Jersey family law attorney client relationships require a retainer agreement. In fact the New Jersey Supreme Court requires a number of things to be included in the family law or retainer agreement. Universally, the family law retainer agreement must include the statement of client’s rights and responsibilities. Citation
Billing and the attorney lien and family law
The lawyer must provide a clear and understandable bill no less frequently than every three months. The client is obligated to pay pursuant to the terms of the retainer agreement. If the client does not pay New Jersey has an elaborate fee arbitration procedure. There is an additional procedure for the imposition of an attorney lien. An attorney lien in family law allows the former lawyer of a particular family law litigant to be relieved from the case. Thereafter, the lawyer can ask for an order imposing an attorney lien in the family law case against funds or assets to be paid to the former client.
Does the attorney lien in family law work when a litigant receives no assets?
The New Jersey appellate division recently decided in a case called Ippolito – citation. It turns out that Mr. Ippolito went through a number of family law attorneys. One of his former attorneys received an attorney lien for $20,000 against assets distributed to the husband.
What about a very bad actor?
Mr. Ippolito failed to pay his lawyer. The attorney lien against his share of family assets was entered. However, the trial court found that he had acted with “extreme and purposeful misconduct”. He “failed to provide discovery and interfered with witnesses and the sale of marital assets.”Ippolito. In other words, the husband acted in an egregious manner during the family law case.
What became of the attorney lien?
The husband was so bed that the court stripped him of any assets. He essentially received zero. Accordingly, the lawyer with the attorney lien in the family law case got zero. The court reaffirmed the principle that an attorney lien is only good if the litigant against whom the lien is secured receives assets in the case.
Here are the Rules on Attorney Retainer Agreement
5:3-5. ATTORNEY FEES AND RETAINER AGREEMENTS IN CIVIL FAMILY ACTIONS; WITHDRAWAL
(a) Retainer Agreements. Except where no fee is to be charged, every agreement for legal services to be rendered in a civil family action shall be in writing signed by the attorney and the client, and an executed copy of the agreement shall be delivered to the client. The agreement shall have annexed thereto the Statement of Client Rights and Responsibilities in Civil Family Actions in the form appearing in Appendix XVIII of these rules and shall include the following:
(1) a description of legal services anticipated to be rendered;
(2) a description of the legal services not encompassed by the agreement, such as real estate transactions, municipal court appearances, tort claims, appeals, and domestic violence proceedings;
(3) the method by which the fee will be computed;
(4) the amount of the initial retainer and how it will be applied;
(5) when bills are to be rendered, which shall be no less frequently than once every ninety days, provided that services have been rendered during that period; when payment is to be made; whether interest is to be charged, provided, however, that the running of interest shall not commence prior to thirty days following the rendering of the bill; and whether and in what manner the initial retainer is required to be replenished;
(6) the name of the attorney having primary responsibility for the client’s representation and that attorney’s hourly rate; the hourly rates of all other attorneys who may provide legal services; whether rate increases are agreed to, and, if so, the frequency and notice thereof required to be given to the client;
(7) a statement of the expenses and disbursements for which the client is responsible and how they will be billed;
(8) the effect of counsel fees awarded on application to the court pursuant to paragraph (c) of this rule;
(9) the right of the attorney to withdraw from the representation, pursuant to paragraph (d) of this rule, if the client does not comply with the agreement; and
(10) the availability of Complementary Dispute Resolution (CDR) programs including but not limited to mediation and arbitration.
(b) Limitations on Retainer Agreements. During the period of the representation, an attorney shall not take or hold a security interest, mortgage, or other lien on the client’s property interests to assure payment of the fee. This Rule shall not, however, prohibit an attorney from taking a security interest in the property of a former client after the conclusion of the matter for which the attorney was retained, provided the requirements of R.P.C. 1.8(a) shall have been satisfied. Nor shall the retainer agreement include a provision for a non-refundable retainer. Contingent fees pursuant to R. 1:21-7 shall only be permitted as to claims based on the tortious conduct of another, and if compensation is contingent, in whole or in part, there shall be a separate contingent fee arrangement complying with R. 1:21-7. No services rendered in connection with the contingent fee representation shall be billed under the retainer agreement required by paragraph (a) of this rule, nor shall any such services be eligible for an award of fees pursuant to paragraph (c) of this rule.
(c) Award of Attorney Fees. Subject to the provisions of R. 4:42-9(b), (c), and (d), the court in its discretion may make an allowance, both pendente lite and on final determination, to be paid by any party to the action, including, if deemed to be just, any party successful in the action, on any claim for divorce, dissolution of civil union, termination of domestic partnership, nullity, support, alimony, custody, parenting time, equitable distribution, separate maintenance, enforcement of agreements between spouses, domestic partners, or civil union partners and claims relating to family type matters. A pendente lite allowance may include a fee based on an evaluation of prospective services likely to be performed and the respective financial circumstances of the parties. The court may also, on good cause shown, direct the parties to sell, mortgage, or otherwise encumber or pledge assets to the extent the court deems necessary to permit both parties to fund the litigation. In determining the amount of the fee award, the court should consider, in addition to the information required to be submitted pursuant to R. 4:42-9, the following factors: (1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award.
(d) Withdrawal from Representation.
(1) An attorney may withdraw from the representation ninety (90) days or more prior to the scheduled trial date or prior to the Early Settlement Panel hearing, whichever is earlier, upon the client’s consent in accordance with R. 1:11-2(a)(1). If the client does not consent, the attorney may withdraw only on leave of court as provided in subparagraph (2) of this rule.
(2) After the Early Settlement Panel hearing or after the date ninety (90) days prior to the trial date, whichever is earlier, an attorney may withdraw from the action only by leave of court on motion on notice to all parties. The motion shall be supported by the attorney’s affidavit or certification setting forth the reasons for the application and shall have annexed the written retainer agreement. In deciding the motion, the court shall consider, among other relevant factors, the terms of the written retainer agreement and whether either the attorney or the client has breached the terms of that agreement; the age of the action; the imminence of the Early Settlement Panel hearing date or the trial date, as appropriate; the complexity of the issues; the ability of the client to timely retain substituted counsel; the amount of fees already paid by the client to the attorney; the likelihood that the attorney will receive payment of any balance due under the retainer agreement if the matter is tried; the burden on the attorney if the withdrawal application is not granted; and the prejudice to the client or to any other party.