Fees, Trust Money and a Nervous Client
You are a paralegal in a firm handling a personal injury claim. The client, Ms. Achieng, has been awarded KES 850,000 in a settlement. The firm's engagement letter provides for a fee of 20% of the award plus disbursements of KES 45,000. The settlement cheque has been received and deposited into the firm's client account. Ms. Achieng calls in distress: she says she was told she would receive 'about 800,000' and that a friend told her the firm cannot take more than a certain amount. The partner is away and asks you by text to 'release her money, less our fees, today' without further detail. The file contains no signed fee note or bill of costs.
1. What must happen before any money is released to the client or retained as fees?
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Before release:
- Reconcile the figures - settlement KES 850,000; disbursements KES 45,000; fee at 20% of the award = KES 170,000. Confirm what the engagement letter actually says and whether the fee is on the gross award or net of disbursements.
- Render a bill or fee note - fees should not simply be deducted without a written account. The client is entitled to know what is being charged and why.
- Check trust account rules - client money in the client account must be dealt with only on proper authority; fees are transferred to the office account only on a rendered bill or with the client's written authority.
- Communicate with the client in writing, explaining the calculation.
Reasoning: A text message saying 'release her money, less our fees' is not a substitute for a proper fee note and reconciliation. The paralegal should prepare the reconciliation and draft the fee note for the partner's approval, not act on an ambiguous instruction.
2. Ms. Achieng disputes the fee. How should you respond, and what should you not say?
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Respond by:
- Acknowledging her concern and explaining the calculation in plain language, item by item.
- Confirming what the engagement letter says and providing a copy.
- Explaining that she may query the bill and, if unresolved, may have recourse to the relevant professional body or the taxing master.
- Putting the explanation in writing and keeping a record.
Do not:
- Say 'the firm is entitled to whatever it decides' or suggest she has no choice.
- Promise a reduction you have no authority to give.
- Discuss the partner's instructions or internal discussions.
- Release funds or retain fees while the dispute is unresolved without the partner's decision.
Reasoning: Transparency and a written account protect both the client and the firm. A paralegal should not make concessions or threats, but should ensure the client understands her position and options.