Weighing the Factors

Weighing the Factors

Eight listed factors do not add up to a fee on their own. Rule 1.5(a) forbids a lawyer to make an agreement for, charge, or collect an unreasonable fee, and it says the factors to be considered in judging reasonableness “include” the ones it lists.¹ The earlier subsections took each factor alone; this one shows how a decision-maker combines them into a single judgment about a single fee. The rule supplies no weights, no minimum number of factors that must favor the lawyer, and no formula that converts the eight into a dollar figure. Any such formula would err in both directions, excusing unfair fees on matters it priced generously and condemning fair fees on matters it priced stingily.

Courts state the method in three propositions. No single factor controls the reasonableness of a fee; not every factor is relevant in every case; and the weight of each factor depends on the circumstances of the particular case.² The first proposition blocks a tempting shortcut. Hours alone would reward the slow lawyer, the local rate alone would excuse padded time billed at a customary rate, and the outcome alone would punish a diligent lawyer whose strong case was lost. The temptation is strongest when one factor makes a fee look large. A reviewer who condemns a contingent fee because the lawyer worked few hours compared with the size of the recovery has fallen into it. The size of such a fee next to the work performed does not decide its reasonableness, and the risk the lawyer assumed at the outset ordinarily is the crucial consideration.³

The most common shortcut is hours multiplied by a rate, and McCabe v. Arcidy rejects it as the only measure. The court explained that no rigid, precise measure of reasonableness exists, because the weight of each factor depends on the circumstances of the case. It added that a calculation of reasonable hours times a reasonable hourly rate is not the sole benchmark of reasonableness, since other fee arrangements are permissible, especially in certain legal specialties.⁴ A reviewer who measures every fee by hours times rate repeats the single-factor error in a different form.

Not every factor is relevant in every case.⁵ Preclusion of other work matters only when the engagement actually costs the lawyer other engagements, and time limitations matter only when someone imposed one, so a matter with neither fact leaves those factors with nothing to measure. A factor with no facts behind it drops out of the analysis and counts against neither side. A tribunal that forced every factor to point somewhere would have to treat the mere absence of a deadline as evidence about price. The findings quoted in Davis v. Miller show what the exercise looks like on paper. They run down the considerations one at a time. The fees were reasonable as to time and labor, the novelty and difficulty of the questions, and the skill required; within the range customarily charged for similar services; and reasonable for the amount involved and the results obtained. The findings then turn to preclusion of other engagements, the time limitations imposed by the court, the nature and length of the professional relationship with the client, and the experience, reputation, and ability of the lawyers.⁶ Two lessons follow. Each finding speaks to one factor, and the conclusion rests on all of them together, which is what weighing means in practice. And a time limitation can come from a court as well as from a client.

The same rate produced opposite answers because the factors around the market comparison differed, and preclusion of other work played no part in either. Stopping at the local rate would condemn both lawyers, and ignoring it would excuse both.

The list is also open-ended. Because the rule says the factors “include” those listed, courts may consider other factors in appropriate cases.⁷ Jurisdictions also write their own versions. Washington’s rule, as quoted in Holmes v. Loveless, includes as factor (8) whether the fee agreement or confirming writing shows that the client received a reasonable and fair disclosure of the material elements of the agreement and of the lawyer’s billing practices.⁸ A question set in a jurisdiction with such a variation expects that jurisdiction’s list, and a question that names no jurisdiction expects the Model Rule’s.

A longer list appears in cases where someone other than the client must pay, and it should not be mistaken for the Rule 1.5(a) list. In Wood v. Wood, the court explained that the Aetna factors, although similar to the factors used to judge a fee between an attorney and his client, are designed to judge reasonableness when payment is sought from a third party.⁹ The setting explains the difference. A third party ordered to pay never signed the fee agreement, so the tribunal wants yardsticks beyond that agreement. When a question applies Model Rule 1.5(a) to a lawyer’s own client, use the Rule’s factors and leave the fee-shifting list aside unless the facts place the problem in that setting.¹⁰