United States District Court
Northern District Of Illinois
Local Rules
LR83.51.5. Fees
(a) A lawyer’s fee shall be reasonable. The factors to be considered in determining the
reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability, of the lawyer or lawyers performing
the services; and
(8) whether the fee is fixed or contingent.
(b) When the lawyer has not regularly represented the client, the basis or rate of
the fee shall be communicated to the client before or within a reasonable time
after commencing the representation.
(c) A fee may be contingent on the outcome of the matter for which the service is
rendered, except in a matter in which a contingent fee is prohibited by section
(d) or other law. A contingent fee agreement shall be in writing and shall
state the method by which the fee is to be determined, including the percentage or
percentages that shall accrue to the lawyer in the event of settlement, trial
or appeal, litigation and other expenses to be deducted from the recovery, and
whether such expenses are to be deducted before or after the contingent fee is
calculated. Upon conclusion of a contingent fee matter, the lawyer shall
provide the client with a written statement stating the outcome of the matter and, if
there is a recovery, showing the remittance to the client and the method of
its determination.
(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) any fee in a domestic relations matter, the payment or amount of which is
contingent upon the securing of a dissolution of marriage or upon the amount of
maintenance or support, or property settlement in lieu thereof, except that this
prohibition shall not extend to representation in matters subsequent to final
judgments in such cases;
(2) a contingent fee for representing a defendant in a criminal case.
(e) Notwithstanding section (c), a contingent fee agreement regarding the
collection of commercial accounts or of insurance company subrogation claims may be
made in accordance with the customs and practice in the locality for such legal
services.
(f) Except as provided in section (j), a lawyer shall not divide a fee for legal
services with another lawyer who is not in the same firm, unless the client
consents to employment of the other lawyer by signing a writing which discloses:
(1) that a division of fees will be made;
(2) the basis upon which the division will be made, including the economic benefit
to be received by the other lawyer as a result of the division; and
(3) the responsibility to be assumed by the other lawyer for performance of the
legal services in question.
(g) A division of fees between lawyers who are not in the same firm shall be made
in proportion to the services performed and responsibility assumed by each
lawyer, except where the primary service performed by one lawyer is the referral of
the client to another lawyer and
(1) the receiving lawyer discloses that the referring lawyer has received or will
receive economic benefit from the referral and the extent and basis of such
economic benefit, and
(2) the referring lawyer agrees to assume the same legal responsibility for the
performance of the services in question as would a partner of the receiving
lawyer.
The total fee of the lawyers shall be reasonable.
(h) For purposes of section (g) “economic benefit” shall include:
(1) the amount of participation in the fee received with regard to the particular
matter;
(2) any other form of remuneration passing to the referring lawyer from the
receiving lawyer, whether or not with regard to the particular matter; and
(3) an established practice of referrals to and from or from and to the receiving
lawyer and the referring lawyer.
(i) Notwithstanding section (f), a payment may be made to a lawyer formerly in the
firm, pursuant to a separation or retirement agreement.
Committee Comment. Basis or Rate of Fee. When the lawyer has regularly represented a client, they ordinarily will have
evolved an understanding concerning the basis or rate of the fee. In a new
client-lawyer relationship, however, an understanding as to the fee should be
promptly established. It is not necessary to recite all the factors that underlie
the basis of the fee, but only those that are directly involved in its
computation. It is sufficient, for example, to state that the basic rate is an hourly
charge or a fixed amount or an estimated amount, or to identify the factors that
may be taken into account in finally fixing the fee. When developments occur
during the representation that render an earlier estimate substantially
inaccurate, a revised estimate should be provided to the client. A written statement
concerning the fee reduces the possibility of misunderstanding. Furnishing the
client with a simple memorandum or a copy of the lawyer’s customary fee schedule is sufficient if the basis or rate of the fee is set
forth.
Terms of Payment. A lawyer may require advance payment of a fee, but is obliged to return any
unearned portion. See LR83.51.16(e). A lawyer 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 LR83.51.8(i). However, a fee paid in property instead of
money may be subject to special scrutiny because it involves questions
concerning both the value of the services and the lawyer’s special knowledge of the value of the property.
An agreement may not be made whose terms might induce the lawyer improperly to
curtail services for the client or perform them in a way contrary to the client’s interest. For example, a lawyer 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 lawyer should not exploit a fee arrangement based
primarily on hourly charges by using wasteful procedures. When there is doubt whether a
contingent fee is consistent with the client’s best interest, the lawyer should offer the client alternative bases for the
fee and explain their implications. Applicable law may impose limitations on
contingent fees, such as a ceiling on the percentage.
Division of Fee. A division of fee is a single billing to a client covering the fee of two or
more lawyers who are not in the same firm. A division of fee facilitates
association of more than one 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 lawyer and a trial specialist. Section (g) permits
the lawyers to divide a fee on either the basis of the proportion of services
they render or by agreement between the participating lawyers if all assume
responsibility for the representation as a whole and the client is advised and does
not object. It does not require disclosure to the client of the share that
each lawyer is to receive. Joint responsibility for the representation entails the
obligations stated in LR83.55.1 for purposes of the matter involved.
Disputes Over Fees. If a procedure has been established for resolution of fee disputes, such as an
arbitration or mediation procedure established by the bar, the lawyer should
conscientiously consider submitting to it. Law may prescribe a procedure for
determining a lawyer’s fee, for example, in representation of an executor or administrator, a class
or a person entitled to a reasonable fee as part of the measure of damages.
The lawyer entitled to such a fee and a lawyer representing another party
concerned with the fee should comply with the prescribed procedure.