Attorneys fees and Compensation for legal servicesProblem Areas in Legal EthicsArellano University School of Law Arellano Law Foundation2014-2015*

CANON 20 - A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE FEES. Rule 20.01 - A lawyer shall be guided by the following factors in determining his fees:

(a) the time spent and the extent of the service rendered or required; (b) the novelty and difficulty of the questions involved; (c) The importance of the subject matter; (d) The skill demanded; (e) The probability of losing other employment as a result of acceptance of the proffered case;

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Cont(f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs; (g) The amount involved in the controversy and the benefits resulting to the client from the service; (h) The contingency or certainty of compensation; (i) The character of the employment, whether occasional or established; and (j) The professional standing of the lawyer.

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ContRule 20.02 - A lawyer shall, in case of referral, with the consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed. Rule 20.03 - A lawyer shall not, without the full knowledge and consent of the client, accept any fee, reward, costs, commission, interest, rebate or forwarding allowance or other compensation whatsoever related to his professional employment from anyone other than the client. Rule 20.04 - A lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.

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Collection suit should be the last resortRule 20.4 of the Code of Professional Responsibility advises lawyers to avoid controversies with clients concerning their compensation and to resort to judicial action only to prevent imposition, injustice or fraud. Suits to collect fees should be avoided and should be filed only when circumstances force lawyers to resort to it. - Pineda v. Atty. De Jesus, et. al. G.R. No. 155224 August 23, 2006

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Rule 138Sec. 24. Compensation of attorneys; agreement as to fees. - An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view:

1) to the importance of the subject matter of the controversy, 2) the extent of the services rendered, and 3) the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable.

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ContSection 25, Rule 138 of the Rules of Court:

SEC. 25. Unlawful retention of clients funds; contempt When an attorney unjustly retains in his hands money of his client after it has been demanded he may be punished for contempt as an officer of the Court who has misbehaved in his official transactions; but proceedings under this section shall not be a bar to a criminal prosecution.

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Rule on division of legal feesRule 9.02 - A lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law, except: (a) Where there is a pre-existing agreement with a partner or associate that, upon the latter's death, money shall be paid over a reasonable period of time to his estate or to persons specified in the agreement; or (b) Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer; or (c) Where a lawyer or law firm includes non-lawyer employees in a retirement plan even if the plan is based in whole or in part, on a profit sharing agreement.

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CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS PROFESSION.

Rule 16.01 - A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02 - A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court.

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ContRule 16.04 - A lawyer shall not borrow money from his client unless the client's interest are fully protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses in a legal matter he is handling for the client.

This rule is intended to prevent the lawyer from taking advantage of his influence over the client. Junio v. Atty. Grupo, A.C. No. 5020, December 18, 2001

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Non-payment of loan is a violation of PCR not misappropriation or embezzlement Respondents liability is thus not for misappropriation or embezzlement but for violation of Rule 16.04 of the Code of Professional Responsibility which forbids lawyers from borrowing money from their clients unless the latters interests are protected by the nature of the case or by independent advice. In this case, respondents liability is compounded by the fact that not only did he not give any security for the payment of the amount loaned to him but that he has also refused to pay the said amount. His claim that he could not pay the loan because circumstances . . . did not allow it and that, because of the passage of time, he somehow forgot about his obligation only underscores his blatant disregard of his obligation which reflects on his honesty and candor.

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Whether or not an attorney who was engaged on a contingent fee basis may, in order to collect his fees, prosecute an appeal despite his client's refusal to appeal the decision of the trial court.A practicing attorney, entered into a written agreement with the private respondent to appear as her counsel in a petition for probate of the holographic will. Under the will, a piece of real property at Sales Street, Quiapo, Manila, was bequeathed to private respondent. It was agreed that the attorneys contigent fee would be thirty-five per cent (35%) of the property that private respondent may receive upon the probate of the will.The payment of his fees is contingent and dependent upon the successful probate of the holographic will. Since the petition for probate was dismissed by the lower court, the contingency did not occur. Attorney Leviste is not entitled to his fee. - Leviste v. CA, G.R. No. L-29184 [1989]

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Is the right of a client to enter into a compromise agreement without the consent of his lawyer defeated by a contrary written contract ?It appears from the record that on July 31, 1921, the respondents by means of a written contract, retained the petitioner to represent them as their lawyer. The contract fixed the petitioner's fee at P200 in advance with an additional contigent fee of P1,300. It was also provided in the contract that respondent should not compromise the claim against the defendant in the case without express consent of his lawyer.

Through the sole effort of respondents the case was dismissed without notice to their counsel.

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Right of a client to compromise suitThe client has also an undoubted right to compromise a suit without the intervention of his lawyer.

Though there is a valid agreement for the payment to the attorney of a large proportion of the sum recovered in case of success this does not give the attorney such an interest in the cause of action that it prevents plaintiff from compromising the suit. Rustia v. The Judge of First Instance of Batangas, G.R. No. L-19695 November 17, 1922

We have recently held that a client has always the right to settle his cause of action and stop litigation at any stage of the proceeding, subject, however, to the right of the attorney to receive compensation for services rendered. - Aro v. The Hon. Naawa, G.R. No. L-24163 [1969]

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Applies only in civil cases

Rule 1.04 - A lawyer shall encourage his clients to avoid, end or settle a controversy if it will admit of a fair settlement.

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Limitation of clients right to compromise suitWhile We here reaffirm the rule that "the client has an undoubted right to compromise a suit without the intervention of his lawyer", We hold that when such compromise is entered into in fraud of the lawyer, with intent to deprive him of the fees justly due him, the compromise must be subject to the said fees, and that when it is evident that the said fraud is committed in confabulation with the adverse party who had knowledge of the lawyer's contingent interest or such interest appears of record and who would benefit under such compromise, the better practice is to settle the matter of the attorney's fees in the same proceeding, after hearing all the affected parties and without prejudice to the finality of the compromise in so far as it does not adversely affect the rights of the lawyer. - Aro v. The Hon. Naawa, G.R. No. L-24163 [1969]

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Quantum meruitThe principle of quantum meruit (as much as he deserves) may be a basis for determining the reasonable amount of attorneys fees. Quantum meruit is a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without paying for it. It is applicable even if there was a formal written contract for attorneys fees as long as the agreed fee was found by the court to be unconscionable. - Atty. Orocio v. Angulan et. al., G.R. No. 179892-93, January 30, 2009

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2 purposes of application Quantum meruitThe recovery of attorneys fees on this basis is permitted, as in this case, where there is no express agreement for the payment of attorneys fees. Basically, it is a legal mechanism which prevents an unscrupulous client from running away with the fruits of the legal services of counsel without paying for it. In the same vein, it avoids unjust enrichment on the part of the lawyer himself. - Pineda v. Atty. De Jesus, et. al. G.R. No. 155224 August 23, 2006

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When is Quantum meruit authorized(1) there is no express contract for payment of attorney's fees agreed upon between the lawyer and the client; (2) when although there is a formal contract for attorney's fees, the fees stipulated are found unconscionable or unreasonable by the court; and (3) when the contract for attorney's fee's is void due to purely formal defects of execution; (4) when the counsel, for justifiable cause, was not able to finish the case to its conclusion; (5) when lawyer and client disregard the contract for attorney's fees, - Rilloza, et. al. v. Eastern Telecommunications Phils., Inc., G.R. No. 104600 [1999]

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Factors for application of quantum meruitIn fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, factors such as the time spent, and extent of services rendered; novelty and difficulty of the questions involved; importance of the subject matter; skill demanded; probability of losing other employment as a result of acceptance of the proferred case; customary charges for similar services; amount involved in the controversy and the benefits resulting to the client; certainty of compensation; character of employment; and professional standing of the lawyer, may be considered. (Atty. Orocio v. Angulan et. al., G.R. No. 179892-93, January 30, 2009)

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The court shall fix the amountIn fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, the elements to be considered are generally

(1) the importance of the subject matter in controversy, (2) the extent of services rendered, and (3) the professional standing of the lawyer. A determination of these factors would indispensably require nothing less than a full-blown trial where private respondents can adduce evidence to establish the right to lawful attorney's fees and for petitioner to oppose or refute the same. The trial court has the principal task of fixing the amount of attorney's fees. Hence, the necessity of a hearing is beyond cavil. -Rilloza, et. al. v. Eastern Telecommunications Phils., Inc., G.R. No. 104600 [1999]

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Champertous contract "1. On all commission or attorneys fees that we shall receive from our clients by virtue of the collection that we shall be able to effect on their accounts, we shall divide fifty-fifty. Likewise you are entitled to commission, 50/50 from domestic, inheritance and commercial from our said clients or in any criminal cases where they are involved.

We hold that the said agreement is void because it was tantamount to malpractice which is "the practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers" Sec. 27, Rule 138, Rules of Court). Malpractice ordinarily refers to any malfeasance or dereliction of duty committed by a lawyer. Section 27 gives a special and technical meaning to the term "malpractice" (Act No. 2828, amending sec. 21 of Act No. 190). Tan Tek Beng v. David, A.C. No. 1261. December 29, 1983

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Agreement to pay all expenses of proceedings An agreement whereby an attorney agrees to pay expenses of proceedings to enforce the client's rights is champertous [JBP Holding Corp. v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public policy especially where, as in this case, the attorney has agreed to carry on the action at his own expense in consideration of some bargain to have part of the thing in dispute [See Sampliner v. Motion Pictures Patents Co., et al., 255 F. 242 (1918)]. The execution of these contracts violates the fiduciary relationship between the lawyer and his client, for which the former must incur administrative sanctions. - Atty. Orocio v. Angulan et. al., G.R. No. 179892-93, January 30, 2009

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Funding litigation[A]s long as litigation and access to the courts remain expensive, then anyone who has a right that stands in need of vindication should be able to obtain funding from anyone willing to offer it and on whatever terms it is offered.

- Neuberger, From Barretry, Maintenance and Champerty to Litigation Funding, Speech at Grays Inn, May 8, 2013.*

Pay the law firm not the handling lawyerWhen a client employs the services of a law firm, he does not employ the services of the lawyer who is assigned to personally handle the case. Rather, he employs the entire law firm. In the event that the counsel appearing for the client resigns, the firm is bound to provide a replacement.

- Rilloza, et. al. v. Eastern Telecommunications Phils., Inc., G.R. No. 104600 [1999] *

Retaining lienRule 138 Sec. 37. Attorney's liens. An attorney shall have a lien upon the funds, documents and papers of his client, which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements."

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Charging lien Rule 138 Section 37. xxx He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements."

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There must be a favorable judgmentA charging lien to be enforceable as security for the payment of attorney's fees requires as a condition sine qua non a judgment for money and execution in pursuance of such judgment secured in the main action by the attorney in favor of his client. A charging lien presupposes that the attorney has secured a favorable money judgment for his client. - Rilloza, et. al. v. Eastern Telecommunications Phils., Inc., G.R. No. 104600 [1999]

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The following are the circumstances to be considered in determining the compensation of an attorney1. the amount and character of the services rendered; 2. the labor, time, and trouble involved; 3. the nature and importance of the litigation or business in which the services were rendered; the responsibility imposed; 4. the amount of money or the value of the property affected by the controversy, or involved in the employment, 5. the skill and experience called for in the performance of the services; *

6. the professional character and social standing of the attorney; 7. the results secured; and 8. whether or not the fee is absolute or contingent, it being a recognized rule that an attorney may properly charge a much a larger fee when it is to be contingent that when it is not. 9. The financial ability of the defendant may also be considered not to enhance the amount above a reasonable compensation, but to determine whether or not he is able to pay a fair and just compensation for the services rendered, or as incident in ascertaining the importance and gravity of the interests involved in the litigation. *

Forum does not qualify payment of compensationWe have noted in the beginning that the services here were rendered in a case of an administrative nature. But that does not alter the application of the proper rule:

Professional services, to prepare and advocate just claims for compensation, are as legitimate as services rendered in court in arguing a cause to convince a court or jury that the claim presented or the defense set up against a claim presented by the other party ought to be allowed or rejected. Parties in such cases require advocates; and the legal profession must have a right to accept such employment and to receive compensation for their services. De Guzman v. Visayan Rapid Transport Co. Inc. G.R. No. 46396 September 30, 1939*

Written contract is not required to prove lawyer-client relationshipThe absence of a written contract will not preclude the finding that there was a professional relationship which merits attorney's fees for professional services rendered. Documentary formalism is not an essential element in the employment of an attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice and assistance of an attorney is sought and received in any matter pertinent to his profession. An acceptance of the relation is implied on the part of the attorney from his acting on behalf of his client in pursuance of a request from the latter. - Dee vs. Court of Appeals, G.R. No. 77439, August 24, 1989

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Options to enforce right to professional feesA lawyer may enforce his right to his fees by filing the necessary petition as an incident of the main action in which his services were rendered or in an independent suit against his client. The former is preferable to avoid multiplicity of suits. - Pineda v. Atty. De Jesus, et. al. G.R. No. 155224 August 23, 2006

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Only reason to file suitRule 20.4 of the Code of Professional Responsibility advises lawyers to avoid controversies with clients concerning their compensation and to resort to judicial action only to prevent imposition, injustice or fraud. Suits to collect fees should be avoided and should be filed only when circumstances force lawyers to resort to it. - Pineda v. Atty. De Jesus, et. al. G.R. No. 155224 August 23, 2006

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Two commonly accepted concepts of attorneys feesIn its ordinary concept, an attorneys fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his agreement with the client.In its extraordinary concept, an attorneys fee is an indemnity for damages ordered by the court to be paid by the losing party in a litigation. The basis of this is any of the cases provided by law where such award can be made, such as those authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. - Traders Royal Bank Employees Union-Independent v. NLRC G.R. No. 120592. March 14, 1997

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Award of (extraordinary) attorneys fee is discretionaryThe power of this Court to reduce or even delete the award of attorneys fees cannot be denied. Lawyers are officers of the Court and they participate in the fundamental function of administering justice. When they took their oath, they submitted themselves to the authority of the Court and subjected their professional fees to judicial control. Pineda v. Atty. De Jesus, et. al. G.R. No. 155224 August 23, 2006

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Contingent fee agreement does not violate Article 1491(5) of the NCCThe contract of services did not violate said provision of law. Article 1491 of the Civil Code, specifically paragraph 5 thereof, prohibits lawyers from acquiring by purchase even at a public or judicial auction, properties and rights which are the objects of litigation in which they may take part by virtue of their profession. The said prohibition, however, applies only if the sale or assignment of the property takes place during the pendency of the litigation involving the client's property. Hence, a contract between a lawyer and his client stipulating a contingent fee is not covered by said prohibition under Article 1491 (5) of the Civil Code because the payment of said fee is not made during the pendency of the litigation but only after judgment has been rendered in the case handled by the lawyer. In fact, under the 1988 Code of Professional Responsibility, a lawyer may have a lien over funds and property of his client and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements. - Fabillo and Tana v. IAC G.R. No. L-68838 [1991]

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Mere demand for delivery of the litigated property is not unethicalIn the instant case, there was no actual acquisition of the property in litigation since the respondent only made a written demand for its delivery which the complainant refused to comply. Mere demand for delivery of the litigated property does not cause the transfer of ownership, hence, not a prohibited transaction within the contemplation of Article 1491. - Ramos v. Atty. Ngaseo, A.C. No. 6210 [2004]

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Commission/referral fees prohibited By openly admitting he divided the Php70,000.00 to other individuals as commission/referral fees respondent violated Rule 9.02, Canon 9 of the Code of Professional Responsibility which provides that a lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law. - Lijauco v. Atty. Terrado, A.C. No. 6317 [2006]

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CANON 9 - A LAWYER SHALL NOT, DIRECTLY OR INDIRECTLY, ASSIST IN THE UNAUTHORIZED PRACTICE OF LAW.Rule 9.02 - A lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law, except: (a) Where there is a pre-existing agreement with a partner or associate that, upon the latter's death, money shall be paid over a reasonable period of time to his estate or to persons specified in the agreement; or (b) Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer; or (c) Where a lawyer or law firm includes non-lawyer employees in a retirement plan even if the plan is based in whole or in part, on a profit sharing agreement.

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Quality of legal service should not vary if rendered for freeIt is true that he is a court-appointed counsel. But we do say that as such counsel de oficio, he has as high a duty to the accused as one employed and paid by defendant himself. Because, as in the case of the latter, he must exercise his best efforts and professional ability in behalf of the person assigned to his care. His is to render effective assistance. The accused defendant expects of him due diligence, not mere perfunctory representation. We do not accept the paradox that responsibility is less where the defended party is poor. - In Re: Atty. Adriano, G.R. No. L-26868 [1969]

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Rule 14.04 - A lawyer who accepts the cause of a person unable to pay his professional fees shall observe the same standard of conduct governing his relations with paying clients.

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Case lawMr. Culpepper sent Mr. Cole a letter in which he confirmed that he would accept the representation on a contingent fee basis of one-third "of whatever additional property or money we can get for you.After negotiation between Mr. Culpepper and counsel for the estate of Mr. Cole's mother, Mr. Cole was offered property worth $21,600.03 over and above what he would have received under the terms of the decedent's will. Mr. Culpepper thought the compromise was reasonable and recommended to Mr. Cole that he accept the offer. However, Mr. Cole refused to settle his claim for that amount, believing he was entitled to a larger share of his mother's succession as a forced heir. When Mr. Culpepper refused to file suit in the matter, Mr. Cole terminated his representation.

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Pursuant to the parties' agreement, Mr. Culpepper is entitled to one-third "of whatever additional property or money" he obtained on behalf of Mr. Cole. It is undisputed that Mr. Cole recovered no additional property or money as a result of the litigation against his mother's estate. Because Mr. Cole obtained no recovery, it follows that Mr. Culpepper is not entitled to any contingent fee.Nonetheless, Mr. Culpepper urges us to find that his contingency should attach to the settlement offer he obtained on behalf of his client, even though his client refused to accept that offer. According to Mr. Culpepper, he did the work for which Mr. Cole retained him, and he is therefore entitled to one-third of the amount offered in settlement, notwithstanding Mr. Cole's rejection of the settlement offer.

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DecisionTo allow Mr. Culpepper to recover a contingent fee under these circumstances would penalize Mr. Cole for exercising his right to reject the settlement. We find no statutory or jurisprudential support for such a proposition. Indeed, this court has rejected any interpretation of the Rules of Professional Conduct which would place restrictions on the client's fundamental right to control the case. In summary, we find that Mr. Culpepper did not obtain any recovery on behalf of Mr. Cole. In the absence of a recovery, it follows that Mr. Culpepper cannot collect a contingent fee for his services. - Culpepper v. Cole 929 So.2d 1224 [2006]

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Acceptance fee is not necessary to establish lawyer-client relationshipA lawyer-client relationship was established from the very first moment complainant asked respondent for legal advice regarding the formers business. To constitute professional employment, it is not essential that the client employed the attorney professionally on any previous occasion. It is not necessary that any retainer be paid, promised, or charged; neither is it material that the attorney consulted did not afterward handle the case for which his service had been sought. - Burbe v. Atty. Magulta AC No. 99-634. June 10, 2002

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Money down first policy is unethicalThe impropriety lies in the fact that she suggested that complainant borrow money from Domingo Natavio for the payment thereof. This act impresses upon the Court that respondent would do nothing to the cause of complainants mother-in-law unless payment of the acceptance fee is made. Her duty to render legal services to her client with competence and diligence should not depend on the payment of acceptance fee. Ceniza v. Atty. Rubia, A.C. No. 6166, October 2, 2009

I, do solemnly swear that xxx I will delay no man for money xxx.

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Establishment of lawyer-client relationship not influenced by personal affiliationRespondent takes further refuge in the intimate and close relationship existing between himself and the complainants family on the basis of which his legal services were purely gratuitous or simply an act of a friend for a friend with no consideration involved. Unfortunately, his efforts to redeem the foreclosed property, as already stated, did not produce the desired result because the mortgagee would not budge anymore and would not accept the sum offered.Thus, the respondent concluded that there was, strictly speaking, no attorney-client [relationship] existing between them. Rather, right from the start[,] everything was sort of personal, he added. xxx This contention has no merit. - Junio v. Atty. Grupo, A.C. No. 5020. December 18, 2001

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Right to a lien versus duty to accountLawyers who convert the funds entrusted to them are in gross violation of professional ethics and are guilty of betrayal of public confidence in the legal profession. It may be true that they have a lien upon the clients funds, documents and other papers that have lawfully come into their possession; that they may retain them until their lawful fees and disbursements have been paid; and that they may apply such funds to the satisfaction of such fees and disbursements. However, these considerations do not relieve them of their duty to promptly account for the moneys they received. Their failure to do so constitutes professional misconduct. In any event, they must still exert all effort to protect their clients interest within the bounds of law. Burbe v. Atty. Magulta AC No. 99-634. June 10, 2002

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Duty of accountingWhen a lawyer receives money from a client for a particular purpose involving the client-attorney relationship, he is bound to render an accounting to the client showing that the money was spent for that particular purpose. If the lawyer does not use the money for the intended purpose, he must immediately return the money to his client. - Navarro & Presbitero, A.C. No. 9872, January 28, 2014

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Change of attorneySection 26 of Rule 138 of the Revised Rules of Court provides:"Sec. 26. Change of attorneys -- An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party.

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Withdrawal of counselA lawyer may retire at any time from any action or special proceeding with the written consent of his client filed in court and copy thereof served upon the adverse party. Should the client refuse to give his consent, the lawyer must file an application with the court. The court, on notice to the client and adverse party, shall determine whether he ought to be allowed to retire. The application for withdrawal must be based on a good cause. - Orcino v. Atty. Gaspar, A.C. No. 3773. September 24, 1997

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Grounds for withdrawalRespondent's withdrawal was made on the ground that "there no longer exist[ed] the xxx confidence" between them and that there had been "serious diffferences between them relating to the manner of private prosecution. - Orcino v. Atty. Gaspar, A.C. No. 3773. September 24, 1997

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Court approval required before counsel can withdrawAssuming, nevertheless, that respondent was justified in terminating his services, he, however, cannot just do so and leave complainant in the cold unprotected. The lawyer has no right to presume that his petition for withdrawal will be granted by the court. Until his withdrawal shall have been approved, the lawyer remains counsel of record who is expected by his client as well as by the court to do what the interests of his client require. He must still appear on the date of hearing for the attorney-client relation does not terminate formally until there is a withdrawal of record. Orcino v. Atty. Gaspar, A.C. No. 3773. September 24, 1997

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What is a contingency contract The client and his lawyer may enter into a written contract whereby the latter would be paid attorneys fees only if the suit or litigation ends favorably to the client. This is called a contingency fee contract. The amount of attorneys fees in this contract may be on a percentage basis, and a much higher compensation is allowed in consideration of the risk that the lawyer may get nothing if the suit fails.In the case at bar, the non-EPIRA separated members and petitioner voluntarily entered into a contingency fee contract whereby petitioner did not receive any acceptance fee or appearance/meeting fee. - Atty. Orocio v. Angulan et. al., G.R. No. 179892-93 [2009]

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Why contingency fee is allowedContingent fee contracts are permitted in this jurisdiction because they redound to the benefit of the poor client and the lawyer especially in cases where the client has meritorious cause of action, but no means with which to pay for legal services unless he can, with the sanction of law, make a contract for a contingent fee to be paid out of the proceeds of litigation. Oftentimes, the contingent fee arrangement is the only means by which the poor clients can have their rights vindicated and upheld.- Atty. Orocio v. Angulan et. al., G.R. No. 179892-93 [2009]

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Limitations of a contingency agreementHowever, in cases where contingent fees are sanctioned by law, the same should be reasonable under all the circumstances of the case, and should always be subject to the supervision of a court, as to its reasonableness, such that under Canon 20 of the Code of Professional Responsibility, a lawyer is tasked to charge only fair and reasonable fees. - Atty. Orocio v. Angulan et. al., G.R. No. 179892-93 [2009]

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Written contract of legal fees is ordinarily controllingA stipulation on a lawyers compensation in a written contract for professional services ordinarily controls the amount of fees that the contracting lawyer may be allowed, unless the court finds such stipulated amount to be unreasonable or unconscionable. If the stipulated amount for attorneys fees is excessive, the contract may be disregarded even if the client expressed their conformity thereto. Attorneys fees are unconscionable if they affront ones sense of justice, decency or reasonableness, or if they are so disproportionate to the value of the services rendered. In such a case, courts are empowered to reduce the attorneys fee or fix a reasonable amount thereof taking into consideration the surrounding circumstances and the established parameters. - Atty. Orocio v. Angulan et. al., G.R. No. 179892-93 [2009]

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When is an attorneys fees unconscionable?Attorneys fees are unconscionable if they affront ones sense of justice, decency or reasonableness, or if they are so disproportionate to the value of the services rendered. In such a case, courts are empowered to reduce the attorneys fee or fix a reasonable amount thereof taking into consideration the surrounding circumstances and the established parameters. - Atty. Orocio v. Angulan et. al., G.R. No. 179892-93 [2009]

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Lawyers compensation for professional services rendered is subject to the supervision of the courtUnder Section 24, Rule 138 of the Rules of Court, a written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. . It follows that a lawyers compensation for professional services rendered is subject to the supervision of the court, not just to guarantee that the fees he charges and receives remain reasonable and commensurate with the services rendered, but also to maintain the dignity and integrity of the legal profession to which he belongs. Upon taking his attorneys oath as an officer of the court, a lawyer submits himself to the authority of the courts to regulate his right to charge professional fees. - Atty. Orocio v. Angulan et. al., G.R. No. 179892-93 [2009]

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Thank you for your attention!!*

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