A Tenth Of An Hour

An opinion issued today by the New Jersey Appellate Division

In this appeal from summary judgment in a breach of contract action, defendants argue plaintiff law firm violated rules of professional conduct by failing to disclose in its retainer agreement the unit of incremental billing – one tenth of an hour – it would utilize during the course of representation.  Plaintiff and defendants entered two retainer agreements, both of which disclosed a required initial deposit, the hourly rates of each attorney at the firm, and which party was responsible for certain administrative costs. 

Plaintiff represented defendants for more than two years pursuant to the parties' retainer agreements, sending monthly and bimonthly invoices throughout the duration demonstrating work billed in increments of one-tenth of an hour.  When defendants refused to remain current with outstanding fees, plaintiff ceased representation and instituted the breach of contract action. The trial court granted summary judgment.  Defendants urged reversal on appeal.

The court affirmed summary judgment as properly granted, and held the retainer agreement was lawful and ethical where, among other things, it sufficiently apprised the clients of the express terms of the agreement in accordance with RPC 1.5(b), and the parties' course of conduct for two years demonstrated assent to those terms.

The background

When AMG commenced representing defendants in the Sollecito matter, discovery had already commenced. AMG was the seventh law firm to represent defendants in the Sollecito matter, in which there were thirty different parties, sixteen different law firms, and tens of thousands of pages of discovery. The issue before us involves a fee dispute for AMG's legal work in the Sollecito matter.

The parties operated under a retainer agreement for two years; a second retainer addressed another matter involving a fee dispute with a former firm

Ultimately, AMG ended its legal representation of defendants in the Sollecito and W&M matters, substituting out of both cases in July 2020.

In this dispute

Defendants argue a retainer agreement must explain which increment of time--for example, one-tenth of an hour--the law firm will be utilizing despite hourly rates and initial deposits being otherwise clearly defined. The trial court noted a dearth of case law, statutes, and comments to the rule addressing this issue and ruled AMG was entitled to summary judgment for breach of contract. We agree.

The agreement passed ethical muster

Having reviewed the express terms of both retainer agreements entered into between AMG and defendants, we find AMG's agreements with defendants comport with RPC 1.5, fully apprising defendants of their fee, and affirm for substantially the same reasons as the trial court. Further, based upon the parties' course of dealing, where defendants availed themselves of AMG's legal services for more than two years without objecting to any invoices or raising the incremental billing issue, defendants' claim suggests an improper motive. Defendants' assertion they were unaware billing was occurring in increments of one-tenth of an hour is not supported by the record. We add only the following observation regarding defendants' claim a retainer agreement must include the unit of incremental billing by which a client will be charged.

Based upon our review of the relevant rules, commentary thereto, and case law, there is no rule as rigorous as the one defendants urge us to adopt; there is no specific pronouncement requiring a retainer agreement to explicitly set forth the unit of incremental billing to be used. Defendants urge us to require retainer agreements include disclosure of incremental billing units, although unsupported in our current jurisprudence. While the request is perhaps an issue for one of our Supreme Court's practice committees, it cannot provide a basis for reversal of summary judgment in this case. To pronounce otherwise would usurp our Supreme Court's exclusive rulemaking process. 

(Mike Frisch)