ATTORNEY’S FEES

FACTORS IN DETERMINING FEES

• 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:chanroblesvirtuallawlibrary
• (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.
 FACTORS IN DETERMINING FEES
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:
qthe time spent and the extent of the service rendered or required;
qthe novelty and difficulty of the questions involved;
qThe importance of the subject matter;
qThe skill demanded;
qThe probability of losing other employment as a result of acceptance of the
proffered case;
qThe customary charges for similar services and the schedule of fees of the IBP
chapter to which he belongs;
qThe amount involved in the controversy and the benefits resulting to the client from
the service;
qThe contingency or certainty of compensation;
qThe character of the employment, whether occasional or established; and
qThe professional standing of the lawyer.
 FACTORS DETERMINING FEES

Section 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 to the importance of the subject matter of the controversy, the
extent of the services rendered, and 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.
ACCEPTANCE FEE ARRANGEMENTS
• Tan vs. Atty. Robiso, A.C. No. 6383. Mar
31, 20091

As affirmed by the court:

The IBP Board of Governors recommended that respondent be suspended from the practice of law
for one year. However, the Court notes that, in practice, acceptance fees of lawyers are generally
non-refundable and the fact that, in the present case, respondent is willing to make good the
amount of the bouncing check. Thus, we deem that one month suspension from the practice of law
and the restitution of P85,000.00 to complainant would be sufficient in this case.
IGNACIO V.ALVIAR

• Be that as it may, the Court had not shied from ordering a return of acceptance fees in
cases wherein the lawyer had been negligent in the handling of his client's
case. Thus, in Carino v. Atty. De Los Reyes, the respondent lawyer who failed to file a
complaint-affidavit before the prosecutor's office, returned the PhP10,000 acceptance
fee paid to him and was admonished to be more careful in the performance of his duty
to his clients. Likewise, in Voluntad-Ramirez v. Baustista, the respondent lawyer was
ordered to return the PhP14,000 acceptance fee because he did nothing to advance
his client's cause during the six-month period that he was engaged as counsel.
CONTINGENCY FEE ARRANGEMENTS
• Cortez vs. Atty. Cortes. A.C. No. 9119, Mar
12, 2018

• A contingent fee arrangement is valid in this jurisdiction and is generally

recognized as valid and binding but must be laid down in an express
contract. The amount of contingent fee agreed upon by the parties is subject to the
stipulation that counsel will be paid for his legal services only if the suit or litigation
prospers. A much higher compensation is allowed as contingent fee in consideration of
the risk that the lawyer may get nothing if the suit fails. Contracts of this nature are
permitted 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 the litigation. Oftentimes, the
contingent fee arrangement is the only means by which the poor and helpless can
seek redress for injuries sustained and have their rights vindicated.
FORTUNATO HALILI VS. COURT OF
INDUSTRIAL RELATIONS, ET. AL. G.R. NO.
L-24864 APRIL 30, L985
• Aalgamated Laborers' Association vs. Court of Industrial Relations (L-23467, 22 SCRA
1267 [March 27, 1968]), contingent fee contract specifying the percentage of recovery
an attorney is to receive in a suit 'should be reasonable under all the circumstances of
the case, including the risk and uncertainty of the compensation, but should always be
subject to the supervision of a court, as to its reasonableness.
QUESTION.
• A filed an action before the RTC for sum of money and/or voiding of contract of sale of
homestead after the buyer failed to pay the balance of the purchase price. A engaged
in the services of B, a Lawyer. Under their agreement they agreed to pay B P2,000 as
contingency fee. Later, they novated the agreement to equivalent of ½ portion of the
land subject of the case. They won. B caused the subdivision of the subject lot into two
equal portions, based on area, and selected the more valuable and productive half for
himself; and assigned the other half to A. A filed a case against B and prayed for the
court to fix the attorney’s fees on a quantum meruit basis. A argued that the contingent
fee is excessive and unreasonable. Is A correct?
ANSWER

Yes, in the case of Cadavedo v. Lacaya, the supreme court held that contingent fee
agreement between the spouses Cadavedo and Atty. Lacaya,awarding the latter one-half of
the subject lot, is champertous. Granting arguendo that the spouses Cadavedo and Atty.
Lacaya indeed entered into an oral contingent fee agreement securing to the latter one-half
of the subject lot, the agreement is nevertheless void. In their account, the respondents insist
that Atty. Lacaya agreed to represent the spouses Cadavedo in Civil Case No. 1721 and
assumed the litigation expenses, without providing for reimbursement, in exchange for a
contingency fee consisting of one-half of the subject lot. This agreement is champertous and
is contrary to public policy.
CHAMPERTOUS CONTRACTS
CADAVEDO V. LACAYA
In this jurisdiction, we maintain the rules on champerty, as adopted from American decisions,
for public policy considerations.As matters currently stand, any agreement by a lawyer to
"conduct the litigation in his own account, to pay the expenses thereof or to save his
client therefrom and to receive as his fee a portion of the proceeds of the judgment is
obnoxious to the law."The rule of the profession that forbids a lawyer from contracting with
his client for part of the thing in litigation in exchange for conducting the case at the lawyer’s
expense is designed to prevent the lawyer from acquiring an interest between him and
his client. To permit these arrangements is to enable the lawyer to "acquire additional
stake in the outcome of the action which might lead him to consider his own recovery
rather than that of his client or to accept a settlement which might take care of his
interest in the verdict to the sacrifice of that of his client in violation of his duty of
undivided fidelity to his client’s cause."
CHAMPERTOUS CONTRACTS
A champertous contract is defined as a contract between a stranger and a
party to a lawsuit, whereby the stranger pursues the party's claim in
consideration of receiving part or any of the proceeds recovered under the
judgment. It is a bargain by a stranger with a party to a suit, by which such third
person undertakes to carry on the litigation at his own cost and risk, in
consideration of receiving, if successful, a part of the proceeds or subject
sought to be recovered. In the legal profession, an agreement whereby the
attorney agrees to pay expenses of proceedings to enforce the client's rights is
champertous. Such agreements are against public policy. The execution of this
type of contract violates the fiduciary relationship between the lawyer and
his client, for which the former must incur administrative
sanction.Specifically, champertous contracts are contrary to Rule 16.04 of the
Code of Professional Responsibility, which states that lawyers shall not lend
money to a client, except when in the interest of justice, they have to advance
necessary expenses in a legal matter they are handling for the client. Canillo v.
Angeles 2018
Q2.

• A, a lawyer represented B in an ejectment case, judgment was in favor of

B. A wanted to secure the payment of his attorney’s fees. How can A insure
payment of his fees? Does A have the right to retain the title of B subject
of the litigation?
A

• Yes, The right of a lawyer to insure the payment of his professional fee is
either to retain the funds, documents, and papers of his client which may
have lawfully come into his possession, or to enforce it upon any judgment
for the payment of money he may secure in favor of his client. The
retaining lien is dependent upon possession and does not attach to anything
not in attorney’s hands. The lien exists only so long as the attorney retains
possession of the subject matter and expires when the possession ends.
(Rustia v. Abeto.)
QUESTION

Assuming A without a statement of claim retained the funds, documents, and

papers that came in his possession during the pendency of the case and
continued to do so despite demand saying that he will not return the same
until B pays him his legal fees. May the court cite A in contempt despite A’s
right to retain the funds, documents, and papers of his client?
ANS.

• Yes, under Rule 138, section 25 of the rules of court, 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.
LIEN

• 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.
DIFFERENCE OF RETAINING VS.
CHARGING LIEN:
R E TA I N I N G L I E N
• .The retaining lien is the right of
the attorney to retain the funds,
documents, and papers of his
client which have lawfully come
into his possession until his lawful
fees and disbursements have
been paid and to apply such
funds to the satisfaction thereof.
CHARGING LIEN
• The charging lien is the right
which the attorney has upon all
judgments for the payment of
money, and executions issued in
pursuance of said judgments,
which he has secured in a
litigation of his client (Section 33,
Rule 127; Rustia v. Abeto, 72
Phil. 133.) .
FEES AND CONTROVERSIES WITH
CLIENTS
Alex B. Cueto vs. Atty. Jose B. Jimenez, Jr., A.C. No. 5798, Jan 20, 2005

Canon 20, Rule 20.4 of the Code of Professional Responsibility mandates that "[a] lawyer shall avoid controversies
with clients concerning his compensation and shall resort to judicial action only to prevent imposition,
injustice or fraud." Likewise, in Canon 14 of the Canons of Professional Ethics it states that, "[c]ontroversies with
clients concerning compensation are to be avoided by the lawyer so far as shall be compatible with his self-respect
and with his right to receive reasonable recompense for his service; and lawsuits with the clients should be resorted to
only to prevent injustice, imposition or fraud."
There was clearly no imposition, injustice or fraud obtaining in this case to justify the legal action taken by respondent.
As borne out by the records, complainant Cueto had already paid more than half of respondent’s fee. To resort to a
suit to recover the balance reveals a certain kind of shameful conduct and inconsiderate behavior that clearly
undermines the tenet embodied in Canon 15 that "[A] lawyer should observe candor, fairness and loyalty in all his
dealings and transactions with his client." And what can we say about the failure of respondent’s son Jose III to pay his
own obligation to complainant Cueto? It in all probability explains why Cueto ran short of funds. Respondent
therefore should have been more tolerant of the delay incurred by complainant Cueto.
ATTORNEY’S FEE; ORDINARY AND
EXTRAORDINARY CONCEPT
O R D I N A RY E X T R AO R D I N A RY

• In its ordinary concept, attorney's fee • attorney's fee is awarded by the court to
refers to the reasonable compensation the successful litigant to be paid by the
paid to a lawyer by his client for legal losing party as indemnity for damages.
services rendered.
QUESTION

Is the recovery of attorney's fees and

expenses of litigation, other than judicial
costs mandatory?
 CONCEPT OF ATTORNEY’S FEES:
ORDINARY VS. EXTRAORDINARY- ARTICLE
2208. NEW CIVIL CODE
Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
CONT.

(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;
(8) In actions for indemnity under workmen's compensation and employer's
liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's
fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
LABOR CODE ON ATTY’S FEES

.
Article 111. Attorney’s fees.
In cases of unlawful withholding of wages, the culpable party may be
assessed attorney’s fees equivalent to ten percent of the amount of wages
recovered.
It shall be unlawful for any person to demand or accept, in any judicial or
administrative proceedings for the recovery of wages, attorney’s fees which
exceed ten percent of the amount of wages recovered.
Q.

May attorney’s fees be recovered in cases where the employee

was forced to file a suit against employer for work related ?
A.

• Yes.
The award of attorney's fees in labor cases, however, are not limited to
those expressly covered by Article Ill of the Labor Code which states that
attorney's fees may be awarded in cases of unlawful withholding of wages.
The Court has repeatedly held that the award of attorney's fees is
legally and morally Justifiable, not only in actions for recovery of
wages, but also where an employee was forced to litigate and thus
incur expenses to protect his rights and interest.
DIVISION WITH A NON-LAWYER

• Rule 9.02 - A lawyer shall not divide or stipulate to divide a fee for
legal services with persons not licensed to practice law.
GENERAL RULE

No division of fees for legal services is proper, except with another lawyer, based upon
a division of service or responsibility.' The union president is not the attorney for the
laborers. He may seek compensation only as such president. An agreement whereby a
union president is allowed to share in attorney's fees is immoral. Such a contract we
emphatically reject. It cannot be justified.
Amalgamated Laborers' Association vs. Court of Industrial Relations (L-23467, 22 SCRA
1267 [March 27, 1968])
EXCEPTION
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;
(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.
HALILI V. CIR

• In the same motion, Mr. Capuno clarifies that with regard to attorneys' fees, Atty. Pineda
made the Union officers believe that he would be the one to pay the fees of Attys.
Espinas and Lopez for which reason, the 35% increased fees was approved by the
Union's board in good faith. The Union likewise confirms that Atty. Pineda came into
the picture only when he was assigned by Atty. Espinas in, 1965 to execute the CIR
decision which, thru Atty. Espinas handling, was upheld by this Court in L-24864 in
1968. The Union officers were aware that Atty. Espinas was the principal counsel
even after Atty. Pineda's assignment. They also knew of the original contract for 20%
attorney's fees which was increased to 35% by Atty. Pineda upon the arrangement that with
the increase, he would answer for the payment of Attys. Espinas and Lopez' fees and for
necessary representation expenses (p. 450, L-24864 rec.).
CLIENT REFERRAL FEE TO NON-
LAWYERS: Q

A, a lawyer undertook pay 10% commission of the attorney's fees he would receive in
representing CB whom was referred to him by B, an engineer in an action for partition of
the estate of the Y Their agreement was reflected in a letter dated August 11, 1995.
Did A violated Rule 9.02 of the CPR?
A

Yes. A, violated Rule 9.02 Canon 9 of the Code which prohibits a lawyer
from dividing or stipulating to divide a fee for legal services with
persons not licensed to practice law.
AGREEMENT TO SHARE AF TO A
LAYPERSON IS VOID:VILLATUYA VS. ATTY.
TABALINGCOS, A.C. NO. 6622, JULY 10,
2012

In Tan Tek Beng v. David that an agreement between a lawyer and a layperson to share
the fees collected from clients secured by the layperson is null and void, and that the
lawyer involved may be disciplined for unethical conduct.
PRESERVATION
OF CLIENT’S
CONFIDENCES
PROHIBITED DISCLOSURE

• Rule 15.02.- A lawyer shall be bound by the rule on privilege

communication in respect of matters disclosed to him by a prospective
client.
• CANON 17 - A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT
AND HE SHALL BE MINDFUL OF THE TRUST AND CONFIDENCE REPOSED
IN HIM.
• Canon 21 A LAWYER SHALL PRESERVE THE CONFIDENCE AND SECRETS
OF HIS CLIENT EVEN AFTER THE ATTORNEY-CLIENT RELATION IS
TERMINATED.
DISQUALIFICATION BY
REASON OF PRIVILEGED
COMMUNICATION
• SEC. 24. Disqualification by reason of privileged communication. — The
following persons cannot testify as to matters learned in confidence in the
following cases:chanrob1es virtual 1aw library
(b) An attorney cannot, without the consent of his client, be examined as to
any communication made by the client to him, or his advice given thereon
in the course of, or with a view to, professional employment nor can an
attorney’s secretary, stenographer, or clerk be examined, without the
consent of the client and his employer, concerning any fact the knowledge
of which has been acquired in such capacity;
Q

• A filed an administrative complaint against B, a lawyer

seeking his disbarment.The complainant alleged that
respondent maliciously instituted a criminal case for
falsification of public document against her, a former
client, based on confidential information gained from
their attorney-client relationship. Will the case prosper?
 A
No, in Mercado v. atty. Vitriollo 2005, the SC cited Dean Wigmore who then cited
the factors essential to establish the existence of the privilege, viz:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser
in his capacity as such, (3) the communications relating to that purpose, (4)
made in confidence (5) by the client, (6) are at his instance permanently
protected (7) from disclosure by himself or by the legal advisor, (8) except the
protection be waived. In this case, A contends that B violated the rule on
privileged communication when he instituted a criminal action against her for
falsification of public documents because the criminal complaint disclosed facts
relating to the civil case for annulment then handled by B. A did not even specify
the alleged communication in confidence disclosed by B. All her claims were
couched in general terms and lacked specificity.
Q.
Atty. A is B’s counsel. He turned over to Police petitioner’s .45 caliber Mark IV and
wrote a letter addressed to P/the station Commander of PNP Narrating that B when
just withdrew and on his way out of the bank, H, deceased continued his attack and
grabbed his gun. After a brief struggle, B was forced to shoot the deceased in the
defense of his person and money. And that B, his client will submit a formal statement
during the proper preliminary investigation, if needed.For all intense & purposes, this
letter shall serve as a voluntary surrender, without admission of guilt on the part of
my client.During the trial the prosecution filed a motion to require Atty. A to testify in
the witness stand who incidentally refused arguing that the subject of the testimony
squarely falls within the scope of "privileged communication“ The court denied the
motion. The prosecution filed a certiorari on the ground of grave abuse of discretion.
Did the court committed GAD?
 A
No. Aside from covering a subject which squarely falls within the scope of
"privileged communication", it would, more importantly, be tantamount to
converting the admission into a confession.

It can not be denied that the contents of Exhibit LL, particularly with regard
to the details of the shooting communicated by petitioner to Atty. Valmonte,
is privileged because it is connected with the business for which petitioner
retained the services of the latter. More specifically, said communication was
relayed by petitioner to Atty. Valmonte in order to seek his professional
advice or assistance in relation to the subject matter of the employment, or
to explain something in connection with it, so as to enable him to better
advice his client or manage the litigation. Sanvicente v. People 2002.
CLIENT IDENTITY
Regala vs. Sandiganbayan, G.R. No. 105938, Sep 20, 1996
As a matter of public policy, a client's identity should not be shrouded in mystery Under
this premise, the general rule in our jurisdiction as well as in the United States is that a
lawyer may not invoke the privilege and refuse to divulge the name or identity of this
client. The reasons advanced for the general rule are well established.
First, the court has a right to know that the client whose privileged information is sought
to be protected is flesh and blood.
Second, the privilege begins to exist only after the attorney-client relationship has been
established. The attorney-client privilege does not attach until there is a client.
Third, the privilege generally pertains to the subject matter of the relationship.
Finally, due process considerations require that the opposing party should, as a general
rule, know his adversary. "A party suing or sued is entitled to know who his opponent
is." Stj.He cannot be obliged to grope in the dark against unknown forces.
EXCEPTION
Notwithstanding these considerations, the general rule is however qualified by some
important exceptions.
ü Client identity is privileged where a strong probability exists that revealing the client's
name would implicate that client in the very activity for which he sought the lawyer's advice.
ü Where disclosure would open the client to civil liability; his identity is privileged.
ü Where the government's lawyers have no case against an attorney's client unless, by
revealing the client's name, the said name would furnish the only link that would form the
chain of testimony necessary to convict an individual of a crime, the client's name is
privileged.
ü Relevant to the subject matter of the legal problem on which client seeks legal assistance.
(present in this case)
ü Nature of atty-client relationship has been previously disclosed and it is the identity which is
intended to be confidential.
REVISED PENAL CODE. ART. 209.
BETRAYAL OF TRUST BY AN ATTORNEY OR
SOLICITOR.
Art. 209. Betrayal of trust by an attorney or solicitor. — Revelation of secrets. — In
addition to the proper administrative action, the penalty of prision correccional in its
minimum period, or a fine ranging from 200 to 1,000 pesos, or both, shall be imposed
upon any attorney-at-law or solicitor ( procurador judicial) who, by any malicious
breach of professional duty or of inexcusable negligence or ignorance, shall prejudice
his client, or reveal any of the secrets of the latter learned by him in his professional
capacity.
The same penalty shall be imposed upon an attorney-at-law or solicitor
(procurador judicial) who, having undertaken the defense of a client or having
received confidential information from said client in a case, shall undertake the
defense of the opposing party in the same case, without the consent of his first client.
DISCLOSURE WHEN ALLOWED-

üFurtherance of a crime or fraud

üClaimants through same deceased client
üBreach of duty by lawyer or client
ü Document attested by the lawyer
üJoint Clients
PRIVILEGE IN JOINT REP.
The Privilege in Joint Representations
The attorney-client privilege exists between a lawyer and each client in a joint engagement.
Persons outside the joint representation may obtain privileged communications only if all joint
clients in the engagement waive the privilege.
Exceptions to the Privilege in Joint Representations

1. one joint client may waive the privilege as to its own communications with a joint attorney,
provided those communications concern only the waiving client. In other words, a client may
only waive the privilege as to its own communications about itself, not as to any communications
of other clients or about other clients.
2. “adverse-litigation exception,” all communications made in the course of the joint
representation are discoverable when former joint clients sue one another. This exception also
applies to litigation between one of the joint clients and the attorney who represented all the
joint clients.
HOW TO AVOID ATTORNEY-CLIENT
PRIVILEGE PROBLEMS IN JOINT
REPRESENTATIONS.
First, a lawyer being engaged by multiple clients should tell each client that information
learned by the lawyer from any source will be disclosed to all clients in the representation
equally.
Second, the joint attorney should also state that information received from one client will
be disclosed to the other clients in the engagement.
Third, it would be appropriate to warn each client that communications between and
among the clients and the lawyer during the engagement may be disclosed in litigation
between or among the clients and/or the lawyer.
Fourth, the lawyer should reserve the right to withdraw from the representation if the
lawyer concludes that a conflict of interest exists between or among the clients and/or the
lawyer, and watch carefully throughout the engagement for conflicts.