By Victoria V.

Loanzon
Attorney’s fees normally refer to
the compensation for legal
services performed by an attorney
[an individual lawyer or for a client,
in or out of court.
At times, a professional fee of a
lawyer or law firm is denominated
as the honorarium received for
services rendered.
Two concepts of Attorney’s Fees
Attorney's fee is understood both
in its ordinary and extraordinary
concept.
In its ordinary concept, attorney's
fee refers to the reasonable
compensation paid to a lawyer by
his client for legal services
rendered.
While in its extraordinary concept,
attorney's fee is awarded by the
court to the successful litigant to
be paid by the losing party as
indemnity for damages.
An award of attorney’s fees under
Article 2208 demands factual,
legal, and equitable justification to
avoid speculation and conjecture
surrounding the grant thereof.
Basis of Payment: A lawyer’s
entitlement to professional fees is
premised on his engagement
contract with the client. The
lawyer is entitled to be
compensated for legal services
performed at the instance of the
client.
Attorney fees may include, among
others, the following items:
¨ Acceptance fee
¨ Initial consultation meeting fees
¨ Subsequent Consultation
¨ Contingency fees
¨ Monthly retainer fees
¨ Flat fees for specific engagement
¨ Standard hourly rates
¨ Costs and expenses
¨ Referral fees where an expert
witness is required
Attorney fees normally cover the
services provided by lawyers to
clients, in the form of advice,
research, resources, time, and
government fees paid in relation to
the referral.
In a number of cases, the fees are
usually specified in the engagement
contract between the lawyer and
his client. The client signifies
conformity to the terms of the
engagement by signing the same.
Unfortunately, in the Philippines
attorney’s fees are not standardized,
and can range from one firm to
another. Sometimes, the professional
fees are determined by the reputation
of the law firm, the education level of
the handling lawyers and experience
of the attorney dealing with the case,
the difficulty of the matter in issue,
and other aspects of the service.
Additional fees for various services
and types of agreements cover costs
and expenses for the referral.
1. Attorney’s Fee and Acceptance
Fee, distinguished -
An attorney's fee and an
acceptance fee are different from
each other because the former
depends on the nature and extent
of the legal services rendered,
while the other does not.
The acceptance fee is the fee
charged by the lawyer for merely
accepting the case. The rationale
behind this is, once the lawyer
agrees to act on behalf of a client,
he generally loses the opportunity to
handle cases for the opposing party.
The opportunity cost of mere
acceptance is thus indemnified by
the payment of acceptance fee.
However, since acceptance fee
compensates the lawyer only for lost
opportunity, the same is not
measured by the nature and extent
of the legal services rendered.
Thus, a lawyer’s acceptance of a
case would mean that he is
forgoing prospective work for the
other party.
The acceptance fee is normally
applied in litigation, and coupled
with a per stage or per activity
type of billing, where the lawyer
divides his professional fees
depending on the stage of the
proceedings.
The award of attorney’s fees is an
exception rather than the general
rule; thus, there must be
compelling legal reason to bring
the case within the exceptions
provided under Article 2208 of the
Civil Code to justify the award.
(cited in EUGENIO E. CORTEZ v.
ATTY. HERNANDO P. CORTES,
Tijam, J., A.C. No. 9119, March 12,
2018)
Due to the special nature of the
award of attorney’s fees, a rigid
standard is imposed on the courts
before these fees could be granted.
Hence, it is imperative that the
courts clearly and distinctly set
forth in their decisions the basis for
the award thereof.
It is not enough that the courts
merely state the amount of the
grant in the dispositive portion of
their decisions.
Article 111 of the Labor Code
deals with the extraordinary
concept of attorneys fees. It
regulates the amount recoverable
as attorney's fees in the nature of
damages sustained by and
awarded to the prevailing party.
It may not be used as the standard
in fixing the amount payable to the
lawyer by his client for the legal
services he rendered. The Court
may in its discretion adjust the
prevailing rate of 10% as provided
under the Labor Code.
Circumstances may warrant a
higher attorney’s fees.
2. Initial Consultation Fee
The initial consultation fee is what a
person can expect the lawyer will
charge for an initial meeting which
normally includes a disclosure of the
nature of the referral and a preliminary
assessment of the same.
This may involve discussion of possible
legal options. Some lawyers may bill on
an hourly basis which rate may be
reduced during the initial consultation.
The standard hourly rate may then be
imposed if the person agrees to the
engagement of the legal services of the
lawyer or the firm.
3. Hourly Rate Charges
In law offices, the hourly rate will
be charged by each of the
participating lawyers in the team.
The rates differ based on the rank
of lawyer in the law firm.
Under a time-based arrangement,
the client is billed at the end of
every billing cycle.
This billing cycle may fall on those
dates when a significant milestone is
achieved in a referral.
The hourly rate bill includes the time
in conducting research, answering
client calls, consultations, meetings,
attendance in hearing and follow-up
work. In some cases, the minimum
rate charged is in block of six (6)
minutes.
4. Monthly Retainer Fee
A monthly retainer fee is a fixed
amount for any legal work
performed on a regular basis. In a
retainer agreement with a
company, the scope of services
covers drafting minutes of board
meetings and board resolutions,
secretary’s certifications, notarial
services and other similar routine
documents.
The lawyer or the law firm has the
right to charge additional
professional fees for work beyond
the services not covered by the
retainer agreement.
Such additional services may call
upon the lawyer to prepare
specialized agreements or handling
court cases on behalf of the
company.
5. Contingent Fee
A contingent fee arrangement is
valid in the Philippine 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 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
client who may not have sufficient
funds to pursue the case.
The lawyer deserves to collect a
higher fee especially in cases where
the client has meritorious cause of
action, but no means with which to
pay for legal services.
As sanctioned by the Supreme Court
in a number of cases, parties may
execute 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.
(cited in EUGENIO E. CORTEZ v.
ATTY. HERNANDO P. CORTES, supra)
6. Fixed Fee
In some cases, the lawyer and the
client may agree on a fixed fee for
handling a referral. The lawyer
and client agree in advance a
fixed fee for a specific legal work.
This is normally resorted to in the
preparation of contracts for
specific transactions which are
non-contentious.
A fixed fee arrangement may cover a
one-time transaction or recurring
transactions which similar in nature.
Normally, property developers have
recurring transactions and opt for fixed
fee such.
It is difficult to set a fixed fee in
adversarial proceedings but lawyers
may also agree on a fixed fee
arrangement for some civil cases like
annulment of marriage or unlawful
detainer cases.
7. Fee based on the Principle of
Quantum Meruit
In the absence of the written
agreement, the lawyer's
compensation shall be based
on quantum meruit, which means
"as much as he deserved."
The determination of attorney's fees
on the basis of quantum meruit is
also authorized "when the counsel,
for justifiable cause, was not able to
finish the case to its conclusion."
Moreover, quantum meruit becomes
the basis of recovery of compensation
by the attorney where the
circumstances of the engagement
indicate that it will be contrary to the
parties' expectation to deprive the
attorney of all compensation. (cited in
RAMON R. VILLARAMA v. ATTY.
CLODUALDO C. DE JESUS, Peralta, J.,
G.R. No. 217004, April 17, 2017)
8. Uplift/Success/Premium Fee
Most lawyers and law firms charge
success fees or premium fees for a
successful handling of a referral,
whether this involves court
litigation, contract negotiations or
arbitration matters.
The success fee may be covered by
the engagement contract.
In several instances, the success
fee or the premium fee will be
dictated by the benefits the client
will enjoy after the termination of
the referral.
Under this arrangement, a lawyer
or a law firm justifies its higher
fees with claim that the matter
involved was delicate, complex
and/or completed at an
unbelievable speed.
9. Expert’s Fees
In some cases, there is a need to
employ the services of an expert in
order to pursue a claim or a cause
of action. The expert need not be
lawyer as in environmental cases,
parties and even the courts are
allowed to resort to the specialized
knowledge of a person based his
scientific or technical background.
The fee of the expert witness is
separate of the professional fees of
counsel.
10. Costs and Other
Out of Pocket Expenses
Apart from professional fees,
clients will pay under a separate
invoice other costs related to a
legal referral. Court case referrals
require payment of court docket
fees. Filing fees are also paid
before administrative agencies.
Other costs may involve payment of
fines, penalties and surcharges.
Out-of-pocket expenses are likewise
charged to clients. These items
include, among others, transportation
costs and meals of lawyers;
commissioner’s fees, stenographer’s
fees, sheriff’s fees and process
server’s fees; notarial fees and
certification fees of official
documents; postage costs or private
courier’s delivery charges,
photocopying costs, transportation
costs and meals of paralegals; and
appearance fees of counsel.
Albano v. Atty. Perpetua Coloma,
Fernando, J., A.C. No. 528, October
11, 1967: The Court dismissed the
disbarment case filed by the
complainant. The Court said that
counsel, any counsel, who is worthy
of his hire, is entitled to be fully
recompensed for his services. With
his capital consisting solely of his
brains and with his skill, acquired at
tremendous cost not only in money
but in the expenditure of time and
energy, he is entitled to the protection
of any judicial tribunal against any
attempt on the part of a client to
escape payment of his fees.
Counsel denied that she could have
been removed for her failure to comply
with her obligations as counsel but
she served "faithfully, efficiently,
continuously and to the best of her
knowledge and capacity.”
Her dismissal then, according to her,
"was made without cause and
without the consent of herein
respondent and only on June 18,
1951, when the undersigned had
already won the case for them in the
Court of First Instance and in the
Court of Appeals.“
The Court allowed her to recover the
contingency fee consisting of 33%
of the recovered property.
Research and Services Realty, Inc. v.
Court of Appeals and Atty. Manuel S.
Fonacier, Jr., , DAVIDE, JR., J., G.R.
No. 124074. January 27, 1997: This
case settles the claim of Atty.
Fonacier for payment of his
contingency fee for having
successfully concluded a contract in
favor of Research and Services
Realty.
With the execution of the contract
which Atty. Fonacier prepared,
Research and Services Realty was
entitled to receive P28M from Filsteam
Company. It is the contention of the
petitioner that
Atty. Fonacier was only entitled to the
agreed amount of retainer fee of
P800.00 a month.
The termination of the legal services
of Atty. Fonacier was made definite on
March 31, 1993 at which time the
Memorandum of Agreement which
Research entered into with Filstream,
Inc., has already been effective. By
this time also, defendant Research
has already received the first two
stipulated consideration of the
agreement in the total sum of Six
Million (P6,000,000.00).
There was no intention to make the
retaining fee as the attorney’s fees for
the services contemplated. This is
evident from the provision allowing
additional attorney’s fees in collection
cases consisting of (1) a "contingent
fee" and (2) whatever the petitioner
might recover as attorney’s fees in each
case. The latter could only refer to the
attorney’s fees which the court might
award to the petitioner in appropriate
cases.
The Court held that Atty. Fonacier
was entitled to separate fee for the
contract he prepared. It further said
that unless expressly stipulated,
rendition of professional services by
a lawyer is for a fee or compensation
and is not gratuitous.
Dominguez et al. v. Court of Appeals et
al., Cuevas, Jr., J. G.R. No. L-52715
February 28, 1985: Benito E.
Dominguez, Jr. in his capacity as
President of ICSI engaged the legal
services of respondent Atty. Juan T.
David.
A conflict ensued when Dominguez
failed to pay the attorney’s fees of
Atty. David after the goods were
ordered released by the Bureau of
Customs.
This prompted counsel to institute an
action to recover his fees. The trial
court allowed recovery of Atty.
David’s professional fees of
P207,000.00 based on the agreement;
P 10,000.00 as and for attorney's fees;
P 20,000.00 as exemplary damages;
and costs of this suit.
The Court affirmed the award.
Spouses Vizarra et al . v. Rodriguez et
al., Tinga, J., G.R. NO. 148014,
December 5, 2006: The power of
courts to grant damages and
attorney's fees demands factual,
legal and equitable justifications, its
basis cannot be left to speculation or
conjecture. The award of attorney’s
fees must be supported by evidence.
This involves an initial action for
recovery of possession of property in
Boac, Marinduque where the trial
court affirmed Conchita R. Rodriguez’
title to the property. A subsequent
case ensued between the parties
involving other properties held in
common by all the parties. However,
the trial court enjoined Conchita from
exercising her right over her own
property.
The properties involved in the second
case were eventually auctioned off by
the Provincial Assessor for delinquency
taxes. Conchita challenged the sale
because she was not given notice.
The Court affirmed the findings of the
Court of Appeals of the bad faith of
the defendant-appellees' right from the
beginning which deprived Conchita her
property rights and confirmed the
award of attorney’s fees.
Czarina Malvar v. Kraft Foods
Philippines, Bersamin, J., G.R. No.
183952, September 9, 2013: The Court
said that although the practice of law is
not a business, an attorney is entitled to
be properly compensated for the
professional services rendered for the
client, who is bound by her express
agreement to duly compensate the
attorney. The client may not deny her
attorney such just compensation.
The Court allowed recovery of fees based
on contingent fees of Dasal, Llasos and
Associates, through the Motion to
intervene filed by Of Counsel Retired
Supreme Court Associate Justice Josue
N. Bellosillo.
The Court held that the law firm is
entitled to recover 10% of
₱41,627,593.75 of the backwages and the
sum equivalent to 10% of the value of the
stock option of Ms. Malvar.
Emiliano Court Townhouses
Homeowners Association v. Atty.
Michael Dioneda, Bellosillo, J., Adm.
Case No. 5162. March 20, 2003: The
complainant and respondent lawyer
agreed under a retainer agreement for a
professional fee of P20,000.00 and an
appearance fee of P1,000.00 per
hearing. The complainant insists that
the agreement covered a civil case only
but Atty. Dioneda said that the
agreement included a case before the
HLURB.
He said that he successfully secured a
favorable judgment before the HLURB
and was not negligent in the handling of
the referral.
For his failure in performing his duties to
his client, the Court suspended Atty.
Michael Dioneda from the practice of
law for six (6) months, was ordered to
return the amount of P20,000.00
representing his professional fees.
Sencio v. Calvadores, Davide,Jr., J, A.
C. No. 5841. January 20, 2003: The
complainant’s son died in a vehicular
accident. She asked that an
independent civil action be filed by
respondent lawyer. The complainant
paid the respondent the amount of
P12,000.00 as attorney’s fees and for
other expenses relating to the case.
Respondent lawyer failed to institute
the civil case as requested by client.
The Court found Calvadores guilty of
violation of the lawyer’s oath,
malpractice and gross misconduct,
suspended for six (6) months, and
ordered to return to his client the
amount of P12,000.00 with interest at
12% per annum from the date of the
promulgation of the resolution until the
return of the amount.
Maritess Garcia v. Atty. Illuminado
Manuel, Davide,Jr., J., A.C. No. 5811,
January 20, 2003: The Court
suspended the respondent lawyer
from the practice of law for six (6)
months and ordered him to render an
accounting of all monies he received
from the complainant. Maritess Garcia
sought the services of Atty. Manuel
for a fee of P70,000.00 to seek
support for her child and the eviction
of her husband.
Rabanal v. Atty. Faustino Tugade,
Mendoza, J., A.C. No. 1372. June 27,
2002: The Court suspended Atty.
Tugade for six months for his failure
to file the appellant brief of Cayetano
Rabanal in a homicide case in
Tuguegarao, Cagayan despite receipt
of funds from the Spouses Rabanal. It
said that the absence of a contract
does not excuse the lawyer from his
professional duty.
A written contract 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. This
took 27 years to resolve for failure of
respondent Tugade to update his to inform
the IBP of his change of address.
NOTE: The Supreme Court has directed all
IBP chapters to update the directory of
their members.
Spouses Galen v. Atty. Paguirigan,
Mendoza, J., A.C. No. 5558 March 7,
2002: The respondent lawyer failed to
file a brief to the detriment of their
respective client and was suspended
by the Court for six (6) months and
ordered him to reimburse the amount
of P10,000 which he received to cover
the filing fees and other litigation
costs.
The complainants won the civil suit
before the trial court but the losing
party appealed the case before the
Court of Appeals. Trusting in their
counsel, Spouses Galen continued to
retain the services of Paguirigan.
Unfortunately, counsel failed to file the
appellate brief. Then, he assured that
he will file a Motion for
Reconsideration but it was dismissed
for having been filed out of time.
Philippine National Construction
Corporation v. Apac Marketing
Corporation represented by Cesar M.
Ong, Jr., Sereno, C.J., G.R. No.
190957, June 5, 2013: The trial court
and the Court of Appeals awarded
attorney’s fees. The Court observed,
however, that the only discernible
reason proffered by the trial court in
granting the award was that
respondent, as complainant in the
in the civil case was forced to litigate
to protect the latter’s interest. It said
that the law is clear that in the absence
of stipulation, attorney’s fees may be
recovered as actual or compensatory
damages under any of the
circumstances provided for in Article
2208 of the Civil Code.
The case stemmed from a dispute for
the purchase of crushed basalt rock to
the petitioner by the respondent.
The trial court awarded P50,000.00 as
attorney’s fees, plus P3,000.00 per
court appearance in favor of Apac
Marketing Corporation represented by
Atty. Cesar M. Ong.
The Court of Appeals affirmed the
ruling of the trial court with
modification ordering PNCC to pay
legal interest at six per cent (6%) per
annum on the principal obligation,
computed from January 8, 1999 until
its full payment in January 2001.
PNCC appealed the ruling of the C.A. on
the lone issue of the propriety of the
award of attorney’s fees in favor of
respondent.
The Court granted the petition holding
that Article 2208 of the New Civil Code
of the Philippines that as a general rule,
the parties may stipulate the recovery of
attorney’s fees. The award of attorney’s
fees under Article 2208 must be
substantiated.
ABS-CBN Broadcasting Corp. v. CA,
David, C.J., G.R. No. 128690 January
21, 1999: The Court reversed the award
of attorney’s fees holding that
attorney’s fees are not to be awarded
every time a party wins a suit. The
power of the court to award attorney's
fees under Article 2208 demands
factual, legal, and equitable
justification. The award must be
This case stemmed from the contract
between Viva and ABS-CBN which
granted an exclusive right for ABS-CBN
to exhibit some Viva films.
Under the agreement, ABS-CBN shall
have the right of first refusal to the next
twenty-four (24) Viva films for TV
telecast under such terms as may be
agreed upon by the parties.
Officers of Viva and ABS-CBN were
supposed to discuss the implementation
of the stipulation but the parties never
reached an agreement.
However, Mr. Lopez testified that in a
meeting, Mr. Del Rosario agreed that the
Viva films to be shown under the
contract would amount to a cost of
P36M and that is evidenced by the
latter’s signature in a paper napkin. Del
Rosario denied this and demanded
payment of P60M.
ABS-CBN filed before the RTC a
complaint for specific performance with a
prayer for a writ of preliminary injunction
and/or temporary restraining order
against private respondents Republic
Broadcasting Corporation (“GMA
Network”), Viva Production and Vicente
Del Rosario.
The trial court ruled in favor of the
defendants and awarded P212,000.00 by
way of reasonable attorney's fees, among
others.
Filomena Benedicto v. Antonio
Villaflores, Nachura, J., G.R. No. 185020,
October 6, 2010: The Court denied the
claim for attorney’s fees of Benedicto
despite the fact that she was adjudged
the true owner of the land in question.
In this case, the Court explained the
reason behind the need for the courts to
arrive upon an actual finding to serve as
basis for a grant of attorney’s fees,
considering the dual concept of these
fees as ordinary and extraordinary
concept of attorney’s fees.
Filomena appealed the RTC and the CA
decisions for denying her claim for
attorney’s fees. She asserted that there is
overwhelming proof on record to support
her claim, and insists on entitlement to
attorney’s fees and litigation expenses
amounting to ₱440,700.00. The Court
held that the award of attorney’s fees
does not automatically accrue to the
prevailing party.
There must a factual finding to support
the award.
Spouses Chung v. Ulanday
Construction, Inc., Brion, J., G.R. No.
156038, October 11,2010: This case
involves a dispute over a construction
contract of the house of the
petitioners in Urdaneta Village. The
contractor instituted an action before
the trial court of Makati to collect the
unpaid obligation of the Spouses
Chung.
Both parties moved for
reconsideration and the Court of
Appeals modified the decision by
granting the respondents motion for
reconsideration by awarding it
attorneys fees equal to 10% of the
total award to the contractor.
The Supreme Court reversed the
ruling of the Court of Appeals since
the award is not substantiated.
 Santos Ventura Hocorma Foundation,
Inc., represented by Gabriel H. Abad v.
Atty. Richard V. Funk, Abad, J., A.C. NO.
9094, August 15, 2012: Atty Funk
claimed that before Santos, the
founding member of the petitioner, left
for America in August 1983 for medical
treatment, he entered into a retainer
agreement with him. They agreed that
Atty. Funk would be paid for his legal
services out of the properties that
Santos donated or sold to the Hocorma
Foundation.
Subsequently, a dispute arose and the
complainant refused to pay the agreed
fees. The complainant alleged that
respondent lawyer acted as counsel of
the opposing party in a land case
against the foundation which land was
donated by Santos.
The Court found the lawyer guilty of
representing conflicting interests and
held that it was not entitled to any
professional fees from the petitioner.
Keld Stemmerik, represented by
Attys. Herminio A. Liwanag and
Winston P.L. Esguerra v. Atty.
Leonuel N. Mas, Per Curiam, A.C. No.
8010, June 16, 2009: Keld Stemmerik
is a citizen and resident of Denmark.
In one of his trips to the Philippines,
he was introduced to respondent
Atty. Leonuel N. Mas. Mas drew up a
document which allowed Stemmerik
to purchase a land of public domain.
Despite his absence during the
proceedings, the respondent was
disbarred and ordered to return to
complainant Stemmerik the total amount
of ₱4.2 million with interest at 12% per
annum from the date of promulgation of
the Court’s resolution until full payment
The National Bureau of Investigation
(NBI) was likewise ordered to locate Atty.
Mas and to file the appropriate criminal
charges against him.
Modesta Borcena et al. v. Intermediate
Appellate Court, Hon. Clemente D.
Paredes, Romulo C. Basa, Leovino
Legaspi and Hon. Zotico Tolete,
Gutierrez, J., G.R. No. 70099 January 7,
1987: This case involves the
engagement of services of respondent
lawyer in a civil suit filed by the
complainants primarily against MWSS
for damages their property suffered
with the installation of its pipes.
The petitioners challenged the amount
which the respondent Court of Appeals
and the trial court ordered to be paid to
their former lawyer, as his compensation.
The Supreme Court found the award
unconscionable and unreasonable even if
it was stipulated in the contract. It held
that contracts for attorney's services
stand upon an entirely different footing
from contracts for the payment of
compensation for any other services.
Francisco A. Delgado, v. Esteban De La
Rama, Villamor, J., G.R. No. L-17760. June
1, 1922: In this case the plaintiff sought
to recover from the defendant the sum of
P60,000, with interest thereon and costs,
as the value of the professional services
rendered by him to the defendant in two
civil cases filed in the Court of First
Instance of Occidental Negros for
damages. The Court modified the award
of the lawyer’s fees to P15,000.00. It said
that the engagement of counsel does not
guarantee that the lawyer will win the
case on behalf of his client.
It said that in determining the
compensation of an attorney, the
following circumstances should be
considered:
1. the amount and character of the
services rendered;
2. the skill and experience called for in
the performance of the services;
3. 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 standing of the attorney; the
results secured; and
6. whether or not the fee is contingent or
absolute, it being a recognized rule that
an attorney may properly charge a much
larger fee when it is to be contingent
than when it is not.
Sesbreno v. Court of Appeals et al.,
Romero, J., G.R. No. 117438, June 8,
1995: This case involves an action for
reinstatement and claim for
backwages of some 52 employees of
the provincial government of Cebu.
Raul H. Sesbreño, replaced the
employees' former counsel
Atty. Catalino Pacquiao.
The Court ruled that 50% of all monies
which private respondents may
receive from the provincial
government, are excessive and
unconscionable. It ruled that under the
circumstances, a fee of 20% of back
salaries would be a fair settlement in
this case.
Leah Taday v. Atty. Dionisio Apoya,
Jr., PER CURIAM, A.C. No. 11981, EN
BANC, July 3, 2018: Leah Taday, an
OFW staying in Norway, asked her
parents in the Philippines, to seek
legal services for the nullification of
her marriage. Taday's parents found
Atty. Dionisio Apoya and contracted
his legal services.
Thereafter, a Retainer Agreement
was executed and parties agreed an
acceptance fee of P140,000.00 paid
in installment. After notarizing the
petition, Atty. Apoya allegedly filed it
before the RTC of Caloocan and was
then raffled to Branch 131.
The lawyer was disbarred for a
fictitious decision rendered by a non-
existent judge.
Helen Gradiola v. - Atty. Romulo A. Deles,
Del Castillo, J., A.C. No. 10267, FIRST
DIVISION, June 18, 2018: Gradiola
engaged the services of Atty. Deles in a
civil case then pending before the Court
of Appeals. Complainant, however,
alleged that respondent lawyer abetted
the unauthorized practice of law by
allowing Ernesto S. Araneta, disbarred
lawyer, to do the legal research works
and the preparation of various pleadings
relative to the civil case.
Complainant was billed by Araneta
P207,500.00 which he allegedly split
with respondent.
While the IBP found Deles liable for
allowing a disbarred lawyer to handle
the case of the complainant, the Court
remanded the case back to IBP for
failure to accord Deles his right to due
process. The son of Deles appeared on
his behalf because the latter was “ in a
vegetative state.”
International Hotel Corporation v.
Joaquin, G.R. No. 158361, April 10,
2013: The principle of quantum meruit
justifies the payment of the reasonable
value of the services rendered by the
lawyer and may be used to determine
his compensation in the absence of a
written agreement for that purpose. It
may be authorized in the following
cases:
a. There is no express contract for
attorney’s fees agreed upon between
the lawyer and the client;
b. When although there is a formal
contract of attorney’s fees, the
stipulated fees are bound
unconscionable or unreasonable by
the court;
c. When the contract for attorney’s fees
is void due to purely formal matters
or defects of execution;
d. When the counsel, for justifiable
cause, was not able to finish the
case to its conclusion;
e. When lawyer and client disregard
the contract of attorney’s fees;
f. When there is a contract but no
stipulation as to attorney’s fees;
and
g. When the client dismissed his
counsel or the latter withdrew
therefrom, for valid reasons.
However, there are two exceptions to
this rule:
1. If an attorney violates the Code of
Professional Responsibility, then
compensation is not available; and
2. If the attorney substantially
performs the duties owed to the
client, then the attorney may
recover the full contingency, not
just quantum meruit.
The substantial performance
exception only applies in the rare
case where full performance is
delinquent by "minor and relatively
unimportant deviations."' (Ross v.
Scannell, 97 Wn.2d 598, 1982)
Spouses Nicasio v. Atty. Mendoza,
A.C. No. 5440, November 26, 2014: An
attorney’s retaining lien is fully
recognized if the presence of the
following elements concurs:
(1) lawyer-client relationship;
(2) lawful possession of the
client’s funds, documents and
papers; and
(3) unsatisfied claim for attorney’s
fees.
The Court said that when there is no
unsatisfied claim for attorney’s fees,
lawyers cannot validly retain their
client’s funds or properties.
Furthermore, assuming that Atty.
Mendoza had proven all the
requisites for a valid retaining lien,
he cannot appropriate for himself his
client’s funds without the proper
accounting and notice to the client.
National Power Corporation Drivers
and Mechanics Association vs.
National Power Corporation, 565
SCRA 417: A charging or special lien
is an attorney’s specific lien for
compensation on the fund or
judgment which he has recovered by
means of his professional services
for his client in a particular case.
The lien shall attach to the
proceeds of the judgment and the
client who receives the same,
without paying his attorney who
was responsible for its recovery,
shall hold said proceeds in trust for
his lawyer to the extent of the
value of the lawyer’s recorded lien.
Metropolitan Bank and Trust Co. vs.
Court of Appeals, 181 SCRA 367: A
charging lien, to be valid as security
for payment of attorney's fees and
lawful disbursements, requires that
the following requisites concur:
1. There must be an attorney-
client relationship;
2. The attorney has rendered
services;
3. A money-judgment favorable to
the client has been secured in the
action;
4. The attorney has a claim for
attorney's fees or advances; and
5. A statement of his claim has
been duly recorded in the case
with notice thereof served upon
the client and the adverse party.
CANON 20 of the Code of Professional
Responsibility provides: “A lawyer
shall charge only fair and reasonable
fees.”
Rule 20.01specifically provides – “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;
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.”
Section 24 of Rule 138 likewise
provides some measure by which the
lawyer’s professional fees may be
determined. It provides-
“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.”
While the Code of Professional
Responsibility stresses the duty of the
lawyer to put primacy to the interest the
clients, charging professional fees puts
a burden on the client.
Unless a lawyer agrees to handle a case
on a pro bono basis; or a lawyer is
appointed as counsel de oficio; or is
obliged to handle a legal aid case under
the program of the Supreme Court, the
collection of professional fees produces
some degree of tension between the
lawyer and the client.
At best, the lawyer or the law firm
must at the initial meeting define the
parameters of the engagement and
must reduce the terms of the
engagement as well the estimated
fees to include the professional fees,
filing fees and other out-of-pocket
costs to necessary to successfully
handle the referral.
There are no hard and fast rules to
follow but a spirit of candidness
must govern the relationship of the
lawyer or law firm and the client. A
spirit of openness must be present
at the start of the lawyer-client
relationship. This will allow the
client to decide freely on the terms
of the engagement. The clarity of
charging of professional fees will
lay down the foundation for a
smooth lawyer-client relationship.
The issue of costs is a sensitive area
among lawyers or law firm. Except for
filing fees, there is no standard when it
comes to out-of-pocket costs which
are charged to clients and professional
fees will definitely vary. As a general
guidepost, it is said that the costs
must be proportionate to the nature
and value of case. What is
proportionate is a relative matter.
In most cases handled by a law firm,
professional fees cover more than
legal representation since the client
has full access to advice and legal
guidance, services, and the
expertise of an entire team of
lawyers.
In view of the issues that clients
have with lawyer’s fees, it is not
therefore a surprise that a number
of administrative cases are lodged
against lawyers.
The issue of costs has not been
adequately addressed by the
Integrated Bar of the Philippines. The
cases involving lawyer’s fees give the
legal profession a bad reputation.
Public confidence in the legal
profession is seriously affected by
these issues.
In the Philippines, the source of legal
fees normally comes from personal
funding of an individual. For corporate
cases, the fees are absorbed by the
company.
For clients who do not have sufficient
cash to cover legal representation, a
contingency arrangement may be
executed between the lawyer and the
client.
The Rules of Court allow litigants to
plead as pauper litigants. The Rules of
Procedure on Environmental Cases will
petitioners to plead without payment of
docket fees.
The IBP has a National Committee on
Legal Aid. All IBP chapters nationwide
have their legal aid programs. The
Supreme Court provides financial
support to the IBP National Committee
on Legal Aid and all other IBP chapters
for their respective legal aid programs.
In order to avoid any possible
animosity with clients, it is
suggested that a letter of
engagement must include the
following items:
1. Initial consultation with the
client which should make a
statement why the client
approached the lawyer or the firm;
2. Preliminary discussion as to the
legal options offered to the client;
which would delimit the parameters
of engagement;
3. The option or the legal course
of action chosen by the client
which will not specifically define
the terms of engagement;
4. The standards and the estimated
period to be covered by the
engagement;
5. The lawyers to be assigned to the
referral;
6. The schedule of fees and the out-
of-pocket expenses; and
7. A statement as the policy on
success fee or premium billing at
the termination of the engagement.
The lawyer or the law firm must
ensure that the client signs the
letter of engagement.
End of Presentation
Thank you