SECTION 41. Fair and reasonable fees. — A lawyer shall charge only fair and reasonable fees.

(20)
Attorney’s fees shall be deemed fair and reasonable if determined based on the following factors:
(a) the time spent and the extent of the service rendered or required;
(b) the novelty and difficulty of the issues involved;
(c) The skill or expertise of the lawyer, including the level of study and experience required for the engagement;
(d) The probability of losing other engagements as a result of acceptance of the case;
(e) The customary charges for similar services and the recommended schedule of fees, which the IBP chapter shall provide;
(f) The quantitative or qualitative value of the client’s interest in the engagement, or the benefits resulting to the client from
the service;
(g) The contingency or certainty of compensation; and
(h) The character of the engagement, whether limited, seasonal, or otherwise; and
(i) Other analogous factors. (20.01a)
SECTION 42. Division of fees upon referral. — A lawyer shall, in case of referral of legal services in favor of another lawyer with the
written informed consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed.
(20.02a)
Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer, a division or sharing of fees is allowed with
the deceased lawyer's legal heirs or estate. (9.02(b)a)
SECTION 43. Non-Sharing of fees with non- lawyers. — A lawyer shall not share, split, or divide or stipulate to divide, directly or
indirectly, a fee for legal services with persons or organizations not licensed or authorized to practice law. (9.02a)
SECTION 44. Payment of compensation by third party. — A lawyer shall not receive any fee, reward, costs, commission, interest,
rebate or forwarding allowance or other compensation from anyone other than the client, except upon the written informed consent of such
client. (20.03a)
Receipt of compensation from someone other than the client must not interfere with the lawyer's independence, professional
judgment, or the lawyer-client relationship. Neither should information relating to representation of a client be disclosed in violation of the rule
on privileged communication. (ABA Model Rules, Rule 1.8 — Comment)
SECTION 45. Prompt payment of legal fees. — A lawyer is entitled to prompt payment from the client of attorney's fees.
Absent an express agreement as to professional fees, a lawyer is entitled to be paid reasonable attorney's fees in accordance with
Canon III, Section 41. (n)
SECTION 46. Controversy over legal fees. — A lawyer shall avoid any controversy with a client concerning fees for legal services
and shall resort to judicial action solely to prevent imposition, injustice or fraud. (20.04a)
SECTION 47. Enforcement of attorney’s lien. — In case of non-payment of attorney's fees, a lawyer may resort to the enforcement
of the attorney's lien under Canon III, Section 54, by filing a Notice of Enforcement of Attorney's Lien with the court, tribunal, or other
government agency of origin where the action or proceeding the lawyer rendered service for is pending, without prejudice to other remedies
under the law or the Rules of Court. The Notice shall be accompanied by proof of the services rendered, and served on the client. The court,
tribunal, or other government agency, after hearing, shall determine the lawyer's entitlement to the claimed fees.
The enforcement of an attorney's lien shall be treated as an independent claim and shall in no instance delay the resolution of the
main case. The resolution of the lawyer's claim may be included in the main judgment or in a separate partial judgment. In the case of a
partial judgment, the same shall be subject of appeal.
An appeal in the main case shall not stay the execution of the lawyer's lien. In the execution of the judgment in the main case, the
court shall give due consideration to the pending claim of the lawyer.
If the claim for attorney's lien arises after a decision has been rendered by the court, tribunal, or other government agency of origin on
the action or proceeding, the claim for the enforcement of the lien shall be by an independent action. (n)
SECTION 48. Compensation for counsel de officio. — Subject to availability of funds as may be provided by law, the court may, in
its discretion, order a lawyer engaged as counsel de officio to be compensated in such sum as the court may fix following Canon III, Section
41, provided that it is not covered by the provision on Limited Legal Services. (Rule 138.32a)
The legal work of the counsel de officio is performed for the public good with or without assessment of attorney’s fees (Section 32,
Rule 138, Rules of Court). If it is without compensation it is known as pro bono work. The need to provide legal services extend to civil,
administrative and quasi-judicial cases.

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 services 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 services;
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.

Kinds of Payment which may be stipulated upon:

1. a fixed or absolute fee which is payable regardless of the result of the case
2. a contingent fee that is conditioned to the securing of a favorable judgment and recovery of money or property and the amount of which may be on a
percentage basis
3. a fixed fee payable per appearance
4. a fixed fee computed by the number of hours spent
5. a fixed fee based on a piece of work
Attorney’s Fees
1. Ordinary attorney’s fee -the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis for this
compensation is the fact of his employment by and his agreement with the client.
2. Extraordinary attorney’s fee – an indemnity for damages ordered by the court to be paid by the losing party in litigation. The basis for this is any of the cases
provided for by law where such award can be made, such as those authorized in Article 2208 of the 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.
How attorney’s fees may be claimed by the lawyer:
1. It may be asserted either in the very action in which the services of a lawyer had been rendered or in a separate action.
2. A petition for attorney’s fees may be filed before the judgment in favor of the client is satisfied or the proceeds thereof delivered to the client.
3. The determination as to the propriety of the fees or as to the amount thereof will have to be held in abeyance until the main case from which the lawyer’s
claim for attorney’s fees may arise has become final. Otherwise, the determination of the courts will be premature.
Kinds of Retainer Agreements on Attorney’s fees:
1. General Retainer or Retaining Fee – it is the fee paid to a lawyer to secure his future services as general counsel for any ordinary legal problem that may arise
in the ordinary business of the client and referred to him for legal action;
Special Retainer – that is a fee for a specific case or service rendered by the lawyer for a client
2. Quantum Meruit –it means “as much as he deserves”, and is used as the basis for determining the lawyer’s professional fees in the absence of a contract, but
recoverable by him from his client.
Quantum Meruit is resorted to where:
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 stipulated fees are found unconscionable or unreasonable by the court.
3. When the contract for attorney’s fees is void due to purely formal matters or 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.
Skill: length of practice is not a safe criterion of professional ability.
Rule 20.02 – A lawyer shall, in cases 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.

Unauthorized counsel: Not entitled to attorney’s fees.

Stipulation regarding payments of attorney’s fees is not illegal/immoral and is enforceable as the law between the parties provided such stipulation does not
contravene law, good morals, etc.
When counsel cannot recover full amount despite written contract for attorneys’ fees:
When he withdraws before the case is finished
justified dismissal of attorney (payment: in quantum meruit only)
The reason for the award of attorney’s fees must be stated in the text of the decision; otherwise, if it is stated only in the dispositive portion of the decision, the
same must be disallowed on appeal.
Even though the interest or property involved is of considerable value, if the legal services rendered do not call for much efforts there is no justification for the
award of high fees.
Champertous Contracts (void) – Lawyer stipulates with his client that in the prosecution of the case, he will bear all the expenses for the recovery of things or
property being claimed by the client and the latter agrees to pay the former a portion of the thing/property recovered as compensation.
Compensation to an attorney for merely recommending another lawyer is improper (agents)
Attorney’s fees for legal services shared or divided to non-lawyer is prohibited. Division of fees is only for division of service or responsibility.
A lawyer should try to settle amicably any differences on the subject. A lawyer has 2 options. Judicial action to recover attorney’s fees:
In same case: Enforce attorney’s fees by filing an appropriate motion or petition as an incident to the main action where he rendered legal services.
In a separate civil action.
SAMPLE CASE ON ATTORNEY’S LIEN

G.R. No. L-12905 February 26, 1959

ELENA PERALTA VDA. DE CAIÑA, ET AL., petitioners,

vs.
HON. GUSTAVO VICTORIANO, ET AL., respondents.

A. B. Encarnacion and Associates for petitioners.

Flaviano T. Dalisay, Jr. for respondents.

BAUTISTA ANGELO, J.:

This is a petition for certiorari seeking the annulment of an order of respondent judge dated July 10, 1957 directing petitioners to surrender to the Register of deeds of Rizal their
owner's duplicate of Transfer Certificate of Title No. 51585 in order that the attorney's lien of their former counsel Flaviano T. Dalisay, Jr. may be annotated on the back thereof.

Petitioners are the widow and children of the late Valeriana Caiña who was the owner of a parcel of land covered by Transfer Certificate of Title No. 21702. A portion of this property
was transferred to one Gavina Cierte de Andal and as a result said title was cancelled and a new one issued in their names bearing No. 51585.

Respondent Flaviano T. Dalisay, Jr. was the attorney of one of petitioners, Elena Peralta Vda. de Caiña, in an action for ejectment filed before the Justice of the Peace of Caloocan,
Rizal, against one Ricardo Nabong, which was dismissed and appealed to the Court of First Instance of Rizal. In the latter court, the case was docketed as Civil Case No. 3875, and
because of the non-appearance of defendant, the latter was declared in default and judgment was rendered in favor of plaintiff. This judgment became final and executory for lack of
appeal.

On June 26, 1957, respondent Dalisay filed a motion in the same ejectment case for annotation of his attorney's lien on the back of Transfer Certificate of Title No. 51585 claiming
that, notwithstanding the services he had rendered to the widow and her children who were presented by him in said case, they have failed to pay him his attorney's fees which he
fixed at P2,020. This motion was set for hearing and thereafter the same was granted in an order entered on July 10, 1957 wherein the court ordered petitioners to surrender their
duplicate copy of said certificate in order that the annotation requested may be made. Upon receipt of a copy of this order, petitioners filed a motion for reconsideration alleging that
they were never furnished with a copy of respondent's motion, nor notified of the date of its hearing, for which reason they were not able to appear to contest the same. This motion
was opposed by respondent Dalisay who averred that petitioners were furnished with a copy of his motion by registered mail three days before the hearing as shown by the return
card attached to his written opposition. And on August 27, 1957, the court denied the motion. Hence the present petition for certiorari.

This issue to be determined is whether the attorney's lien of respondent Dalisay for services he had rendered in the ejectment case can be ordered annotated on the back of
Transfer Certificate of Title No. 51585.

An attorney's lien is of two kinds: one is called retaining alien and the other charging lien. 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. 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 litigation of his
client (Section 33, Rule 127; Rustia vs. Abeto, 72 Phil., 133). Under this rule, this lien, whether retaining or charging, takes legal effect only from and after, but not before, notice of
said lien has been entered in the record and served on the adverse party (Macondray & Company, Inc. vs. Jose, 66 Phil., 590; Menzi and Company vs. Bastida, 63 Phil., 16).

It may therefore be seen that 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. And it has been held that 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's retains possession ends (Rustia vs. Abeto, supra).

In the instant case, the lien which respondent attorney tried to enforce for the satisfaction of his professional fee is charging in the sense that his purpose is to make of record his
claim in order that it may be considered in the execution of the judgment that may be rendered in the case, and this he has already done. Thus, he had already caused a statement
of his claim to be entered in the record of the ejectment case and that is all what the rule requires of him to do. Certainly, he cannot go any further, such as what he led the trial court
to do, that is, to have his lien annotated on the back of the title of petitioners which is beyond the province of the court. The lien of respondent is not of a nature which attaches to the
property in litigation but is at most a personal claim enforceable by a writ of execution. The respondent judge has therefore exceeded his authority in issuing the order subject of the
present petition for certiorari.

Petition is granted. The order of respondent judge dated July 10, 1957 is hereby set aside. Costs against respondent Flaviano T. Dalisay, Jr.

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador, Concepcion, Reyes, J.B.L. and Endencia, JJ., concur.