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Friday, Jun 2, 2023

Valley Bar Sets Up Service to Arbitrate in Fee Squabbles

The San Fernando Valley Bar Association has launched a fee arbitration program to assist attorneys and clients with disputes over lawyers’ fees. The association began the program last month with about 75 of its member attorneys trained to act as arbitrators in the process, according to Myer J. Sankary, chair of the Valley Bar Association’s fee mediation program. Attorneys are required by state regulations to submit to arbitration to try and resolve fee disputes before filing a lawsuit. Some 500 such cases come before the Los Angeles County Bar Association, which runs the largest fee arbitration program in the state, each year. Many more disputes over attorneys’ fees are filed but settled before they get to arbitration. The Valley bar association program will join the county’s offering as well as a program from the Beverly Hills Bar Association. “There are disputes all the time,” said Sankary. “Generally attorneys try to work it out with the client. When it gets to a point, we try to work it out so it doesn’t have to go through litigation.” The SFVBA program will compete with the program offered by the L.A. County and Beverly Hills bar associations, a situation that officials took into consideration when setting up the program. “When we established our rules and set our fee schedule, we had the Beverly Hills and Los Angeles County programs in front of us, and we were certainly aware of what the other associations were charging,” said Elizabeth Post, executive director of the San Fernando Valley Bar Association. Post said that the decision to set up a program in the Valley was made because members wanted to work with others in the local area. “They’re a much larger program,” Post said of the L.A. County Bar Association, “but we expect to be successful because our volunteers are Valley attorneys and the clients are Valley clients. We think, for the most part, the attorneys want to be heard by their peers.” Post said the SFVBA set its fee schedule, which works on a sliding scale based upon the amount in dispute, to correspond with the L.A. County schedule. Fees for the service begin at 5 percent of the amount in dispute and go up to 7 percent for larger cases. Fee disputes typically revolve around billable hours, the traditional payment arrangement whereby attorneys set a per-hour fee and track the hours spent on a case. Sometimes the disputes arise because clients simply can’t pay and they are seeking a way to postpone the inevitable. But in many more cases, there are issues over whether the hours spent were correct or even worthwhile given the outcome of the case. “Most of the disputes are legit,” said Frank G. Blundo Jr., an Encino attorney and chair of the Attorney-Client Mediation and Arbitration Services Committee at the Los Angeles County Bar Association. “I’ve arbitrated hundreds over the years and oversee all the cases and in more cases than you would like to think, the attorney is the one who is at fault to one degree or another.” Blundo said he did not have specific statistics on the growth of fee arbitration cases or the success rate. The association surveys those who have completed the arbitration process, but the surveys aren’t always returned. “We know one thing,” he said. “Cases are getting higher in terms of the dollars in dispute.” Attorney’s fees have likely been rising as well, but Blundo noted that there are other reasons for the trend. “Business clients are getting more sophisticated about attorney billings and not taking them at face value anymore.” The L.A. County Bar Association declined to disclose the revenues its arbitration program generates, but the program provides enough to fund the major portion of a Dispute Resolution Service program that trains school counselors and students in ways to resolve disputes. Dispute Resolution Services is a non-profit affiliated with the county bar group. Post said that for the time being, the Valley bar association is hopeful that the program will pay for itself.

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