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Law Firms cannot be awarded attorney’s fees when they sue their former clients.

Retainer Agreements often provide that that the law firm is entitled to attorney’s fees in the amount of 10% to 15% of the unpaid balance if the law firm sues the client for feess owed. 

An attorney fee based upon a fixed percentage of a debt is unenforceable.    Monmouth Meadows Homeowners Association, Inc. v. Hamilton 416 Md. 325, fn.14 (2010)  (“Our holding that where an attorney is entitled to reasonable fees under the terms of a contract, that attorney is not permitted to define that amount by use of a percentage of a judgment”).   This is also true for a promissory note with a confessed judgment provision.  Meyer v. Gyro Transport Systems, Inc. 263 Md. 518, 531 (1971) (“When the provision to confess judgment provides only for a reasonable attorney’s fee, the reasonable amount of the fee must be determined by the court and counsel may not, himself, use a percentage to determine the amount of the attorney’s fee”).

Even if the subject promissory note provided for reasonable attorneys (as opposed to a fixed percentage), an attorney who represent herself in enforcing such a promissory note is not entitled to any attorney’s fees, because no such fees had been incurred: “[I]t seems implicit in the provisions of the note that the 15% commission shall be payable only to an attorney employed in the case or to the plaintiff in reimbursement for his expense in employing such an attorney, and that plaintiff is not entitled to collect such additional compensation when he acts in proper person”.     Weiner v. Swales 217 Md. 123, 125 (1958).  More recently, the same result was reached in Greenbriar Condominium, Phase I, Council of Unit Owners, Inc. v. Brooks 159 Md.App. 275, 318, cert. denied Greenbriar v. Brooks 384 Md. 581 (2005) (holding “there is nothing in the contract language to suggest that parties representing themselves are entitled to recovery attorney’s fees that they have not incurred”).

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Article by Stewart A. Sutton featured in the Maryland Bar Journal:
Emotional Distress Damages - Recoverable in Legal Malpractice Actions
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Law Office of Stewart Andrew Sutton, LLC
8 Executive Park Court
Germantown, Maryland 20874
Telephone: 301-916-5000
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