It is a common mistake for the attorney representing the recipient of alimony not to include language stating that the alimony is not subject to termination under Family Law Section 11-108.

A promissory note with a confessed judgment provision (hereinafter referred to as a “confessed judgment note”) is a powerful tool to secure payment and, in the event of default, to obtain an expeditious judgment for the balance owed.  Confessed judgment notes are commonly used by attorneys to collect outstanding fees owed by clients.

An attorney fee based upon a fixed percentage of a debt in a confessed judgment note 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 confessed judgment note.  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 confessed judgment 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”).

Nor is a pro se attorney entitled to an award of attorney’s fees under Maryland Rule 1-341 for litigating a confessed judgment action, because a “A lawyer who represents himself or herself has not incurred legal fees”.   Frison v. Mathis188 Md.App. 97,  109 (2009)

 A client should never sign such a promissory note, because there is a preexisting contractual obligation for the client to pay the fees owed. 

Rule 1.8(a) of the Maryland Lawyers’ Rules of Professional Conduct require that the attorney inform the client of the desirability of seeking independent counsel and to give the client a reasonable opportunity to seek independent counsel prior to executing a promissory note.   Rule 1.8 also requires that the attorney provide the client with informed consent in the form of a writing signed by the client, even if the client chooses not to seek independent counsel.

When a client signs a promissory note while being represented by the attorney, this creates a financial relationship between the client and the attorney.   Such a relationship is a prima facia violation of Rules 1.7(a) (prohibiting representation when an attorney has a personal conflict of interest with the client) and 1.8(a).  See Atty. Griev. Comm’n v. Snyder, 368 Md. 242, 265 (2002); Atty. Griev. Comm’n v. Korotki, 318 Md. 646, 666 (1990) (“to sustain a transaction of advantage to himself with his client, the attorney has the burden of showing, not only that he used no undue influence, but that he gave his client all the information and advice which it would have been his duty to give if he himself had not been interested, and that the transaction was as beneficial to the client as it would have been had the client dealt with a stranger”).   Indeed, “when attorney and client contract during their attorney-client relationship, ‘the law makes a presumption against the attorney and in favor the client’”.  Id. (quoting Etzel v. Duncan, 112 Md. 346, 350-51 (1910)).   “This rule is founded upon public policy, because the confidential and fiduciary relationship enables an attorney to exercise a very strong influence over his client and often affords him opportunities to obtain undue advantage by availing himself of the client’s necessities, credulity and liberality”.  Hughes v. McDaniel, 202 Md. 626, 633 (1953).

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”).

Let’s make the hiring decision even more difficult.  Imagine you must choose between 2 attorneys, but the only infomation you know is that one attorney wears a $5,000 Rolex watch and that the other attorney wears a $250 Seiko watch.  Should you choose the Rolex attorney, because the expensive watch may be an indicator of success?   Or should you choose the Seiko attorney, because the inexpensive watch shows that the attorney is not concerned about projecting an image of success?

I personally would choose the attorney with the Seiko watch.   Many lawyers deliberately attempt to create the impression that they are successful by displaying their extravagant lifestyle.  They drive high-end luxury vehicles, wear designer clothes and expensive jewelry, and live in high priced homes.  The problem arises when lawyers live beyond their means.  Such lawyers have a dysfunctional incentive to take on more cases than he or she can possibly handle.  The hallmark of an overextended lawyer is providing low quality legal service to a high number of clients and charging excessive fees.  This explains why many attorneys in Rockville and Bethesda charge in excess of $400 per hour.

A non-materialistic lawyer is not concerned with creating the impression that he or she is successful by displaying ostentatious badges of wealth.  The hallmark of a non-materialistic lawyer is providing high quality legal services to a small number of clients.  Such lawyers can afford to turn away business, because they are not burdened with an extravagant lifestyle overhead.   More importantly, non-materialistic lawyers are able to charge lower fees.

For the full article on the 15 essential questions that a client must ask before retaining an attorney, see http://www.thumbtack.com/md/germantown/attorney/family-lawyer-business-attorney-and-litigator