As briefly noted above, during our initial conference, we will discuss the fee options available to pay for our services. There are multiple possibilities for fee arrangements and they can always be suited for the particular collection at hand. This may mean an hourly rate in which our time spent working on a case will be specified and billed to the client monthly at an agreed upon hourly rate. Many clients prefer a contingency fee whereby our law firm is employed on a contingent fee basis meaning we are only paid a percentage of any monies we collect on the client’s behalf. In the contingent fee scenario, if we are unable to collect on behalf of the client, the client does not owe us any fee. In certain circumstances, a flat fee arrangement may make the most sense to the client if, for example, the client only wants a demand letter sent or only wants a judgment the client obtained in another state to be domesticated in Texas. We can also agree to a hybrid fee which might mean a reduced hourly fee plus a reduced contingent fee or a flat fee for certain work to be performed plus a reduced contingent fee or any other combination that makes the most sense given the particular circumstances of the debt being collected. The Texas Disciplinary Rules of Professional Conduct require that all fees be reasonable. Further, contingent attorney fee agreements must be in writing and must state the method by which the fee will be calculated, whether percentage fees will vary for cases settled at various stages of the litigation and how litigation expenses are to be deducted from the total recovery.
Although the general rule in Texas is that each party pays its own attorney’s fees, there are exceptions. One such exception is that attorney’s fees are recoverable by the prevailing party in a breach of contract case in Texas by statute. Specifically, Texas Civil Practice & Remedies Coe section 38.001 provides that attorney’s fees are recoverable in lawsuits for (1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract. For commercial collections, the relevant portions of the statute provide for attorney’s fees for suits on sworn account, oral or written contracts and for rendered services and performed labor. This is not a discretionary statute meaning that, assuming the plaintiff’s attorney has complied with all the statutory requirements to obtain the fees and provides the appropriate proof of the fees, the judge does not have discretion in awarding the fees for the cases mentioned above. An award of attorney’s fees under Texas Civil Practice & Remedies Code section 38.001 is available for hourly attorney’s fees as well as contingent fees. The fees are recoverable for work performed before and during trial and may include appellate fees as well. We will seek to recover all fees paid by the client for our representation.