SECTION 41. Fair and reasonable fees. – A lawyer shall charge only fair and reasonable fees.
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;
(h) The character of the engagement, whether limited, seasonal, or otherwise; and
(i) Other analogous factors. (2023 Code of Professional Responsibility and Accountability or CPRA)
“The matter of fees is important, far beyond the mere question of bread and butter involved. Properly attended to, fuller justice is done to both lawyer and client. An exorbitant fee should never be claimed. As a general rule never take your whole fee in advance, nor any more than a small retainer. When fully paid beforehand, you are more than a common mortal if you can feel the same interest in the case, as if something was still in prospect for you, as well as for your client. And when you lack interest in the case the job will very likely lack skill and diligence in the performance. Settle the amount of fee and take a note in advance. Then you will feel that you are working for something, and you are sure to do your work faithfully and well. Never sell a fee note — at least not before the consideration service is performed. It leads to negligence and dishonesty — negligence by losing interest in the case, and dishonesty in refusing to refund when you have allowed the consideration to fail.” – Abraham Lincoln, Collected Works of Abraham Lincoln (https://www.abrahamlincolnonline.org/lincoln/speeches/lawlect.htm)
Under this section, lawyers are required to charge “only fair and reasonable fees.”
The following factors determine what is deemed fair and reasonable:
1) The time spent and the extent of the service rendered or required;
2) The novelty and difficulty of the issues involved;
3) The skill or expertise of the lawyer, including the level of study and experience required for the engagement;
4) The probability of losing other engagements as a result of acceptance of the case;
5) The customary charges for similar services and the recommended schedule of fees, which the IBP chapter shall provide;
6) The quantitative or qualitative value of the client’s interest in the engagement, or the benefits resulting to the client from the service;
7) The contingency or certainty of compensation;
8) The character of the engagement, whether limited, seasonal, or otherwise; and
9) Other analogous factors.
While a lawyer should charge only fair and reasonable fees, no hard and fast rule maybe set in the determination of what a reasonable fee is, or what is not. That must be established from the facts in each case. (Doy Mercantile, Inc. v. AMA Computer College, G.R. No. 155311, March 31, 2004, Per Tinga, J.)
Lijauco v. Terrado, A.C. No. 6317, August 31, 2006, Per Ynares-Santiago, J.:
• Respondent’s claim that the attorney’s fee pertains only to the recovery of complainant’s savings deposit from Planter’s Development Bank cannot be sustained. Records show that he acted as complainant’s counsel in the drafting of the compromise agreement between the latter and the bank relative to LRC Case No. B-2610. Respondent admitted that he explained the contents of the agreement to complainant before the latter affixed her signature. Moreover, the Investigating Commissioner observed that the fee of P70,000.00 for legal assistance in the recovery of the deposit amounting to P180,000.00 is unreasonable. A lawyer shall charge only fair and reasonable fees.
Licudan v. CA, G.R. No. 91958, January 24, 1991, Per Gutierrez, Jr., J.:
• All that the respondent lawyer handled for his deceased sister and brother-in-law was a simple case of partition which necessitated no special skill nor any unusual effort in its preparation. The subsequent case for redemption was admittedly but an offshot of the partition case. Considering the close blood and affinal relationship between the respondent lawyer and his clients, there is no doubt that Atty. Domalanta took advantage of the situation to promote his own personal interests instead of protecting the legal interests of his clients. A careful perusal of the provisions of the contract for professional services in question readily shows that what the petitioners won was a pyrrhic victory on account of the fact that despite the successful turnout of the partition case, they are now practically left with nothing of the whole subject lot won in the litigation. This is because aside from the 121.5 square meters awarded to Atty. Domalanta as attorney’s fees, the said contract for professional services provides that the remaining portion shall pertain to the respondent lawyer’s son by way of usufruct for ten (10) years. There should never be an instance where a lawyer gets as attorney’s fees the entire property involved in the litigation. It is unconscionable for the victor in litigation to lose everything he won to the fees of his own lawyer.
• The respondent lawyer’s argument that it is not he but his son Teodoro M. Domalanta, Jr. who is claiming the usufructuary right over the remaining portion of the subject lot is inaccurate. The records show that the matter of usufruct is tied up with this case since the basis for the said usufructuary right is the contract for professional services the reasonableness of which is being questioned in this petition. We find the ten-year usufruct over the subject lot part and parcel of the attorney’s fees being claimed by the respondent lawyer.
• In resolving the issue of reasonableness of the attorney’s fees, we uphold the time-honoured legal maxim that a lawyer shall at all times uphold the integrity and dignity of the legal profession so that his basic ideal becomes one of rendering service and securing justice, not money-making. For the worst scenario that can ever happen to a client is to lose the litigated property to his lawyer in whom an trust and confidence were bestowed at the very inception of the legal controversy. We find the Contract for Professional Services dated August 30, 1979, unconscionable and unreasonable. The amount of P20,000.00 as attorney’s fees, in lieu of the 121.5 square meters awarded to the respondent lawyer and the ten-year usufructuary right over the remaining portion of 150 square meters by the respondent lawyer’s son, is, in the opinion of this Court, commensurate to the services rendered by Atty. Domalanta.
Ignacio v. Alviar, A.C. No. 11482, July 17, 2017, Per Tijam, J.:
• This is an administrative case filed by complainant Jocelyn Ignacio against respondent Atty. Daniel T. Alviar for violation of Canon 11 , Rule 1.012 of the [old] Code of Professional Responsibility (CPR) for his alleged refusal to refund the amount of acceptance fees…
• In March 2014, respondent was referred to complainant for purposes of handling the case of complainant’s son who was then apprehended and detained by the Philippine Drug Enforcement Agency (PDEA) in Quezon City. Respondent agreed to represent complainant’s son for a stipulated acceptance fee of PhPl00,000. Respondent further represented that he could refer the matter to the Commission on Human Rights to investigate the alleged illegal arrest made on complainant’s son.
• After the initial payments of PhP20,000 and PhP30,000 were given to respondent, the latter visited complainant’s son at the PDEA detention cell. There, respondent conferred with complainant’s son for some 20 minutes. After which, respondent left.
• Respondent, through his secretary, secured from the Office of the Pasay City Prosecutor plain copies of the case records. Respondent also verified twice from the Hall of Justice if the case was already filed in court.10 It was at this time that respondent asked, and was paid, the remaining balance of PhP50,000. Subsequently, respondent filed his notice of appearance as counsel for complainant’s son.11
• Sometime in April 2014, complainant informed respondent that her son’s arraignment was set on April 29, 2014. Respondent, however, replied that he cannot attend said arraignment due to a previously scheduled hearing. He committed to either find a way to attend the hearing or ask another lawyer-friend to attend it for him.
• On April 26, 2014, complainant wrote a 1etter to respondent informing the latter that she had decided to seek the intercession of another lawyer owing to the fact that respondent cannot attend her son’s scheduled arraignment. Complainant then requested that respondent retain a portion of the PhP 100,000 to fairly remunerate respondent for the preparatory legal service he rendered. Respondent denies having received said letter.
• On the date of the arraignment, neither respondent nor his promised alternate, appeared. When asked, respondent replied that he forgot the date of arraignment.
• This incident prompted complainant to write another letter dated May 6, 2014 to respondent, requesting the latter to formally withdraw as counsel and emphasized that respondent’s withdrawal as counsel is necessary so that she and her son can hire another lawyer to take his stead. In said letter, complainant also reiterated her request that a portion of the PhPl00,000 be remitted to them after respondent deducts his professional fees commensurate to the preparatory legal service he rendered.
• When respondent failed to take heed, complainant filed on June 16, 2014, the instant administrative complaint before the Commission on Bar Discipline, Integrated Bar of the Philippines.
• Here, respondent only conferred once with the complainant’s son for 20 minutes, filed his entry of appearance, obtained copies of the case records and inquired twice as to the status of the case. For his efforts and for the particular circumstances in this case, respondent should be allowed a reasonable compensation of PhP3,000. The remainder, or PhP97,000 should be returned to the complainant.