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Attorney Fees Out Of Line


Ask the Real Estate Lawyer: Real Estate Law Q&A

By Ilyce R. Glink and Samuel J. Tamkin

Summary: The writer is billed for the time their attorney, and registered agent, took to copy and mail a letter the writer had already received. Ilyce and Sam discuss registered agents and basic lawyer billing practices.

Q. We changed our real estate business from a partnership to an LLC. Our attorney filed all the paperwork for us and he put his name as the registered Agent.
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We received a notice from the State that we did not pay the correct amount on our 2003 taxes and we immediately sent a check to the Secretary of State for payment in full. The mistake had been made by our CPA.

The problem is that this attorney also received a copy of this notice from the State and forwarded to us. By the time the attorney copied the letter and sent it to us we had already paid the amount due and sent in the corrected information.

This week I received an invoice from the attorney for $122.50 for basically copying a letter (that we also received at the same time he received it) and mailing it to us for follow up. Am I out of line by questioning this invoice for $122.50 for one copy and for an issue that I had already taken care of as soon as we were made aware of the incorrect fee paid? Is this a normal practice by attorneys? If not how do I go about disputing the charges?

A. When you hired this attorney to prepare documents for you, did he discuss why he set himself up as the registered agent for your company? Did he discuss his billing practices with you? On the issue of disputing the charges, you probably need to have a discussion with your attorney and explain to him why you donít feel that you should be paying this bill.

On the other hand, you need to understand that your attorney bills by his time and if he does work on your file, he expects to be paid. Some attorneys may have just given the letter to their secretary to forward on to you. Did your attorney send you a letter along with the notice from the state telling you what to do? Did he spend some time reviewing your file?

Itís worth having a conversation with your attorney. You may find that he or she will write off whatever time was spent and, in the end, not ask you to pay for it.

If you donít want the attorney to be on the file, you will need to file additional papers with the Secretary of State to change the registered agent for your company. In most states you can get the forms from the Secretary of Stateís web site, complete them, sign them and send them in.

But be aware that if you are the registered agent, you will not have a second level of protection in the event notices need to be sent to you.

Some company owners have their accountants act as the registered agents. But if your accountant is the agent, you may have to pay for the time it takes to process your papers from the Secretary of State.

By the way, I donít think it was unusual that the attorney billed you for his time. The only issue is the hourly rate and how much time he spent on the file. Frequently, larger law firms bill on a minimum of quarter hour increments. If your attorneyís hourly rate was $490, he billed you according to his fee schedule. But that should have been disclosed when you hired him.

Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glinkís latest book is The REAL U Guide to Bank Accounts and Credit Cards. This column is distributed by Real Estate Matters Syndicate. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher. If you have questions for Sam and Ilyce, write:Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyceís website




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