Appeals Court Sides with Law Firm in Retainer Agreement Dispute on Legal Fees

By Joe Forward, Legal Writer, State Bar of Wisconsin

Oct. 17, 2012 – A state appeals court recently sided with a Milwaukee-based law firm seeking to recover legal fees under the firm’s “legal representation agreement.”

The law firm of Gimbel, Reilly, Guerin & Brown did substantial legal work for Anne O’Conner over the course of several years, defending her on felony criminal charges and related civil matters. The firm filed an action against O’Conner to recover $7,300 in unpaid legal fees.

After a four-day trial, the trial court ruled against O’Conner, despite her argument that the firm’s retainer agreement contemplated a flat fee, not an hourly rate.

The agreement itself specified that fees would be billed “as new stages are reached in the case.” The agreement also stated that O’Conner would be billed “for all activity of the firm” in connection with the case. However, the agreement did not state that billing would be hourly.

The firm presented evidence that it orally informed O’Conner that legal fees would incur on an hourly basis and sent a letter informing O’Conner of the hourly billing arrangement.

In Gimbel, Reilly, Guerin & Brown v. O’Conner, 2010AP2665 (Oct. 16, 2012), the District I Wisconsin Court of Appeals ruled that the firm’s retainer agreement was ambiguous on the question of hourly billing, but used extrinsic evidence to resolve the dispute.

“Based on the circuit court’s factual findings that the parties intended to enter into a contract that billed for actual hours worked, albeit billed in stages, the circuit court properly ruled that the contract was an enforceable contract for legal services billed an hourly rate,” the court wrote in a per curiam opinion, rejecting numerous claims asserted by O’Conner.