Legal Memorandum: Agreement to Pay Attorney's Fees

Issue: Whether an agreement to pay attorney’s fees in an estate matter is enforceable.

As a general matter, an executor’s retainer agreement with an attorney, or similar such agreement to pay attorney’s fees for services performed with regard to closing an estate, will be enforced only if the attorney can “establish that the terms of the agreement were fully and fairly represented to, and understood by, the client and that the agreement in its entirety is fair and reasonable.  In determining reasonableness the Court will consider the circumstances at the time of the agreement as well as the work actually performed by the attorney under the contract.” In re Warhol, 165 Misc. 2d 726, 729, 629 N.Y.S.2d 621, 623 (Sur. Ct. 1995).  This is because “[d]espite the popularity of retainer agreements, they are not enforceable in the same manner as ordinary commercial contracts.”  Id. at 729, 629 N.Y.S.2d at 623.  See In re Estate of Krulish, 130 A.D.2d 959, 516 N.Y.S.2d 149 (4^th Dep’t 1987) (stating rule that as a general matter under New York law, agreements entered into between an attorney and his or her client, as a matter of public policy, are of special concern to courts, and are not always enforceable in the same manner as typical commercial contracts).

Further, in the area of an estate’s accounting, the Surrogate’s Court has special jurisdiction for determining what are reasonable legal fees.  “It is well settled that the Surrogate bears the ultimate responsibility of deciding what constitutes reasonable legal fees, regardless of the existence of […]