Bar Counsel

Final Reward

Compensating the lawyer/personal representative

By Sylvia Stevens


Lawyers often serve as personal representatives of the estates of their former clients or on request of a probate court in other estates.1 Despite the prevalence of this practice, there appears to be significant confusion about how a lawyer/personal representative should be compensated. Some of the confusion may result from the all-too-common mischaracterization of the lawyer's role. Perhaps because lawyers are accustomed to acting in a representative capacity for a client, lawyers serving as personal representatives occasionally refer to themselves as the personal representative and 'the lawyer for the personal representative' or 'the lawyer for the estate.'

A lawyer acting as personal representative is not a 'lawyer for' anyone, and particularly not for the estate or its beneficiaries. A more accurate characterization is that the lawyer/personal representative is acting pro se in carrying out the duties and responsibilities of the fiduciary role of personal representative.

ORS Chapter 113 endows a personal representative with specific powers and responsibilities, and provides for compensation based primarily on the value of assets under administration, ORS 116.173. A personal representative is authorized in ORS 114.403(18) to employ 'qualified persons' including attorneys to assist in administration of the estate. In the final accounting, the personal representative may be reimbursed from the funds of the estate for the 'reasonable fees' of qualified persons employed by the personal representative. ORS 116.183. In determining the reasonable fees of attorneys, the court is required consider a variety of factors essentially identical to those set out in DR 2-106 and in UTCR 5.080.

The statutes do not offer guidance about how a lawyer/personal representative should be compensated. Is compensation limited to the statutory personal representative's fee? Should compensation be based on the lawyer's customary hourly rate for legal services? Can the lawyer receive both the personal representative fee and legal fees?

Oregon courts have not addressed this question directly and only a handful of cases exist in other jurisdictions. They are, however, instructive.

As a general rule, pro se litigants are not entitled to attorney fees under statutes that allow such awards to prevailing parties, on the premise that such statutes serve to indemnify litigants for the cost of retaining legal counsel and a pro se litigant needs no indemnification. See, e.g., Parquit Corp. v. Ross, 273 Or. 900, 543 P.2d 1070 (1975) (language of ORS 20.096 does not indicate legislative intent to reimburse a prevailing party who has not 'incurred' attorney fees), and Gill v. SAIF Corp. 314 Or. 719, 842 P.2d 402 (1992)(former public employees not entitled to indemnification in absence of evidence they spent any of their own money in defense of legal claims); cf. West v. French, 51 Or.App. 143, 625 P.2d 144 (1981) (award of attorney fees to tenant represented by Legal Aid was consistent with purpose of fee provision to encourage speedy resolution of landlord-tenant disputes).

Courts also generally do not create exceptions to this general rule for a pro se litigant who happens to be a lawyer. In Bischoff v. Bischoff & Strooband, P.C., 121 Or.App. 529, 855 P.2d 1133 (1993), the court denied attorney fees to an injured attorney who prosecuted his own workers' compensation claim on the ground that the statute allowed payment only for legal services performed 'by an attorney on behalf of and at the request of a claimant.' The court found nothing in the statute to suggest that the legislature intended to treat pro se attorneys differently from other pro se claimants. See also, Swenson & Seztke, Chtd. v. Henning, 116 Idaho 199, 774 P.2d 909 (1989) (law firm, acting through one of its members, not entitled to attorney fees in suit against former client, notwithstanding that a pro se lawyer's lost opportunity costs may be more readily quantifiable than those of a nonlawyer pro se litigant).

Despite this general inability of a lawyer acting pro se to recover attorney fees as a prevailing party in litigation, courts appear willing to apply a slightly different analysis when evaluating requests by lawyer/personal representatives for compensation for professional services. In Sherman v. Hagness, 195 Wis.2d 225, 536 N.W.2d 133 (1995), the lawyer/personal representative made application under a statute that allowed the court to award him the executor's commissions or attorney fees, or both if the so directed in the decedent's will. He asked for $100 an hour for all services provided to the estate, without distinguishing services performed as a lawyer from services as a personal representative. The court acknowledged that it might be more efficient and less expensive to have a lawyer act as personal representative, but held that the statute did not authorize a lawyer serving in both capacities to be compensated at the lawyer's usual billing rate for all services. At the same time, the statute was clearly intended to modify the prior rule that limited a lawyer/personal representative's compensation to the executor's commission even if he performed duties that he could have hired another lawyer to perform. Concluding that compensation for legal services should be limited to those of a 'strictly professional character,' the court affirmed the trial court's allowance of executor's commission for services as a personal representative and $100 an hour for legal services.

A similar result was obtained in Estate of Boyle, 1995 WL 716768 (Del. Ch. 1995). There, too, the lawyer/personal representative requested compensation based on his hourly fee for legal services. The court noted that the usual occupation of a court-appointed fiduciary does not generally provide the standard for compensation except where the fiduciary carries out the duties of someone in his profession and carefully documents when he acts as a fiduciary and when he acts as a professional. In other words, 'a lawyer…or other professional person who serves in a fiduciary capacity is to be compensated on the basis of the capacity served in, not on the basis of qualification for other forms of work.' Id. at 1. The court also noted 'the majority rule' that, absent a contrary statutory provision, a personal representative is not entitled to extra compensation for his services as an attorney. Turning to the lawyer/personal representative's petition for fees, the court identified some document drafting that 'arguably required the assistance of an attorney,' but that the majority of the services did not require the special training and skills of an attorney. The lawyer/personal representative's fees were awarded accordingly.

These two cases are certainly not binding on the courts in Oregon.2 However, they offer some useful guidance. No Oregon statute addresses compensation of a personal representative who happens to be a lawyer so, arguably, the 'majority rule' cited in Boyle might apply. Under that rule, compensation would be limited to the personal representative's statutory fee, with nothing 'extra' for services as an attorney. On the other hand, nothing in Oregon's statutory scheme prohibits a court from the more balanced approach taken in Sherman and Boyle that divides the compensation according to the nature of the work performed. What is clearly not permitted is compensation for all services at the lawyer/personal representative's hourly rate for legal services. A lawyer who petitions for such a fee for services as a personal representative risks violating DR 2-106, which prohibits a lawyer from charging or collecting a fee that is 'clearly excessive.' See, e.g., In re Conduct of Potts, 301 Or. 57, 718 P.2d 1363 (1986), in which a lawyer was found to have charged an excessive fee in a probate case where his role was primarily that of 'messenger and public relations man' between the personal representative and the co-counsel law firm, and where there was no evidence that he was exercising legal skill on the client's behalf.

ENDNOTES
1. Lawyers also often serve in other fiduciary roles, such as trustee or conservator. The analysis and discussion in this article may apply to those other situations as well, to some extent.
2. I have found no analogous Oregon cases.

LEGAL ETHICS ASSISTANCE
The Oregon State Bar offers the assistance of its General Counsel's Office to discuss your legal ethics questions. One of the lawyers in General Counsel's Office can help you identify applicable disciplinary rules, point out relevant formal ethics opinions and other resource material, and give you a reaction to your ethics question. The assistance provided is informal, nonbinding and is not confidential. No attorney-client relationship is established between callers and the lawyers employed by the Oregon State Bar. Lawyers seeking confidential legal ethics advice should consult a lawyer of their choice in private practice.

Call the bar at (503) 620-0222 in the Portland metropolitan area or toll-free statewide at (800) 452 8260 and speak with Sylvia Stevens, assistant general counsel, ext. 359, or George Riemer, general counsel, ext. 405. They can also be contacted by e-mail at sstevens@osbar.org or griemer@osbar.org.


ABOUT THE AUTHOR

Sylvia Stevens is assistant general counsel and MCLE administrator of the Oregon State Bar. She can be reached at (503) 620-0222 or (800) 452-8260, ext. 359, or sstevens@ osbar.org.


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