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2013-2014 1
a legal officer. And then after 3 years, the Martial law, but not anymore after the
management saw that you were really end of that era. This is why legal counseling
good so they promoted you as VP for Legal must be based on a given state of facts.
Affairs. That means you are now occupying
an executive position. Are you still going to Adoption of appropriate remedies given by
court? Not necessarily, as you already have law: Appropriate remedies. It must not be
people under you. Now, you become extra-legal remedies. Sometimes when your
President and CEO after some time. And client is pushed against a wall, you are
then after a couple of years, you were forced to think of extra-legal remedies. The
appointed to a government position that use of extra-legal remedies are not
requires 10 years practice of law. Can your necessarily wrong. They are just not what
qualification be questioned? NO. All those was provided for. For example, the use of
years you spent working for the bank, as it dummies (Maam gave the example of a
still involves legal matters, are still considered foreigner who wants to own a land in the
to be a practice of law. So all these acts or Philippines. Use of dummy. You know that it is
work requires legal analysis. not allowed by law, but if nobody questions,
everybody is happy). Of course, you are not
LEGAL COUNSELING, definition. supposed to suggest that to your client. It
may be a solution. But it is not the relief
It is the art of giving advice and information allowed by law. You should tell him that it is
concerning the solution to a legal problem not possible. Foreigners are not allowed to
arising from a given state of facts and the own lands in the Philippines
adaption of appropriate reliefs or remedies
under the law and enforcement of a legal For the satisfaction and enforcement of a
obligation before a judicial or quasi-judicial legal obligation: We know that there must
body. be a legal obligation.
Legal Counseling = Legal writing + Legal in this day and age, members of the bar
Ethics, etc often forget that the practice of law is a
profession and not a business. Lawyering is
not primarily meant to be a money-making
venture, and law advocacy is not a capital
OVERVIEW PRACTICE OF LAW that necessarily yields profits. The gaining of
Legal ethics that branch of moral a livelihood is not a professional but a
science which treats of the duties secondary consideration. Duty to public
which an attorney owes to his client, service and to the administration of justice
to the court, to the bar and to the should be the primary consideration of
public. (ibid., p. 5, citing Jessup, The lawyers, who must subordinate their personal
Professional Ideals of a Lawyer, p. 4) interest or what they owe to themselves. The
practice of law is a noble calling in which
Q: Do you think legal ethics practiced in emolument is a by product, and the highest
1960s is the same as the legal ethics eminence may be attained without making
practiced at present? much money. (Burbe v Magulta, Adm. Case
No. 99-634, June 10, 2002)
A: What is good cannot be changed. What
is bad is bad. Because we are just looking at FACTS:
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 4
Burbe waited. Hasnt heard anything. You do not openly discuss with fellow
Magulta just adviced him that he will file the lawyers.
complaint. Magulta drafted a complaint
and gave it to the client. Corporate cases. You will never know if the
other party is interested in using the
After many visits, Burbe was suspicious. Burbe information.
went to the court to verify status of
complaint.
Clerk of court said nothing filed. Burbe was -If a person... consults a lawyer with a view
angry. to obtaining professional advice or
assistance, and the atty voluntarily permits or
Before that acquiesces with the consultation then the
professional employment is established.
Magulta said that the 25k was a deposit for Likewise, a lawyer-client relationship exists
his appearance fee. Since nag kalabuan not the close personal relationship between
na, I will just return your money. Magulta said the lawyer and the complainant or the non-
thats not the filing fee! (Defense of Magulta) payment of the formers fees.
Hearing of Bar Discipline. Recommended for
the suspension of Magulta.
What will you do with the 25,000 which was
Client-atty relationship, money for filing fee, given as filing fee?
Magulta should not have spent the 25k other
than the filing of the complain. Magulta treated it as deposit.
Magulta suspended for a year. POINT: what does the client want you to do
with the money?
-As we said in Burge v Magulta: A lawyer- Ex. A lot was given to you. Lawyers-
client relationship was established from the Administers of estates. Be careful! Cannot
very first moment complainant asked resp mix different apples in the basket. Do the
for legal advise regarding the formers accounting up to the last centavo.
business. To constitute professional
employment, it is NOT essential that the
client employed the attorney professionally
on any previous occasion. It is not necessary The 25,000 pesos shouldnt have been
that any retainer by paid, promised, or unilaterally appropriated as part of his atty
charged; neither is it material that the fees. He should have filed a complaint.
attorney consulted did not afterward hand
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 5
umbrella of expenses authorized by the Why? Its like bahala na. Maybe someday I
client, you can deduct. After informing the will be congressman as well.
client. Moral of the story: do not play around
with the clients assets. Intelligence funds = UNACCOUNTED!
Story of BMI.
Congressman, 70 MILLION.
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 6
Likewise, a lawyer-client relationship exists firm? Your client or their client? What about
notwithstanding the close personal the confidential information that the client of
relationship between the lawyer and the the other lawyers have revealed to them?
complainant or the nonpayment of the What about the information of your client
formers fees. that you are about to bring to the law firm?
So, therell now be a conflict of interest.
Alright, lets go now to Clients funds and
property. In solo practice, there is usually no conflict of
interest. Magisa ka lang naman e,
So, you are a solo practitioner class and pagkatanong mo sa client na o, sino
then you meet a farmer who goes to you kalaban mo dito? Makikita mo na agad na
and asks for help but the poor farmer has there will be a conflict of interest. You can
nothing to pay you. So he tells you, easily see the parties that are at war, so
Attorney, wala man koy pambayad sa therefore you can only side with one.
imuha, kaning titulo sa akong yuta, pwede Conflicts of Interest, diba would be very
kani akong pambayad sa imo?. Maybe the tricky, in big law offices.
poor farmer is only indebted to you for
probably 50 or 100K, and then his 5 hectare We have under the Code of Professional
land is valued at probably 1 million. No! You Responsibility Rule15.01.
have to be careful when you are entrusted
the land of a farmer. Same goes with the CANON 15 - A LAWYER SHALL OBSERVE
funds, if you convert those funds or CANDOR, FAIRNESS AND LOYALTY IN ALL HIS
appropriate the private property, then it DEALINGS AND TRANSACTIONS WITH HIS
would be a clear violation of our Code of CLIENTS.
Professional Ethics. Now, of course, you may
have a lien on the funds of the client, or Rule 15.01 - A lawyer, in conferring with a
documents or other papers that have come prospective client, shall ascertain as soon as
to your possession. You may retain them until practicable whether the matter would
your fees or disbursements are paid. You involve a conflict with another client or his
have that right that is provided for by law, own interest, and if so, shall forthwith inform
but you have to make sure that all is the prospective client.
accounted for. Therefore, you must have a
good accounting system. So you have the Rule 15.02 - A lawyer shall be bound by the
law practice, you have the substance or the rule on privilege communication in respect
theories, but you also have the operational of matters disclosed to him by a prospective
aspect. Thats why you have a book keeper. client.
class, and then you begin to render service protect the confidentiality of such
to that client, there is a lot of information in document.
the database where all the others can
access. That information would be readily There was one case, she was a legal
available. Everything is in file folders. They assistant. She works for the acquisitions and
want your files to be embedded in the mergers group. Of course, she was
system so that when you run a conflicts preparing some of the documents, and so
check, the result of the check would be a she knew the ups and downs of the
true representation of the actual case file. transaction. She was using this information in
This is very important because when trying to buy stocks of shares. So she was
something arose as a conflict of interest, you investigated, as they were already seeing a
may be sued for malpractice. pattern. It was found that she was doing it.
She contends that I am just part of the
Rule 15.03 - A lawyer shall not represent public who can buy shares of stocks of other
conflicting interests except by written companies. The prosecuting attorney
consent of all concerned given after a full argued that, you were making use of
disclosure of the facts. confidential information to profit or gain
from the production. You have an undue
So, if you have a prospective client that is advantage from the rest of the public
too valuable to lose, and you tell your because you have access to the
managing partner about it. What they transaction.
usually do is to prohibit access of information
Theres also what we call confidentiality slips.
of that particular client, and pinpoint the
These are in the form of a memo that only
names of such people who are granted
these limited people can access the file.
access. So that when the clients information
There are also made to be under oath to
leaks, you already have a list of possible
keep this information confidential.
suspects for such leakage.
Do these apply to government agencies?
In the case of Robert West vs Batacan (?):
YES.
No conflicting duties as that is a rule
founded on public policy. In all aspects, you Lets go to the options for a lawyer. Theres
have to avoid appearances of double duty SOLO PRACTICE, where you become your
especially for people who pay us! own boss. Also, you can be an ASSOCIATE
for a PRIVATE Law Firm or you can be a legal
Another test of the inconsistency of interests
officer in a PUBLIC Corporation. The field is so
is whether the acceptance of a new relation
wide that you can take your pick.
will prevent an attorney from the full
discharge of his duty of undivided fidelity What are the benefits of a SOLO
and loyalty to his client or invite suspicion of practitioner? You are your own boss. You do
unfaithfulness or double-dealing in the not have to log in or out. Your income is
performance thereof, and also whether he based on your own sipag.
will be called upon in his new relation to use
against his first client any knowledge Whats the downside? It does not yield to a
acquired in the previous employment. The lot of clients. No client will go to a lawyer
first part of the rule refers to cases in which without an established reputation. As in all
the opposing parties are present clients professional endeavors, you have to build
either in the same action or in a totally your reputation over the years. There is also
unrelated case; the second part pertains to no extra support when pressed for time. Both
those in which the adverse party against administrative and legal concerns will be
whom the attorney appears is his former burdened by the solo practitioner. So these
client in a matter which is related, directly or are the challenges that await a solo
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 9
owns in the partnership, and what are the employers allow their lawyers to engage in
expectations must be placed in writing. private practice but that is quite rare.
Partnership and private law firms. These In formal law departments, the head lawyer
generally offer better opportunities. It really is referred to as general counsel who carries
depends on the final practice you are into. responsibility as director or officer of
You may form among classmates, friends, corporation. Among general counsels, there
family, etc. Existing partnership usually have have an organization. Usually, the Secretary
the capability to defray overhead costs in of the Board is a general counsel. As they
maintain a law office. You have to make should oversee what is happening inside the
sure though that the articles of partnership company. But if they want a fresh
are implemented to the letter. perspective, they get corporate secretaries
from another law firm.
Comment: Most of the professors next
lecture is all about beautification of your law The head lawyer reports directly to the
office. Get good furniture. Require a dress president. The usual basis of sectioning is the
code to your staff. etc. legal subject matter. You can be head of
the tax division, labor division, litigation or
You must also have a general counsel for insurance.
the partnership. This is for conflicts like
malpractices. The general counsel would Every corporate law department adopts a
tend the relation. He would resolve dispute system by which lawyers work is assigned.
among lawyers themselves, or with clients, The corporate policy must be to comply with
where the reputation of the firm is at stake. the law as the law department construes it
and all officers and other management
You must also have a chief financial officer, employees and all the lawyers in the law
or at least a book keeper, an accountant to department must know this is to be the case.
do your books.
In other words, corporate lawyers are bound
Sometimes, you also have a marketing by the corporate policy. What is the
official. Here in the Philippines, we are not objective? You are working for the
that savvy yet. You must pitch your services. organization.
Its like selling your services. This is not
allowed in our jurisdiction. But sometimes How do you join a corporate law
when there is a specific valuable client you department?
want to get, so you prepare a presentation
wherein you introduce them of the several a. Referrals;
services you offer. Its more of a strategy that b. Recruitments; or
one must consider. In a partnership, there is c. Pluck out of private practice.
usually an expert on each field, theres one Other disadvantages: lesser chance of
who specializes in labor law, and the other doing litigation work, and they do not do
on tax law, family law, and then such lawyer hard legal study and analysis as these are
who actually does the job gets a markup. usually encountered by private practitioners.
What are the positions in a corporate legal
department? In-house counsel, general
counsel, and legal officer. They may get Legal Counselling
outside counsels if theres a need for it. They July 15 4th Meeting
really get help from people who are experts. By Faizah Tejero
If you are a big private law firm, you may get
the chance to travel because that is Legal Officer in Corporate Law Department
considered tax deductible or an operating Disadvantages
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 10
-accessible to public transportation for Every time you work for a file, even if
clients; sufficient client parking. its just for reviewing, you have to
have a record for what you did for the
Filing system (Comment: You have to file. E.g. 1. Read research material for
look up a filing system as your law franchising (Time spent: 1 hour). 2.
office will be filled up with files. How Drafted opinion letter (Time spent: 30
should your files be classified or minutes). So that at the end of the
treated as far as information month, you can present to your client
technology is concerned?) what you have done and he easily
-Lawyer will design the filing system for sees a chronology of the events. The
his easy access; timeline also works as a review for the
-Major categories of files: lawyer himself. You have to track your
Client Files work. This includes every pleading,
Accounting Files communication or conversation done
Administrative Files like text message or long distance
calls, research, etc.)
One-man law office -must contain folders.
-Draw a floor plan. -folders for client contact details;
-Physical set-up decent reception general correspondence; billing sent
area, office for lawyer, conference out to client.
room for interviewing clients in -if litigation file, files for pleadings.
confidence, space for staff, office -number of folders; numbering of
equipment, pantry, supply. bellows.
-shelf with law books and other -color coding of folders (white for
references conveys diligence. general correspondence; red for
(Comment: law books that are billing).
originally bound! Not your
photocopies. J) Accounting files (Comment: This is
-office must be clean (in looks and in important as the law office is a
smell) and organized. It must convey business. Everything must be recorded
an image of professionalism. Tell your so as you would know if this office
employees to look professional. Make made money at the end of the year.
sure that you let them wear shoes. When it comes to money, you must be
There must be observance of proper on top of it. Regardless of the nature
decorum. of your office, you must have a viable
-staff must be polite and language accounting system.)
used must be appropriate (both over -separate from the accounts folder.
the phone or emails, and face to face -office accounting for
conversation with clients). BE the clients/bookkeeping.
example. When you are with your -salaries of staff.
staff, you can be friendly, but not too -accounts receivables/accounts
friendly. This is the same with your payable.
clients. There must always be that -overhead expenses and government
degree of formality, so that there will fees.
be no misinterpreted acts.
-staff must be accommodating. Administrative file
-appropriate furniture (NO TO -Personnel must sign confidentiality
MONOBLOC CHAIRS! J) agreement; number depending on
how efficient the organization should
Client files (Comment: For every client, be.
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 13
longer just type), the first thing she has to do client. Akala niya libre na
is to find a deadline. They are really part of lahat! Para respetuhin
the practice itself. Sometimes the assistant ang charge ninyo.
has a color code. Ex. Red is the very When your client is crying
important. Yellow 2 weeks from now. Its a that is the time you
system that must work for yourself. charge him. When the
client is desperate,
Weekends are very important for lawyers to charge him and he will
unwind. accept the agreement.
Pag nangangailangan,
yes ng yes. Because if he
Electronic Data Bank has already gotten what
he wanted, goodbye
Software for law practitioners atty.
o Supreme court decisions Ikaw nalang bahala
o Word processing CONSIDER ANOTHER
o Billing EMPLOYMENT. You will
o Accounting feed your family chickens
o Office networking and eggs.
o Available software application Paper is clean, ink,
for efficiency bookkeeping subject-verb agreement,
nice letterhead
English speaking assistant
ex. Hi Mr. Cruz welcome
Billing the Client to our office would you
like some coffee? Tea?
Important considerations Wag yung 3in1! Buy a
o Client must feel he is not coffee maker! Except if
overcharged your client demands a
o Determine how valuable the 3in1.
matter is for your client Staff properly dressed.
o Client must feel he gets value Decent, modest,
for his money Dont just send updated. Personable,
you owe me this much. List polite.
down the expenses. Log. Keep Everybody must smell
a record of telephone calls July good. Mag lagay ng
29. Client inquired, response was pabango.
this. 2 days after that, text As long as your client feels
message or email in the middle important.
of the night. You have to be Cups match. Mura lang
compensated for absorbing his yan sa NCCC! Make sure
anger. Compensation for the no chips
bothering. The better presentation
Business Development you have, the client will
you want it charged to also be pleased with
the firm for accounting paying his money
purposes. Starbucks. I will
not pay from my own
pocket. I will charge it to
the client. You charge it Two concepts of attorneys fees
A. Ordinary concept reasonable
to business
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 15
petitioner union, the TRB management and differential to its members, in violation of the
the NLRC of his right to exercise and enforce retainer agreement; and that the
his attorneys lien over the award of holiday challenged resolution of the NLRC is null and
pay differential through a letter dated void,[19] for the reasons hereunder stated.
October 8, 1990.[11]
Although petitioner union concedes that the
Thereafter, on July 2, 1991, private NLRC has jurisdiction to decide claims for
respondent filed a motion before Labor attorneys fees, it contends that the award
Arbiter Lorenzo for the determination of his for attorneys fees should have been
attorneys fees, praying that ten percent incorporated in the main case and not after
(10%) of the total award for holiday pay the Supreme Court had already reviewed
differential computed by TRB at P175,794.32, and passed upon the decision of the NLRC.
or the amount of P17,579.43, be declared as Since the claim for attorneys fees by private
his attorneys fees, and that petitioner union respondent was neither taken up nor
be ordered to pay and remit said amount to approved by the Supreme Court, no
him.[12] attorneys fees should have been allowed
by the NLRC.
The TRB management manifested before
the labor arbiter that they did not wish to Thus, petitioner posits that the NLRC acted
oppose or comment on private without jurisdiction in making the award of
respondents motion as the claim was attorneys fees, as said act constituted a
directed against the union,[13] while modification of a final and executory
petitioner union filed a comment and judgment of the Supreme Court which did
opposition to said motion on July 15, not award attorneys fees. It then cited
1991.[14] After considering the position of decisions of the Court declaring that a
the parties, the labor arbiter issued an decision which has become final and
order[15] on November 26, 1991 granting executory can no longer be altered or
the motion of private respondent, as follows: modified even by the court which rendered
the same.
WHEREFORE, premises considered, it is
hereby ordered that the TRADERS ROYAL On the other hand, private respondent
BANK EMPLOYEES UNION with offices at maintains that his motion to determine
Kanlaon Towers, Roxas Boulevard is hereby attorneys fees was just an incident of the
ordered (sic) to pay without delay the main case where petitioner was awarded its
attorneys fees due the movant law firm, money claims. The grant of attorneys fees
E.N.A. CRUZ and ASSOCIATES the amount of was the consequence of his exercise of his
P17,574.43 or ten (10%) per cent of the attorneys lien. Such lien resulted from and
P175,794.32 awarded by the Supreme Court corresponds to the services he rendered in
to the members of the former. the action wherein the favorable judgment
was obtained. To include the award of the
This constrained petitioner to file an appeal attorneys fees in the main case
with the NLRC on December 27, 1991, presupposes that the fees will be paid by TRB
seeking a reversal of that order.[16] to the adverse party. All that the non-
inclusion of attorneys fees in the award
On October 19, 1994, the First Division of the means is that the Supreme Court did not
NLRC promulgated a resolution affirming the order TRB to pay the opposing party
order of the labor arbiter.[17] The motion for attorneys fees in the concept of damages.
reconsideration filed by petitioner was He is not therefore precluded from filing his
denied by the NLRC in a resolution dated motion to have his own professional fees
May 23, 1995,[18] hence the petition at bar. adjudicated.
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 18
the apparent confusion between and the fees, he did not in any way modify the
conflicting views of the parties. judgment of the Supreme Court.
There are two commonly accepted As an adjunctive episode of the action for
concepts of attorneys fees, the so-called the recovery of bonus differentials in NLRC-
ordinary and extraordinary.[20] In its ordinary NCR Certified Case No. 0466, private
concept, an attorneys fee is the reasonable respondents present claim for attorneys
compensation paid to a lawyer by his client fees may be filed before the NLRC even
for the legal services he has rendered to the though or, better stated, especially after its
latter. The basis of this compensation is the earlier decision had been reviewed and
fact of his employment by and his partially affirmed. It is well settled that a
agreement with the client. claim for attorneys fees may be asserted
either in the very action in which the services
In its extraordinary concept, an attorneys of a lawyer had been rendered or in a
fee is an indemnity for damages ordered by separate action.[21]
the court to be paid by the losing party in a
litigation. The basis of this is any of the cases With respect to the first situation, the remedy
provided by law where such award can be for recovering attorneys fees as an incident
made, such as those authorized in Article of the main action may be availed of only
2208, Civil Code, and is payable not to the when something is due to the client.[22]
lawyer but to the client, unless they have Attorneys fees cannot be determined until
agreed that the award shall pertain to the after the main litigation has been decided
lawyer as additional compensation or as and the subject of the recovery is at the
part thereof. disposition of the court. The issue over
attorneys fees only arises when something
It is the first type of attorneys fees which has been recovered from which the fee is to
private respondent demanded before the be paid.[23]
labor arbiter. Also, the present controversy
stems from petitioners apparent While a claim for attorneys fees may be
misperception that the NLRC has jurisdiction filed before the judgment is rendered, the
over claims for attorneys fees only before its determination as to the propriety of the fees
judgment is reviewed and ruled upon by the or as to the amount thereof will have to be
Supreme Court, and that thereafter the held in abeyance until the main case from
former may no longer entertain claims for which the lawyers claim for attorneys fees
attorneys fees. may arise has become final. Otherwise, the
determination to be made by the courts will
It will be noted that no claim for attorneys be premature.[24] Of course, a petition for
fees was filed by private respondent before attorneys fees may be filed before the
the NLRC when it acted on the money judgment in favor of the client is satisfied or
claims of petitioner, nor before the Supreme the proceeds thereof delivered to the
Court when it reviewed the decision of the client.[25]
NLRC. It was only after the High Tribunal
modified the judgment of the NLRC It is apparent from the foregoing discussion
awarding the differentials that private that a lawyer has two options as to when to
respondent filed his claim before the NLRC file his claim for professional fees. Hence,
for a percentage thereof as attorneys fees. private respondent was well within his rights
when he made his claim and waited for the
It would obviously have been impossible, if finality of the judgment for holiday pay
not improper, for the NLRC in the first differential, instead of filing it ahead of the
instance and for the Supreme Court awards complete resolution. To declare
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 19
Assailing the rulings of the labor arbiter and 1. Assurance that an Associate of the Law
the NLRC, petitioner union insists that it is not Firm shall be designated and be available
guilty of unjust enrichment because all on a day-to-day basis depending on the
attorneys fees due to private respondent Unions needs;
were covered by the retainer fee of
P3,000.00 which it has been regularly paying 2. Legal consultation, advice and render
to private respondent under their retainer opinion on any actual and/or anticipatory
agreement. To be entitled to the additional situation confronting any matter within the
attorneys fees as provided in Part D (Special clients normal course of business;
Billings) of the agreement, it avers that there
must be a separate mutual agreement 3. Proper documentation and notarization
between the union and the law firm prior to of any or all transactions entered into by the
the performance of the additional services Union in its day-to-day course of business;
by the latter. Since there was no agreement
as to the payment of the additional 4. Review all contracts, deeds, agreements
attorneys fees, then it is considered waived. or any other legal document to which the
union is a party signatory thereto but
En contra, private respondent contends that prepared or caused to be prepared by any
a retainer fee is not the attorneys fees other third party;
contemplated for and commensurate to the
services he rendered to petitioner. He 5. Represent the Union in any case wherein
asserts that although there was no express the Union is a party litigant in any court of
agreement as to the amount of his fees for law or quasi-judicial body subject to certain
services rendered in the case for recovery of fees as qualified hereinafter;
differential pay, Article 111 of the Labor
Code supplants this omission by providing for 6. Lia(i)se with and/or follow-up any
an award of ten percent (10%) of a money pending application or any papers with any
judgment in a labor case as attorneys fees. government agency and/or any private
institution which is directly related to any
It is elementary that an attorney is entitled to legal matter referred to the Law Firm.
have and receive a just and reasonable
compensation for services performed at the B. SPECIAL LEGAL SERVICES
special instance and request of his client. As
long as the lawyer was in good faith and 1. Documentation of any contract and
honestly trying to represent and serve the other legal instrument/documents arising
interests of the client, he should have a and/or required by your Union which do not
reasonable compensation for such fall under the category of its ordinary course
services.[26] It will thus be appropriate, at of business activity but requires a special,
this juncture, to determine if private exhaustive or detailed study and
respondent is entitled to an additional preparation;
remuneration under the retainer
agreement[27] entered into by him and 2. Conduct or undertake researches and/or
petitioner. studies on special projects of the Union;
The parties subscribed therein to the 3. Render active and actual participation or
following stipulations: assistance in conference table negotiations
with TRB management or any other third
x person(s), juridical or natural, wherein the
x presence of counsel is not for mere
x consultation except CBA negotiations which
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 20
x
5. Prosecution or defense of any case x
instituted by or against the Union; and, x
6. Represent any member of the Union in The provisions of the above contract are
any proceeding provided that the particular clear and need no further interpretation; all
member must give his/her assent and that that is required to be done in the instant
prior consent be granted by the principal controversy is its application. The P3,000.00
officers. Further, the member must conform which petitioner pays monthly to private
to the rules and policies of the Law Firm. respondent does not cover the services the
latter actually rendered before the labor
C. FEE STRUCTURE arbiter and the NLRC in behalf of the former.
As stipulated in Part C of the agreement, the
In consideration of our commitment to monthly fee is intended merely as a
render the services enumerated above consideration for the law firms commitment
when required or necessary, your Union shall to render the services enumerated in Part A
pay a monthly retainer fee of THREE (General Services) and Part B (Special Legal
THOUSAND PESOS (PHP 3,000.00), payable in Services) of the retainer agreement.
advance on or before the fifth day of every
month. The difference between a compensation for
a commitment to render legal services and
An Appearance Fee which shall be a remuneration for legal services actually
negotiable on a case-to-case basis. rendered can better be appreciated with a
discussion of the two kinds of retainer fees a
Any and all Attorneys Fees collected from client may pay his lawyer. These are a
the adverse party by virtue of a successful general retainer, or a retaining fee, and a
litigation shall belong exclusively to the Law special retainer.[28]
Firm.
A general retainer, or retaining fee, is the fee
It is further understood that the foregoing paid to a lawyer to secure his future services
shall be without prejudice to our claim for as general counsel for any ordinary legal
reimbursement of all out-of-pocket expenses problem that may arise in the routinary
covering filing fees, transportation, business of the client and referred to him for
publication costs, expenses covering legal action. The future services of the
reproduction or authentication of lawyer are secured and committed to the
documents related to any matter referred to retaining client. For this, the client pays the
the Law Firm or that which redound to the lawyer a fixed retainer fee which could be
benefit of the Union. monthly or otherwise, depending upon their
arrangement. The fees are paid whether or
D. SPECIAL BILLINGS not there are cases referred to the lawyer.
The reason for the remuneration is that the
In the event that the Union avails of the lawyer is deprived of the opportunity of
services duly enumerated in Title B, the Union rendering services for a fee to the opposing
shall pay the Law Firm an amount mutually party or other parties. In fine, it is a
agreed upon PRIOR to the performance of compensation for lost opportunities.
such services. The sum agreed upon shall
be based on actual time and effort spent by A special retainer is a fee for a specific case
the counsel in relation to the importance handled or special service rendered by the
and magnitude of the matter referred to by lawyer for a client. A client may have
the Union. However, charges may be several cases demanding special or
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 21
As to the first kind of fee, the Court has had We have already shown that the P3,000.00 is
the occasion to expound on its concept in independent and different from the
Hilado vs. David[29] in this wise: compensation which private respondent
should receive in payment for his services.
There is in legal practice what is called a While petitioner and private respondent
retaining fee, the purpose of which stems were able to fix a fee for the latters promise
from the realization that the attorney is to extend services, they were not able to
disabled from acting as counsel for the other come into agreement as to the law firms
side after he has given professional advice actual performance of services in favor of
to the opposite party, even if he should the union. Hence, the retainer agreement
decline to perform the contemplated cannot control the measure of remuneration
services on behalf of the latter. It is to for private respondents services.
prevent undue hardship on the attorney
resulting from the rigid observance of the We, therefore, cannot favorably consider
rule that a separate and independent fee the suggestion of petitioner that private
for consultation and advice was conceived respondent had already waived his right to
and authorized. A retaining fee is a charge additional fees because of their
preliminary fee given to an attorney or failure to come to an agreement as to its
counsel to insure and secure his future payment.
services, and induce him to act for the
client. It is intended to remunerate counsel Firstly, there is no showing that private
for being deprived, by being retained by respondent unequivocally opted to waive
one party, of the opportunity of rendering the additional charges in consonance with
services to the other and of receiving pay Part D of the agreement. Secondly, the
from him, and the payment of such fee, in prompt actions taken by private
the absence of an express understanding to respondent, i.e., serving notice of charging
the contrary, is neither made nor received in lien and filing of motion to determine
payment of the services contemplated; its attorneys fees, belie any intention on his
payment has no relation to the obligation of part to renounce his right to compensation
the client to pay his attorney for the services for prosecuting the labor case instituted by
for which he has retained him to perform. the union. And, lastly, to adopt such theory
(Emphasis supplied). of petitioner may frustrate private
respondents right to attorneys fees, as the
Evidently, the P3,000.00 monthly fee former may simply and unreasonably refuse
provided in the retainer agreement to enter into any special agreement with the
between the union and the law firm refers to latter and conveniently claim later that the
a general retainer, or a retaining fee, as said law firm had relinquished its right because of
monthly fee covers only the law firms the absence of the same.
pledge, or as expressly stated therein, its
commitment to render the legal services The fact that petitioner and private
enumerated. The fee is not payment for respondent failed to reach a meeting of the
private respondents execution or minds with regard to the payment of
performance of the services listed in the professional fees for special services will not
contract, subject to some particular absolve the former of civil liability for the
qualifications or permutations stated there. corresponding remuneration therefor in
favor of the latter.
Generally speaking, where the employment
of an attorney is under an express valid Obligations do not emanate only from
contract fixing the compensation for the contracts.[31] One of the sources of extra-
attorney, such contract is conclusive as to contractual obligations found in our Civil
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 22
one shall be unjustly enriched or benefited former. Equity and fair play dictate that
at the expense of another. petitioner should pay the same after it
accepted, availed itself of, and benefited
A quasi-contract between the parties in the from private respondents services.
case at bar arose from private respondents
lawful, voluntary and unilateral prosecution We are not unaware of the old ruling that a
of petitioners cause without awaiting the person who had no knowledge of, nor
latters consent and approval. Petitioner consented to, or protested against the
cannot deny that it did benefit from private lawyers representation may not be held
respondents efforts as the law firm was able liable for attorneys fees even though he
to obtain an award of holiday pay benefited from the lawyers services.[35] But
differential in favor of the union. It cannot this doctrine may not be applied in the
even hide behind the cloak of the monthly present case as petitioner did not object to
retainer of P3,000.00 paid to private private respondents appearance before
respondent because, as demonstrated the NLRC in the case for differentials.
earlier, private respondents actual rendition
of legal services is not compensable merely Viewed from another aspect, since it is
by said amount. claimed that petitioner obtained
respondents legal services and assistance
Private respondent is entitled to an regarding its claims against the bank, only
additional remuneration for pursuing legal they did not enter into a special contract
action in the interest of petitioner before the regarding the compensation therefor, there
labor arbiter and the NLRC, on top of the is at least the innominate contract of facio
P3,000.00 retainer fee he received monthly ut des (I do that you may give).[36] This rule
from petitioner. The law firms services are of law, likewise founded on the principle
decidedly worth more than such basic fee in against unjust enrichment, would also
the retainer agreement. Thus, in Part C warrant payment for the services of private
thereof on Fee Structure, it is even respondent which proved beneficial to
provided that all attorneys fees collected petitioners members.
from the adverse party by virtue of a
successful litigation shall belong exclusively In any case, whether there is an agreement
to private respondent, aside from or not, the courts can fix a reasonable
petitioners liability for appearance fees and compensation which lawyers should receive
reimbursement of the items of costs and for their professional services.[37] However,
expenses enumerated therein. the value of private respondents legal
services should not be established on the
A quasi-contract is based on the presumed basis of Article 111 of the Labor Code alone.
will or intent of the obligor dictated by equity Said article provides:
and by the principles of absolute justice.
Some of these principles are: (1) It is ART. 111. Attorneys fees. - (a) In cases of
presumed that a person agrees to that unlawful withholding of wages the culpable
which will benefit him; (2) Nobody wants to party may be assessed attorneys fees
enrich himself unjustly at the expense of equivalent to ten percent of the amount of
another; and (3) We must do unto others the wages recovered.
what we want them to do unto us under the
same circumstances.[33] x x x
In the first place, the fees mentioned here of services rendered or required; (b) the
are the extraordinary attorneys fees novelty and difficulty of the questions
recoverable as indemnity for damages involved; (c) the importance of the subject
sustained by and payable to the prevailing matter; (d) the skill demanded; (e) the
part. In the second place, the ten percent probability of losing other employment as a
(10%) attorneys fees provided for in Article result of acceptance of the proffered case;
111 of the Labor Code and Section 11, Rule (f) the customary charges for similar services
VIII, Book III of the Implementing Rules is the and the schedule of fees of the IBP chapter
maximum of the award that may thus be to which the lawyer belongs; (g) the amount
granted.[39] Article 111 thus fixes only the involved in the controversy and the benefits
limit on the amount of attorneys fees the resulting to the client from the services; (h)
victorious party may recover in any judicial the contingency or certainty of
or administrative proceedings and it does compensation; (i) the character of the
not even prevent the NLRC from fixing an employment, whether occasional or
amount lower than the ten percent (10%) established; and (j) the professional standing
ceiling prescribed by the article when of the lawyer.
circumstances warrant it.[40]
Here, then, is the flaw we find in the award
The measure of compensation for private for attorneys fees in favor of private
respondents services as against his client respondent. Instead of adopting the above
should properly be addressed by the rule of guidelines, the labor arbiter forthwith but
quantum meruit long adopted in this erroneously set the amount of attorneys
jurisdiction. Quantum meruit, meaning as fees on the basis of Article 111 of the Labor
much as he deserves, is used as the basis Code. He completely relied on the
for determining the lawyers professional operation of Article 111 when he fixed the
fees in the absence of a contract,[41] but amount of attorneys fees at P17,574.43.[44]
recoverable by him from his client. Observe the conclusion stated in his
order.[45]
Where a lawyer is employed without a price
for his services being agreed upon, the x x x
courts shall fix the amount on quantum
meruit basis. In such a case, he would be FIRST. Art. 111 of the Labor Code, as
entitled to receive what he merits for his amended, clearly declares movants right to
services.[42] a ten (10%) per cent of the award due its
client. In addition, this right to ten (10%) per
It is essential for the proper operation of the cent attorneys fees is supplemented by
principle that there is an acceptance of the Sec. 111, Rule VIII, Book III of the Omnibus
benefits by one sought to be charged for Rules Implementing the Labor Code, as
the services rendered under circumstances amended.
as reasonably to notify him that the lawyer
performing the task was expecting to be x x x
paid compensation therefor. The doctrine
of quantum meruit is a device to prevent As already stated, Article 111 of the Labor
undue enrichment based on the equitable Code regulates the amount recoverable as
postulate that it is unjust for a person to attorneys fees in the nature of damages
retain benefit without paying for it.[43] sustained by and awarded to the prevailing
party. It may not be used therefore, as the
Over the years and through numerous lone standard in fixing the exact amount
decisions, this Court has laid down payable to the lawyer by his client for the
guidelines in ascertaining the real worth of a legal services he rendered. Also, while it
Legal Counseling || Transcribed by Renan Lasala and Faizah Tejero || 3 Manresa S.Y. 2013-2014 24
in the case at bar, involving a conflict compensation for services actually rendered
between lawyer and client, to observe the in a case in the absence of proof to the
above guidelines in cases calling for the contrary.
operation of the principles of quasi-contract
and quantum meruit, and to conduct a The basis for the compensation would be
hearing for the proper determination of quasi-contract. (See Royal Traders Bank
attorneys fees. The criteria found in the above).
Code of Professional Responsibility are to be
considered, and not disregarded, in Sebreno vs CA; June 8, 1995; The measure of
assessing the proper amount. Here, the compensation for private respondents
records do not reveal that the parties were services as against his client should properly
duly heard by the labor arbiter on the be addressed by the rule of quantum meruit
matter and for the resolution of private long adopted in this jurisdiction. Quantum
respondents fees. Meruit, meaning as much as he deserves.
This is used as the basis for determining the
It is axiomatic that the reasonableness of lawyers professional fee in the absence of a
attorneys fees is a question of fact.[46] contract, but recoverable by him from his
Ordinarily, therefore, we would have client.
remanded this case for further reception of
evidence as to the extent and value of the Guidelines in ascertaining the real worth of a
services rendered by private respondent to lawyers sercives (Rule 20.01, Canon 20 of
petitioner. However, so as not to needlessly the Code of Professional Responsibility) and
prolong the resolution of a comparatively should be considered in fixing a reasonable
simple controversy, we deem it just and compensation for services rendered by a
equitable to fix in the present recourse a lawyer on the basis of Quantum Meruit.
reasonable amount of attorneys fees in
favor of private respondent. For that These are:
purpose, we have duly taken into account a.) Importance of the subject matter;
the accepted guidelines therefor and so b.) Novelty and difficulty of the questions
much of the pertinent data as are extant in involved;
the records of this case which are assistive in c.) Skill demanded;
that regard. On such premises and in the d.) Probability of losing other employment
exercise of our sound discretion, we hold as a result of acceptance of the
that the amount of P10,000.00 is a preferred case;
reasonable and fair compensation for the e.) Customary charges for similar services
legal services rendered by private and the schedule of fees of the IBP
respondent to petitioner before the labor chapter to which the lawyer belongs;
arbiter and the NLRC. f.) The amount involved in the
controversy and the benefits resulting
WHEREFORE, the impugned resolution of to the client for services;
respondent National Labor Relations g.) Time spent and the extent of services
Commission affirming the order of the labor rendered or required;
arbiter is MODIFIED, and petitioner is hereby h.) Contingency or certainty of
ORDERED to pay the amount of TEN compensation;
THOUSAND PESOS (P10,000.00) as attorneys i.) Character of the employment,
fees to private respondent for the latters whether occasional or established;
legal services rendered to the former. j.) Professional standing of the lawyer.