Should I have an Arbitration Clause with my Attorney?
Arbitration Clauses Between Attorneys and Clients
Arbitration clauses are increasingly common in attorney–client fee agreements and are generally viewed as more ethically acceptable for resolving fee disputes than malpractice claims. Many bar associations, including Texas, encourage informal dispute resolution mechanisms such as arbitration or mediation to address attorney fee disagreements.
Fee Dispute Arbitration Is Ethically Favored Over Malpractice Arbitration — Bar guidance and professional conduct rules support the use of arbitration to resolve fee disputes, while imposing stricter limits on arbitration clauses that attempt to prospectively limit malpractice liability. Texas ethics rules caution against agreements that restrict malpractice claims unless permitted by law and supported by independent client representation.
Informed Client Consent Is Required for Enforceability — For an arbitration provision to be effective, attorneys must explain the significant advantages and disadvantages of binding arbitration to the extent necessary for the particular client. The required level of disclosure depends on the client’s sophistication, with greater explanation required for individuals and small businesses than for experienced corporate clients.
Eight Key Factors Guide Arbitration Clause Disclosures — Attorneys should consider factors including cost and time savings, waiver of jury trial rights, limits on discovery and evidence rules, restricted appeal rights, privacy, arbitrator selection, and potential arbitration fees. Whether all factors must be addressed depends on the scope and terms of the arbitration provision.
For more information, see our blog post Arbitration Clauses Between Attorneys and Their Clients: The Factors to Consider.
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This article is provided for informational purposes only and does not constitute legal advice. For guidance on specific legal matters under federal, state, or local laws, please consult with our IP Lawyers.
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