ADMISSION TO PRACTICE LAW

Practice of law - this concept means any activity, in or out of court, which requires the application of
law, legal procedure, knowledge, training and experience. To engage in the practice of law is to perform
those acts which are characteristics of the profession. Generally, to practice law is to give notice or render
any kind of service, which device or service requires the use in any degree of legal knowledge or
skill. (Cayetano vs. Monsod, 201 SCRA 210, September 3, 1991).

Who are entitled to the practice of law?

1. Any person duly admitted as a member of the bar

2. After being admitted to the bar, one who is in good and regular standing (Sec. 1, Rule 138, RRC)

Qualifications for admission to the bar

1. Citizen of the Philippines;

2. At least 21 years of age;
3. Of good moral character;
4. Resident of the Philippines;
5. Must produce before the Supreme Court satisfactory evidence of good moral character; and,
6. No charges against him, involving moral turpitude, having been filed or are pending in any court
in the Philippines (Sec. 2, Rule 138, RRC)
7. Satisfactorily complied the academic requirements:
a. Pursued and satisfactorily completed in an authorized and recognized university or college,
requiring completion of a 4-year high school course, course of study for a bachelor’s degree
in arts or sciences
b. Show that he has regularly studied law for four years and successfully completed all
prescribed courses, in a law school (Secs. 5 & 6 , Rule 138, RRC)
8. Pass the Bar Examinations (Secs. 7-16, Rule 138, RRC)
9. Take the Lawyer’s Oath (Sec. 17, Rule 138, RRC)
10. Certificate of membership given by the Clerk of Court of the Supreme Court (Sec. 18, Rule 138,
RRC)
11. Sign the Roll of Attorneys (Sec. 19, Rule 138, RRC)

Note: A successful bar candidate who was allowed to sign by the Clerk of the SC to sign in the Roll
of the Attorney’s but was unable to take an oath although he has paid his IBP dues and listed as
“qualified voter” in IBP affairs, cannot be admitted to the Bar. (In re: Elmo S. Abad, B.M. No. 139,
March 18, 1983)

Moreover, oath alone will not make a bar passer a full-fledged member of the bar, he must also sign the
Roll of Attorneys. (Aguirre vs. Rana, B.M. No. 1036, June 10, 2003)].

General Coverage of Practice of Law (three principal types)

1. Legal advice and instructions to clients to inform them of their rights and obligations;
2. Preparation for clients of documents requiring knowledge of legal principles not possessed by
ordinary layman;
 3. Appearance for clients before public tribunals.

Continuing requirements for the practice of law

1. Good and Regular Standing (Sec. 1, Rule 138, RRC);

2. Membership in the IBP;
3. Payment of IBP Dues;
4. Payment of Professional Tax;
5. Compliance with the MCLE; and
6. Possession of Good Moral Character.

Note: Membership in the IBP is mandatory. It is not a violation of his freedom to associate.(In re:
Edillon, A.M. No. 1928, August 3, 1978)

In the payment of IBP dues, lawyers who are senior citizens are NOT exempted from the payment of
dues. Republic Act 7432 or the Senior Citizens Act in its exemption from payment of income tax, it
does not include payment of membership or association dues of the IBP. (Santos, Jr. v. Llamas, A.C.
No. 4749, January 20, 2000).

The requirement of good moral character is not only a condition precedent to admission to the
practice of law. Its continued possession is also essential for remaining in the practice of law. (In the
Matter of the Disqualification of Bar Examinee Haron S. Meling in the 2002 Bar Examinations, B.M.
No. 1154, June 8, 2004)

Public Officials who cannot Practice Law in the Philippines

1. Judges and other officials as employees of the Supreme Court;

2. Officials and employees of the OSG;
3. Government prosecutors;
4. President, Vice-President, members of the cabinet, their deputies and assistants;
5. Members of the Constitutional Commission;
6. Members of the Judical Bar Council;
7. Ombudsman and his deputies;
8. All governors, city and municipal mayors;
9. Those prohibited by special law.

LAW STUDENT PRACTICE RULE

A. RULE 138-A; RULES OF COURT

I. Conditions for Student Practice (Sec. 1)

A law student who has successfully completed his 3rd year of the regular four-year prescribed law
curriculum and is enrolled in a recognized law school's clinical legal education program approved by the
Supreme Court, may appear without compensation in any civil, criminal or administrative case before any
trial court, tribunal, board or officer, to represent indigent clients accepted by the legal clinic of the law
school.

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II. Appearance (Sec. 2)
The appearance of the law student authorized by this rule, shall be under the direct supervision and
control of a member of the Integrated Bar of the Philippines duly accredited by the law school. Any and
all pleadings, motions, briefs, memoranda or other papers to be filed, must be signed by the supervising
attorney for and in behalf of the legal clinic.

o In Bar Matter No. 730 (13 June 10 1998), the Supreme Court held that a law student appearing
before the Regional Trial Court under Rule 138-A should at all times be accompanied by a
supervising lawyer.

The records show that the plaintiff in civil Case No. BCV-92-11 (Irene A.
Caliwara v. Roger T. Catbagan, RTC of Bacoor, Cavite) was represented by Mr.
Cornelio Carmona, Jr., an intern at the Office of Legal Aid, UP-College of Law
(UP-OLA). Mr. Carmona conducted hearings and completed the presentation of
the plaintiff's evidence-in-chief without the presence of a supervising lawyer.
Justice Barredo questioned the appearance of Mr. Carmona during the hearing
because the latter was not accompanied by a duly accredited lawyer. On
December 15, 1994, Presiding Judge Edelwina Pastoral issued an Order
requiring Mr. Carmona to be accompanied by a supervising lawyer on the next
hearing. In compliance with said Order, UP-OLA and the Secretary of Justice
executed a Memorandum of Agreement directing Atty. Catubao and Atty.
Legayada of the Public Attorney's Office to supervise Mr. Carmona during the
subsequent hearings.

Justice Barredo asserts that a law student appearing before the trial court under
Rule 138-A should be accompanied by a supervising lawyer. On the other hand,
UP-OLA, through its Director, Atty. Alfredo F. Tadiar, submits that "the matter
of allowing a law intern to appear unaccompanied by a duly accredited
supervising lawyer should be . . . left to the sound discretion of the court after
having made at least one supervised appearance."

o The phrase direct supervision and control requires no less than the physical presence of the
supervising lawyer during the hearing. This is in accordance with the threefold rationale behind
the Law Student Practice Rule, to wit:
1. to ensure that there will be no miscarriage of justice as a result of incompetence or
inexperience of law students, who, not having as yet passed the test of professional
competence, are presumably not fully equipped to act as counsels on their own;
2. to provide a mechanism by which the accredited law school clinic may be able to protect
itself from any potential vicarious liability arising from some culpable action by their law
students; and
3. to ensure consistency with the fundamental principle that no person is allowed to practice a
particular profession without possessing the qualifications, particularly a license, as required
by law. (Bar Matter No. 730)

o Can the matter of allowing a law student to appear before the court unaccompanied by a
supervising lawyer be left to the discretion of the presiding judge?

No. The matter of allowing a law student to appear before the court unaccompanied by a
supervising lawyer cannot be left to the discretion of the presiding judge. The rule clearly states
that the appearance of the law student shall be under the direct control and supervision of a
member of the Integrated Bar of the Philippines duly accredited by law schools. The rule must be

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 strictly construed because public policy demands that legal work should be entrusted only to
those who possess tested qualifications, are sworn to observe the rules and ethics of the legal
profession and subject to judicial disciplinary control.

The Law Student Practice Rule is only an exception to the rule. Hence, the presiding judge should
see to it that the law student appearing before the court is properly guided and supervised by a
member of the bar. (Bar Matter No. 730)

o Exception to the exception

The rule, however, is different if the law student appears before an inferior court, where the issues
and procedure are relatively simple. In inferior courts, a law student may appear in his personal
capacity without the supervision of a lawyer.

Sec. 34, Rule 138 provides that in the court of a justice of the peace a party may conduct his
litigation in person, with the aid of an agent or friend appointed by him for the purpose, or with
the aid an attorney. In any other court, a party may conduct his litigation personally or by aid of
an attorney, and his appearance must be either personal or by a duly authorized member of the
bar.

Thus, a law student may appear before an inferior court as an agent or friend of a party without
the supervision of a member of the bar. (Bar Matter No. 730)

III. Privileged Communications (Sec. 3)

The Rules safeguarding privileged communications between attorney and client shall apply to similar
communications made to or received by the law student, acting for the legal clinic. (Sec. 3, Rule 138-A)

IV. Standards of Conduct and Supervision (Sec. 4)

The law student shall comply with the standards of professional conduct governing members of the Bar.
Failure of an attorney to provide adequate supervision of student practice may be a ground for
disciplinary action. (Sec. 4, Rule 138-A)

B. A.M. NO. 19-03-24-SC, 25 June 2019 – Amendment to the provisions of Rule 138-A
(This rule shall take effect at the start of Academic Year 2020-2021 following its publication in two (2)
newspapers of general circulation)

I. Coverage (Sec. 1)
The limited practice of law covers:
1. Appearances;
2. Drafting and submission of pleadings and documents before trial and appellate courts and quasi-
judicial and administrative bodies;
3. Assistance in mediation and other alternative modes of dispute resolution, legal counseling and
advice; and
4. Such other activities that may be covered by the Clinical Legal Education Program of the law school.

II. Eligibility Requirements of Law Student Practitioners and Practice Areas of Law Student
Practitioners (Secs. 3 and 4)

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No law student shall be permitted to engage in any of the activities under the Clinical Legal Education
Program of a law school unless the law student has applied for and secured the following certifications:

Eligibility1 Practice Areas2

Level 1 Certification 1. Interview prospective clients;
- For law students who have 2. Give legal advice to the client;
successfully completed their first- 3. Negotiate for and on behalf of the client;
year law courses. 4. Draft legal documents such as affidavits, compromise
agreements, contracts, demand letter, position papers, and
the like;
5. Represent eligible parties before quasi-judicial or
administrative bodies;
6. Provide public legal orientation; and
7. Assist in public interest advocacies for policy formulation
and implementation.

Level 2 Certification 1. Perform all activities under Level 1 Certification;

- For law students currently
enrolled for the second semester
of their third-year law courses:
Provided however, where a
student fails to complete all their
third-year law courses, the Level
2 certification shall be deemed
automatically revoked.
- The Level 2 Certification shall be
valid before all courts, quasi-
judicial and administrative
bodies. (Sec. 5)
2. Assist in the taking of depositions and/or preparing
judicial affidavits of witnesses;
3. Appear on behalf of the client at any stage of the
proceedings or trial, before any court, quasi-judicial or
administrative body;
4. In criminal cases, subject to the provisions of Section 5,
Rule 110 of the Rules of Court, to appear on behalf of a
government agency in the prosecution of criminal actions;
and
5. In appealed cases, to prepare the pleadings required in the
case.

III. Certification Application Requirements (Sec. 5)

Law Student Law School Exec. Judge of RTC

Level 1 - submit a duly- - through the dean or - shall evaluate, approve, and
Certification* accomplished the authorized issue the certification within
application representative, shall ten (10) days from receipt of
form under submit to the Office of the application
oath in three the Executive Judge of
(3) copies the Regional Trial
- payment of the Court (RTC) having
necessary legal jurisdiction over the
and filing fees territory where the law
school is located, the
duly-accomplished
application form
- endorsement under

1
The certification issued shall be valid until the student has completed the required number of courses in the clinical
legal education program to complete the law degree, unless sooner revoked. (Sec. 3)
2
Subject to the supervision and approval of a supervising lawyer. (Sec. 4)

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 oath
* The Level 1 Certification shall be valid before all courts, quasi-judicial and administrative bodies
within the judicial region where the law school is located.

Level 2 1. submit a duly- 1. through the dean or 1. Within ten (10) days from
Certification** accomplished the authorized receipt of the application, the
application representative, shall Executive Judge of the RTC
form under submit to the Office of shall:
oath in three the Executive Judge of a. evaluate the application
(3) copies the Regional Trial together with its
2. payment of the Court (RTC) having attachments, and
necessary legal jurisdiction over the b. recommend to the Office
and filing fees territory where the law of the Court
school is located, the Administrator (OCA) the
duly-accomplished approval and issuance of
application form the certification.
2. endorsement under
oath 2. If the Executive Judge finds
the application to be
incomplete, the law school
shall be notified and required
to comply with the
requirements within five (5)
days from receipt of notice.
** The Level 2 Certification shall be valid before all courts, quasi-judicial and administrative bodies.

IV. Qualification of Supervising Lawyers (Sec. 10)

A supervising lawyer under this Rule shall be a member of the bar in good standing.

V. Duties of Law Student Practitioners (Sec. 6)

Acting under a certification, the law student practitioner shall:
1. Observe the provisions of Section 24(b), Rule 130 of the Rules of Court;
2. Be prohibited from using information acquired in one's capacity as a law student practitioner for
personal or commercial gain;
3. Perform the duties and responsibilities to the best of one's abilities as a law student practitioner; and
4. Strictly observe the Canons of the Code of Professional Responsibility.

VI. Use of Law Student Practitioner's Name (Sec. 7)

A law student practitioner may sign briefs, pleadings, letters, and other similar documents which the
student has produced under the direction of the supervising lawyer, indicating the law student
practitioner's certificate number as required under this Rule.

VII. Duties of Law Schools (Sec. 9)

The law school, through its dean or authorized representative, must:
1. Develop and adopt a Clinical Legal Education Program;
2. Develop and establish at least one law clinic in its school;

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3. Endorse qualified students for certification as law student practitioner under this Rule. Such
endorsement shall constitute as a certification that the dean or authorized representative knows that
the applicant is a student enrolled in the Clinical Legal Education course, possesses good moral
character, and has met the requirements of Section 3 of this Rule; and
4. Ensure compliance by law student practitioners and supervising lawyers with the Code of
Professional Responsibility.

VIII. Duties of Supervising Lawyers (Sec. 11)

The following are the duties of a supervising lawyer:
1. Supervise such number of certified law student practitioners as far as practicable;
2. Personally appear with the law student practitioner in all cases pending before the second-level courts
and in all other cases the supervising lawyer determines that his or her presence is required;
3. Assume personal professional responsibility for any work performed by the certified law student
practitioner while under his or her supervision;
4. Assist and advise the certified law student practitioner in the activities authorized by these rules and
review such activities with the certified law student practitioner, all to the extent required for the
proper practical training of the certified law student practitioner and the protection of the client;
5. Read, approve, and personally sign any pleadings, briefs or other similar documents prepared by the
certified law student practitioner prior to the filing thereof, and read and approve any documents
which shall be prepared by the certified law student practitioner for execution by the eligible party;
and
6. Provide the level of supervision to the certified law student practitioner required by these rules.

C. Sanction for practice or appearance without authority (non-lawyers)

I. Indirect Contempt to be Punished After Charge and Hearing (Sec. 3 (e), Rule 71)
The person appearing in court without authority shall be punished for indirect contempt after charge and
hearing. After a charge in writing has been filed, and an opportunity given to the respondent to comment
thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person
guilty of any of the following acts may be punished for indirect contempt for assuming to be an attorney
or an officer of a court, and acting as such without authority.

II. Sanctions (Sec. 13, Rule 138-A)

o Without prejudice to existing laws, rules, regulations, and circulars, the following shall be
considered as unauthorized practice of law by a certified law student practitioner:
1. Engaging in any of the acts provided in Section 4 of this Rule without the necessary
certification or without the consent and supervision of the supervising lawyer;
2. Making false representations in the application for certification;
3. Using an expired certification to engage in the limited practice of law under this Rule;
4. Rendering legal services outside the scope of the practice areas allowed under Section 4 of
this Rule;
5. Asking for or receiving payment or compensation for services rendered under the Clinical
Legal Education Program as provided in this Rule; and
6. Such other analogous circumstances.

o Unauthorized practice of law shall be a ground for revocation of the law student practitioner's
certification and/or disqualification for a law student from taking the bar examination for a period
to be determined by the Supreme Court.

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 o The above provisions notwithstanding, any act constituting a violation of the Code of
Professional Responsibility shall subject the supervising lawyer, Clinical Legal Education
Program Head, and/or law school dean to disciplinary action, as the circumstances may warrant.

SOLICITATION OF LEGAL SERVICES

Law is a profession and not a trade.

The legal profession is not a business. It is not a money-making trade similar to that of a businessman
employing a strategy for the purpose of monetary gain. It is a sacred profession imbued with public
interest whose primary objective is public service, as it is an essential part in the administration of justice
and a profession in pursuit of which pecuniary reward is considered merely incidental.

RULE 2.03, CANON 2

A lawyer shall not do or permit to be done any act designated primarily to solicit legal business.

Rationale behind the rule that legal profession is not considered as a business (2006 Bar)

It is not a business because it is a:

1. Duty of public service, of which the emolument is a byproduct, and in which one may attain the
highest eminence without making much money;
2. Relation, as an “officer of the court”, to the administration of justice involving thorough sincerity,
integrity and reliability;
3. Duty of public service;
4. Relation to clients with the highest degree of fiduciary; and
5. Relation, to the colleagues at the bar, characterized by candor, fairness, and unwillingness to resort
to current business methods of advertising and encroachment on their practice, or dealing directly
with their clients.

Advertisements

General Rule: Advertisement by lawyers is NOT allowed. The most worthy and effective advertisement
possible is the establishment of a well-merited reputation for professional capacity and fidelity to trust.

Exceptions:
1. Reputable Law lists, in a manner consistent with the standards of conduct imposed by the canons,
of brief biographical and informative data;
2. Advertisements or simple announcement of the Existence of a lawyer or his law firm posted
anywhere where it is proper such as his place of business or residence except courtrooms and
government buildings;
3. Ordinary, simple Professional Card. It may contain only a statement of his name, the name of the
law firm which he is connected with, address, telephone number and the special branch of law
practiced;
4. A simple announcement of the Opening of a law firm or of changes in the partnership, associates,
firm name or office address, being for the convenience of the profession;
5. Advertisements or announcement in any Legal publication, including books, journals, and legal
magazines and in telephone directories;

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 6. Writing legal Articles;
7. Engaging in Business and other occupations except when such could be deemed improper, be
seen as indirect solicitation or would be the equivalent of a law practice;
8. Activity of an association for the purpose of legal representation;
9. Notice to other local lawyers and publishing in a legal journal of one’s availability to act as an
associate for them;
10. Seeking a Public office, which can only be held by a lawyer or, in a dignified manner, a position
as a full time corporate counsel; and
11. Listing in a phone Directory, but not under a designation of a special branch of law

For solicitation to be proper, it must be compatible with the dignity of the legal profession. If made in a
modest and decorous manner, it would bring no injury to the lawyer or to the bar (Pineda, 2009).

Rationale for the Prohibition of Advertisements

1. The profession is primarily for public service;

2. Commercializes the profession;
3. Involves self-praise and puffing;
4. Damages public confidence; and
5. May increase lawsuits and result in needless litigation.

Examples of indirect solicitation

1. Writing and selling for publication articles of general nature on legal subjects; and
2. Writing unsolicited articles on a legal subject.

If engaged in another profession or occupation concurrently with the practice of law, the lawyer shall
make clear to his client whether he is acting as a lawyer or in another capacity.

ATTORNEY’S FEES

Two Concepts of Attorney’s Fees

Ordinary
An attorney’s fee is the reasonable
compensation paid to a lawyer for the legal
services he has rendered to a client
The basis of this compensation is the fact of
employment by the client
Extraordinary
An attorney’s fee is an indemnity for damages
ordered by the court to be paid by the losing
party to the prevailing party in the litigation
The basis is any of the causes authorized by
law and is payable not to the lawyer but to the
client - unless they have agreed that the award
shall pertain to the lawyer as additional
compensation or as part thereof.

General Rule: A lawyer has the right to have and recover from his client a fair and reasonable
compensation for his services

Exception: In cases where the lawyer has agreed to render service gratuitously or has been appointed
counsel de oficio

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Requisites for the Right to Attorney’s Fees to Accrue

The right of a lawyer to a reasonable compensation for his services requires the existence of an
attorney-client relationship and the rendition by the lawyer of services to the client.

Attorney-Client Relationship

No formal contract is necessary to effectuate employment. Once there is a meeting of the minds
between the lawyer and client on the case or subject to be handled and the consideration therefor, the
lawyer is deemed employed even if no acceptance fee is paid yet.

Implied Contract of Employment

The contract is implied when there is no agreement, whether oral or express, but the client
allowed the lawyer to render legal services not intended to be gratuitous without objection, and the client
is benefitted by reason thereof. There is an implied promise to pay reasonable attorney’s fees on the
principle that the client shall not be allowed to enrich himself at the expense of the lawyer.

If a person, in respect to his business affairs ro troubles of any kind, consults with his attorney in
his professional capacity with the view of obtaining professional advice or assistance, and the attorney
voluntarily permits or acquiesces in such consultation, then the professional employment must be
regarded as established.. ( Junio v. Grupo, 372 SCRA 525)

An Unauthorized Counsel is not Entitled to Attorney’s Fees

A lawyer who rendered services to a party who did not employ him nor authorize his employment, cannot
recover compensation even if his services redounded to the benefit of such party. (Orosco v. Hernaez, 1
Phil 77)

Advantages of a Written Contract for Attorney’s Fees

1. An express valid contract stipulating for the compensation which the attorney is to receive for his
services is generally conclusive as to the amount of compensation.
2. In case of unjustified dismissal of an attorney, he shall be entitled to recover from the client full
compensation stipulated in the contract.

Ambiguities in Contract

In the interpretation of ambiguities in a contract of attorney’s fees, that interpretation which is favourable
to the client will be adopted.

Kinds of Payment Which May Be Stipulated

The client may stipulate with his counsel to pay him either:

a. A fixed or absolute fee which is payable regardless of the result of the case;
b. A contingent fee that is conditioned to the securing of a favorable judgment and recovery of
money or property and the amount of which may be on a percentage basis;
c. A fixed fee payable per appearance;
d. A fixed fee computed by the number of hours spent;
e. A fixed fee based on a piece of work

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Retainer – the act of the client by which he employs a lawyer to manage for him a cause to which he is a
party, or otherwise t advise him as counsel. It also refers ti a fee which the client pays his attorney whom
he retains, that is, the retaining fee.

Kinds of Retaining Agreements on Attorney’s Fees

1. General Retainer – is the fee paid to a lawyer to secure his future services as general counsel for
any ordinary legal problem that may arise in the routinary business of the client and referred to
him for legal action. The future services of the lawyer are secured and committed to the retaining
client. For this, the client pays the lawyer a fixed retainer fee which could be monthly or
otherwise depending upon their arrangement. The fees are paid whether or not there are cases
referred to a lawyer. The reason for the remuneration is that the lawyer is deprived of the
opportunity of rendering services for a fee to the opposing party or other parties. In fine, it is a
compensation for lost opportunity.
2. Special Retainer – is a fee for a specific case handled or special service rendered by the lawyer
for a client. A client may have several cases. If for every case there is a separate and independent
contract for attorney’s fees, each fee is considered a special retainer.

Attorney’s Fees to be Justified, Its Reason Must be Mentioned in the Text of the Decision

The accepted rule is that the reason for the award of attorney’s fees must be stated in the text of the
court’s decision, the same must disallowed on appeal. The award of attorney’s fees being an exception
rather than the general rule, it is necessary for the court to make findings of facts and law that would bring
the case within the exception and justify the grant of such award.

Quantum Meruit – means as much as the lawyer deserves or such amount which his services merit

Recovery of attorney’s fees on the basis of quantum meruit is authorized:

1. When there is no express contract for the payment of attorney’s fees;

2. When although there is a formal contract for attorney’s fees, the fees stipulated are found
unconscionable or unreasonable by the court;
3. When the contract for attorney’s fees is void due to purely formal defects of execution;
4. When the lawyer, for justifiable cause, was not able to finish the case to its conclusion;
5. When the lawyer and the client disregard the contract for attorney’s fees;
6. When the client dismissed his counsel before the termination of the cse or the latter withdrew
therefrom for valid reasons.

Guides in Determining Attorney’s Fees on Quantum Meruit

Rule 20.01 - A lawyer shall be guided by the following factors in determining his fees:
(a) The time spent and the extent of the service rendered or required;
(b) The novelty and difficulty of the questions involved;
(c) The importance of the subject matter;
(d) The skill demanded;
(e) The probability of losing other employment as a result of acceptance of the proffered case;
(f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he
belongs;
(g) The amount involved in the controversy and the benefits resulting to the client from the service;

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 (h) The contingency or certainty of compensation;
(i) The character of the employment, whether occasional or established; and
(j) The professional standing of the lawyer.

Contingency fee/Certainty of compensation- a contingent fee contract is one which stipulates that the
lawyer will be paid for his legal services only if the suit or litigation ends favourably to the client.

Contingent fee is not per se prohibited by law. It is valid if it is reasonable based upon the circumstances
of the case. In a case where the lawyer employed on contingent basis dies or becomes disabled before the
final adjudication or settlement of the case has been obtained, he or his estate will be allowed to recover
the reasonable value of the services rendered. The recovery will be allowed only after successful
termination of the litigation in the client’s favor.

In the case of Director of Lands vs Ababa, the petitioners contend that a contract for a contingent fee
violates the Canons of Professional Ethics. The Court ruled that while Canon 10 prohibits a lawyer from
purchasing any interest in the subject matter of the litigation which he is conducting, Canon 13, on the
other hand, allows a reasonable contingent fee contract subject to the supervision of a court, as to its
reasonableness.

The Court also pronounced in the case of Law Firm of Arnovit vs. CA that the initial fees and subsequent
fees paid during the progress of the litigation are independent of the contingent fees.

Champertous Contract- is one where the lawyer stipulates with his client that in the prosecution of the
case, he will bear all the expenses for the recovery of things or property being claimed by the client, and
the latter agrees to pay the former a portion of the thing or property recovered as compensation. A
champertous contract is void for being contrary to public policy and Canon 42 of the Canons of
Professional Ethics.

It differs from a contingent fee in that, a contingent fee may be paid in cash, whereas, a champerty can be
paid only in kind.

Professional Standing of the Lawyer- the professional standing of a lawyer is measured by his skill and
competency as shown by the result of his work. In determining attorney’s fees, the professional standing
of the lawyer is considered.

When is a fee considered reasonable?

- While there is no hard and fast rule which could be utilized to determine the reasonableness of
attorney’s fees, the fee is reasonable if it is within the capacity of the client to pay, and is directly
commensurate with the value of the legal services offered.
When is a fee unconscionable?

- To be unconscionable, the amount if compared to the value of the services rendered must be
clearly disproportionate as to be revolting to the conscience. It is also considered unconscionable
if the fees are affront one’s sense of justice, decency or reasonableness.
Note: The charging of attorney’s fees beyond what is fixed by law is malpractice. The Court has the
authority to reduce it to a reasonable amount.

Rule 20.02- A lawyer shall, in cases of referral, with the consent of the client, be entitled to a division of
fees in proportion to the work performed and responsibility assumed.

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General Rule: When lawyers jointly represent a common client for a given fee without any express
agreement on how much each will receive; they will share equally.

Exception: If there are no specific contracts for the payment of the fees of each lawyer, the contracts
shall prevail unless found unconscionable.

Lawyer-referral System

- If another counsel is referred to the client and the latter agrees to take hi as collaborating counsel,
and there is no agreement on the payment of attorney’s fees, the said counsel (or substituting
counsel if the first lawyer withdraws) will receive attorney’s fees in proportion to the work
performed and responsibility assumed.
Note: It is improper to charge attorney’s fees to a client for merely recommending another lawyer to his
client and render no legal service at all in the pursuit or defense of the client’s case.

Rule 20.03 - A lawyer shall not, without the full knowledge and consent of the client, accept any fee,
reward, costs, commission, interest, rebate or forwarding allowance or other compensation whatsoever
related to his professional employment from anyone other than the client.

Rationale: It is to secure the fidelity of the lawyer to his client’s cause and to prevent a situation in which
the receipt by him of a rebate or commission from another with the client’s business may interfere with
the full discharge of his duty to his client.

By way of exception, a lawyer may receive compensation from a person other than his client is when the
latter has full knowledge and approval thereof.

Rule 20.04 - A lawyer shall avoid controversies with clients concerning his compensation and shall resort
to judicial action only to prevent imposition, injustice or fraud.

General rule: A lawyer should avoid the filing of any case against clients for the enforcement of his
attorney’s fees.

Exception: In cases to prevent (a) imposition, (b) injustice, or (c) fraud.

Judicial Action to Recover Attorney’s Fees:

a.) In the same case: He may enforce his attorney’s fees by filing an appropriate motion or petition as an
incident in the main action where he rendered legal services. The motion or the petition must be filed with
the court before the judgment had been satisfied or before the proceeds were delivered to the client.

b.) In a separate civil action: The lawyer may also enforce his attorney’s fees by filing an independent
separate action for collection of attorney’s fees.

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