 Ordinary Concept – An attorney’s fee is the reasonable compensation

paid to a lawyer for the legal services he has rendered to a client.

 Extraordinary Concept – 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 a litigation.
 The fact of employment as lawyer by the client constitutes
the legal basis of the lawyer’s right to demand payment for
his services.

No formal contract is necessary to effectuate

employment.
 Is the fee charged by the lawyer for merely accepting the case.
The rationale behind this is, once the lawyer agrees to act on behalf of
a client, he generally loses the opportunity to handle cases for the
opposing party. Thus, a lawyer’s acceptance of a case would mean
that he is forgoing prospective work for the other party.

The acceptance fee is normally applied in litigation, and

coupled with a per stage or per activity type of billing, where the
lawyer divides his professional fees depending on the stage of the
proceedings.
 Facts:
Corazon hired the services of Atty. Gacott in a case for Grave Slander filed
against her before the MCTC of Puerto Princesa City. Atty. Gacott charged her an
acceptance fee of P10,000.00. Dalupan then paid him the amount of P5,000.00 as
partial payment for the acceptance fee. When Dalupan asked Atty. Gacott to draft a
Motion to Reduce Bail Bond, Atty. Gacott refused, claiming that it was beyond the
scope of his retainer services, thus Dalupan was constrained to request one Rolly
Calbentos to prepare it for her.
Dalupan then paid the remaining balance of P5,000.00 to Atty.
Gacott. When she asked for a receipt, he refused, saying there was no need for it.
 After the arraignment and preliminary conference, Atty. Gacott neglected his
duties as counsel and failed to attend any of the hearing before the MTC. Because of
his frequent absences, Judge Dilig appointed a counsel de officio to represent
Corazon.
Atty. Gacott, however, refused to refund the amount she gave him as
acceptance fee. In his defense, Atty. Gacott alleged that Corazon approached him
and represented herself as an indigent party in several cases. He agreed to represent
her subject to payment of an acceptance fee of P5,000.00 per case and appearance
fee of P500 for each court appearance. He prepared the Motion for Reduction of
Bail which they filed before the MTC; however, Corazon asked him to negotiate
with the MTC judge to ensure the grant of the Motion, to which he refused, averring
that he is only a lawyer, not a fixer.
 During the hearing, Atty. Gacott was not present as he was not able to
receive a copy of the notice of hearing, the reason he explained when required to
submit a written explanation by the MTC. After the complainant informed him that
she is terminating her services as her lawyer, she withdrew all case records and the
trial court later issued an order relieving him of his duties as counsel to complainant.
The IBP Investigating Commissioner recommended the dismissal of the
complaint for disbarment against Atty. Gacott, but recommended that he return the
payment of attorneys fee to Corazon in the amount of P5,000.00, opining that
respondent cannot be held liable for abandonment or neglect of duty because it was
the complainant who discharged the respondent for loss of trust and confidence.
This was confirmed by the act of the complainant in withdrawing all her
records from the law office of the respondent.
 Furthermore, the Investigating Commissioner said that absent evidence
showing that the respondent committed abandonment or neglect of duty, the
presumption of regularity should prevail in favor of the respondent. Since he did not
perform substantial legal work on behalf of the complainant, Atty. Gacott should
return the P5,000.00 to complainant. The IBP Board of Governors adopted the
report and recommendation, and denied the motion for reconsideration of Atty.
Gacott.
Issue:

Whether or not Atty. Gacott should return to complainant the P5,000.00 acceptance fee.
 The Supreme Court found that the respondent did not commit any fault or
negligence in the performance of his obligations under the retainer agreement which
was willfully terminated by the complainant on the ground of loss of trust and
confidence. As held by the Investigating Commissioner, the evidence on record
shows that the respondent is not liable for abandonment or neglect of duty.
However, the supreme court disagree with the conclusion of the
Investigating Commissioner that the respondent should return the payment of the
attorney’s fee to the complainant in the amount of P5,000.
It is well-settled that attorney’s fee is understood both in its ordinary and
extraordinary concept. In its ordinary sense, attorney’s fee refers to the reasonable
compensation paid to a lawyer by his client for legal services rendered. Meanwhile,
in its extraordinary concept, attorney’s fee is awarded by the court to the successful
litigant to be paid by the losing party as indemnity for damages. In the present case,
the Investigating Commissioner referred to the attorney’s fee in its ordinary concept.
 On the other hand, acceptance fee refers to the charge imposed by the lawyer
for merely accepting the case. This is because once the lawyer agrees to represent a
client, he is precluded from handling cases of the opposing party based on the
prohibition on conflict of interest. Thus, he incurs an opportunity cost by merely
accepting the case of the client which is therefore indemnified by the payment of
acceptance fee. Since the acceptance fee only seeks to compensate the lawyer for the
lost opportunity, it is not measured by the nature and extent of the legal services
rendered.
In the present case, based on a simple reading of the Official Receipt, the
parties clearly intended the payment of P5,000 to serve as acceptance fee of the
respondent, and not attorney’s fee. Moreover, both parties expressly claimed that
they intended such payment as the acceptance fee of the respondent. Absent any
other evidence showing a contrary intention of the parties, the Supreme Court found
that the Investigating Commissioner gravely erred in referring to the amount to be
returned by the respondent as attorney’s fee.
 Since the Investigating Commissioner made an erroneous reference to
attorney’s fee, he therefore mistakenly concluded that the respondent should return
the same as he did not perform any substantial legal work on behalf of the
complainant. As previously mentioned, the payment of acceptance fee does not
depend on the nature and extent of the legal services rendered.
Secondly, the respondent did not commit any fault or negligence which
would entail the return of the acceptance fee.
 Absent any fault or negligence on the part of the respondent, the court see no
legal basis for the order of the Investigating Commissioner to return the attorney’s
fee of P5,000.
Wherefore, the petition is hereby granted. Resolution of the IBP Board of
Governors insofar as they ordered the respondent to return the attorney’s fee to the
complainant in the amount of Five Thousand Pesos (P5,000) are reversed and set
aside.
The client may stipulate with his counsel to pay him either:
 A fixed or absolute fee which is payable regardless of the result of the case;
 A contingent fee that is conditioned to the securing of a favorable judgement and
recovery of money or property and the amount of which may be on a percentage
basis;
 A fixed fee payable per appearance; or
 A fixed fee computed by the number of hours spent;
Once there is a meeting of the minds between the lawyer and client on the
case or subject to be handled and the consideration therefore, the lawyer is
deemed employed even if no acceptance fee is paid yet,

However, payment of attorney’s fees is not, a necessary element to create

said relationship.

In fact, there are items, when lawyers represent clients pro bono, which act
is considered a social obligation.
 Adequate Compensation is necessary in order to enable the lawyer to
serve his client effectively and to preserve the integrity and
independence of the profession
 While the practice of law is not a business venture, a lawyer
nevertheless is entitled to be duly compensated for professional services
rendered
 A lawyer like all other human beings has a right to livelihood
 The lawyer is entitled reasonable fee for his services under
the principle of quasi-contract, that is, no man must be
enriched at the expense of another.
If there is quasi-contract, the lawyer must be paid
reasonable attorney’s fees based on quantum meruit.
Literally meaning as much as he deserves - is used as basis for determining an
attorney’s professional fees in the absence of an express agreement or contract.
The recovery of attorney’s fees on the basis of quantum meruit is a device
that prevents unscrupulous client from running away with the fruits of the legal
services of counsel without paying for it and also avoids unjust enrichment on
the part of the attorney himself.
An attorney must show that he is entitled to reasonable compensation for
the effort in pursuing the client’s cause, taking into account certain factors in
fixing the amount of legal fees.
 There is no express contract for payment of attorney’s fees agreed upon between
the lawyer and the client;
 When although there is a formal contract for attorney’s fees, the stipulated fees are
found unconscionable or unreasonable by the court;
 When the contract for attorney’s fees is void due to purely formal matters or
defects of execution;
 When the counsel, for justifiable cause, was not able to finish the case to its
conclusion;
 When the lawyer and client disregard the contract of attorney’s fees.
 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 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 the 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.
 General Retainer or Retaining Fee – It 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 ordinary business of the client and referred
to him for legal action;
 Special Retainer – it is a fee for a specific or particular case or service
rendered by the lawyer for a client.
Facts:
In her complaint, Dalisay alleged that she was impressed by the pro-poor and pro-
justice advocacy of respondent, a media personality. So she engaged his services as her
counsel, wherein she is the defendant.
After consulting with respondent, she handed to him all the pertinent documents.
In turn, respondent demanded P25,000.00 as acceptance fee which she paid. Then
respondent asked her to pay P8,000.00 as filing fee. She paid the amount although she
knew that Civil Case No. 00-44 was already filed with the court.
After a month, complainant approached respondent to follow up her case.
Respondent demanded additional acceptance fee, or a total of P90,000.00, with the
explanation that he can give a discount should she pay in cash. Respondent also asked
her to pay him P3,000.00 as appearance fee.
 Complainant raised an additional amount and paid respondent the total sum
of P48,000.00. Adding to this amount P8,000.00 filing fee, her total payment was
P56,000.00.
Complainant Dalisay further alleged that notwithstanding her payments,
respondent never rendered any legal service for her. As a result, she terminated their
attorney-client relationship and demanded the return of her money and documents.
However, Atty. Mauricio refused to do so.
According to respondent, he rendered legal services to complainant by way
of legal advice and opinions on all her problems and those of her family.
Consequently, he had every right to collect attorneys fees from her. He prayed that
the instant complaint be dismissed.
 This case was referred to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.
Commissioner Lydia A. Navarro of the IBP Commission on Bar Discipline
made the following findings:
It is evident that for the amount of P56,000.00 paid by the complainant as
reflected in the duly signed official receipts of respondents law office, no action had
been taken nor any pleadings prepared by the respondent except his alleged
conferences and opinions rendered when complainant frequented his law office, as
his legal services.
In view thereof, when complainant decided to withdrew respondents services
as her counsel due to inaction; it is quite fair and incumbent upon the respondent to
return whatever amount the complainant had already paid in the amount of
P56,000.00 and the latter to compensate respondent for reasonable consultation fees
due him which was not included in their retained agreement.
Whether or not Atty. Mauricio violated Canon 20 of the Code of Professional
Responsibility
 Yes, Atty. Mauricio violated canon 20 of the Code of Professional
Responsibility.
When respondent accepted P56,000.00 from complainant, it was understood that
he agreed to take up the latter’s case and that an attorney-client relationship between
them was established. From then on, it was expected of him to serve complainant with
competence and attend to her case with fidelity, care and devotion.
However, there is nothing in the records to show that respondent entered his
appearance as counsel of record for complainant. He did not even follow-up the case
which remained pending up to the time she terminated his services.
 Respondent insists that he is entitled to attorneys fees since he gave legal
advice and opinions to complainant on her problems and those of her family. Just
like any other professional, a lawyer is entitled to collect fees for his services.
However, he should charge only a reasonable amount of fees.
Since respondent did not take any step to assist complainant in her case,
charging P56,000.00 is improper. While giving legal advice and opinion on
complainants problems and those of her family constitutes legal service, however,
the attorneys fee must be reasonable. Obviously, P56,000.00 is exorbitant
Therefore, the Supreme Court held that Respondent Atty. Mauricio, Jr. is
guilty of malpractice and gross misconduct for violating Canon 20 of the Code of
Professional Responsibility. He is suspended from the practice of law for six months
and is further ordered to return the sum of P56,000.00 to complainant Dalisay.
Facts :
Sometime in August 1990, Spouses Pedro and Rosita de Guzman
engaged the legal services of Atty. Rosario, as defense counsel in the
complaint filed against them by one Loreta A. Chong for annulment of
contract and recovery of possession with damages involving a parcel of
land in Parañaque City.
Petitioner’s legal services commenced from the RTC and ended
up in the Supreme Court. Spouses de Guzman, represented by petitioner,
won their case at all levels. While the case was pending before the
Supreme Court, Spouses de Guzman died in a vehicular accident.
Thereafter, they were substituted by their children, the respondents.
 Petitioner filed the Motion to Determine Attorney’s Fees before the RTC. He
alleged that he had a verbal agreement with the deceased Spouses de Guzman that
he would get 25% of the market value of the subject land if the complaint filed
against them by Chong would be dismissed.
Respondents refused his written demand for payment of the contracted
attorney’s fees. Petitioner insisted that he was entitled to an amount equivalent to
25% percent of the value of the subject land on the basis of quantum meruit.
RTC rendered the assailed order denying petitioner’s motion on the ground
that it was filed out of time. The RTC stated that the said motion was filed after the
judgment rendered in the subject case. The RTC wrote that considering that the
motion was filed too late, it had already lost jurisdiction over the case because a
final decision could not be amended or corrected except for clerical errors or
mistakes.
Petitioner filed a motion for reconsideration, but it was denied by the RTC
for lack of merit. Hence, this petition.
Whether or not petitioner is entitled to Attorney’s fees
Ruling:

Yes. In the case at bench, the attorney’s fees being claimed by the petitioner
refers to the compensation for professional services rendered, and not as indemnity
for damages. He is demanding payment from respondents for having successfully
handled the civil case filed by Chong against Spouses de Guzman.
Petitioner unquestionably rendered legal services for respondents’ deceased
parents in the civil case for annulment of contract and recovery of possession with
damages. He successfully represented Spouses de Guzman from the trial court level
up to the Supreme Court, for a lengthy period of 17 years.
After their tragic death in 2003, petitioner filed a notice of death and a
motion for substitution of parties with entry of appearance and motion to resolve the
case before this Court. As a consequence of his efforts, the respondents were
substituted in the place of their parents and were benefited by the favorable outcome
of the case.
 Petitioner served as defense counsel for deceased Spouses de Guzman and
respondents for almost seventeen years. The Court is certain that it was not an easy
task for petitioner to defend his clients’ cause for such a long period of time,
considering the heavy and demanding legal workload of petitioner which included
the research and preparation of pleadings, the gathering of documentary proof, the
court appearances, and the various legal work necessary to the defense of Spouses
de Guzman. It cannot be denied that petitioner devoted much time and energy in
handling the case for respondents.
Given the considerable amount of time spent, the diligent effort exerted by
petitioner, and the quality of work shown by him in ensuring the successful defense
of his clients, petitioner clearly deserves to be awarded reasonable attorney’s fees
for services rendered. Justice and equity dictate that petitioner be paid his
professional fee based on quantum meruit.
 The Court, however, is resistant in granting petitioner's prayer for an award
of 25% attorney's fees based on the value of the property subject of litigation
because petitioner failed to clearly substantiate the details of his oral agreement with
Spouses de Guzman.
A fair and reasonable amount of attorney's fees should be 15% of the market
value of the property.
Wherefore, the Supreme Court grants the Motion to Determine Attorney's
Fees filed by petitioner Atty. Rosario based on quantum meruit, the amount of
attorney's fees is at the rate of 15% of the market value of the parcel of land.