The Invoice

The notice that bound no bank

In a Palm Beach County divorce, a law firm withdrew from representing the wife and filed a “Notice of Charging Lien” for its unpaid fees. The notice named no amount and no asset. Months later, just before the final judgment, the firm sent the wife’s bank a copy with the numbers of her accounts, and the bank wrote back that it would need a court order. The judgment gave the wife one account and half of another, and within a few days she withdrew most of the money. The firm then asked the court to make the bank pay its fees. In 2026, in John F. Schutz, P.L. v. Ally Financial Inc. (opens in a new tab), the Fourth District said no.

The odd part is that the firm had a lien notice in the court file and a letter in the bank’s hands, and neither held the money. The court read the notice as a statement that the firm intended to seek a lien, not a lien anyone else had to honor. The firm did win a money judgment against its former client, but by then the accounts the lien might have reached were nearly empty. So what does a firm have to do, between the time entry and the bank, to be paid and keep its license while it collects? This reading follows a fee through each stage, and the activity takes you through the same stages with one client’s February.

Before the bill goes out

Every invoice starts as a prebill, a draft the billing lawyer reads before the client does. An entry can be true and still not belong on the bill. An hour a lawyer spent learning new software was worked, and so was an afternoon spent redoing work the firm itself lost, but neither served the client. The billing lawyer writes that time down or marks it no charge, and the firm absorbs it.

Rule 4-1.5 points the same way. Among the factors for a reasonable fee, it lists the efficiency of effort reflected in the work. Its comment says general overhead belongs in the fee, whether the fee is hourly, flat, or contingent, so the cost of running the office is not a line on the client’s bill.

Costs follow a more exact rule. The same comment says filing fees, transcription, and the like should be charged at the actual amount the lawyer paid. A $300 transcript is a $300 cost, not $330 with a handling fee added in the back office. A lawyer may charge a reasonable amount for in-house costs, such as copying, when the client has agreed to it.

What goes out the door should read the way the client will read it. The client should be able to see what each line bought, what the firm chose not to charge, what the firm holds in trust for the client, and how to pay.

When the money comes back

A payment can arrive as one number and still be two kinds of money. Rule 5-1.1(a)(1) puts advances for fees, costs, and expenses in a trust account, so a deposit toward an expert’s next bill belongs to the client until the expert is paid. A payment on an invoice already earned belongs to the firm and goes to its operating account. When one card payment covers both, the firm has to separate them. That is the line between operating and trust accounts.

Florida Bar Ethics Opinion 21-2 (opens in a new tab) lets lawyers take payments through online payment services, with a condition. Client money has to come in through an account with the service used only for client money, and it has to reach the trust account promptly. In other words, the path the money takes has to match whose money it is.

The processor’s cut raises a second question: who pays it. Opinion 21-2 says that unless lawyer and client agree otherwise, the lawyer pays the fee, and it is not paid from trust funds. Chargebacks, the reversals of card payments a cardholder disputes, must stay out of trust too. Rule 4-1.5(h) lets a lawyer charge the client “the actual charge the credit plan imposes on the lawyer for the client’s transaction.” That is a pass-through, not a profit: the real charge, for that one transaction. Those are the card processing charges the engagement letter should address.

Florida also has a statute on the subject. Section 501.0117, Florida Statutes, makes it a misdemeanor for a seller to impose a surcharge for paying by credit card. In 2015, in Dana’s Railroad Supply v. Attorney General (opens in a new tab), the Eleventh Circuit held the statute unconstitutional. The law let a merchant charge card users more, so long as the merchant called the difference a discount for cash. The court concluded that the statute regulated what merchants said, not what they charged, and that it failed First Amendment scrutiny. The statute is still printed in the Florida Statutes.

When the client disputes the bill

A fee dispute is not misconduct by itself. Rule 5-1.1(d) says controversies over the amount of fees are not grounds for discipline unless the amount demanded is clearly excessive, extortionate, or fraudulent. What the rules regulate is how the firm behaves while the dispute lasts.

Suppose the firm holds money that both it and the client claim. Rule 5-1.1(f) keeps the disputed part in trust until the dispute is resolved and requires the firm to pay out the rest promptly. The comment adds that a lawyer may not hold funds to force a client to accept the lawyer’s position. It tells the lawyer to suggest a prompt way to settle the dispute, such as arbitration.

The Bar’s own way is fee arbitration under Chapter 14. Outside a discipline case, the program hears a dispute between a lawyer and a client only when both have agreed to it. They can agree in a fee contract whose arbitration clause carries the bold notice Rule 4-1.5(i) prescribes, or in a request both sign. The program also takes only disputes in which the fee is the sole disputed question and the evidence fits in an eight-hour hearing.

The Bar’s guide for clients (opens in a new tab) explains the rest. The arbitrator’s services are free. A dispute of $15,000 or less goes to one arbitrator, and a larger one to a panel of three unless both sides agree to one. The award is binding and can be collected like any other judgment. The comment to Rule 4-1.5 says a lawyer should conscientiously consider submitting a fee dispute to the program. So a firm whose fee contract says nothing about arbitration can offer it, but it cannot require it.

When the client stops paying

A client who stops paying gives the firm two questions. May it stop working? And how does it get paid for the work it has done?

The first question is withdrawal. Rule 4-1.16(b)(3) allows it when a client fails substantially to meet an obligation to the lawyer, such as paying, after a reasonable warning that the lawyer will withdraw unless the client does. The warning comes before the motion, and one that names a date and says what happens after it leaves no room for doubt. In a pending case, the firm also needs the court. Florida Rule of General Practice and Judicial Administration 2.505(f)(1) ends a lawyer’s appearance by a written order after a hearing on a motion to withdraw. On the way out, Rule 4-1.16(d) has the lawyer protect the client, including by giving reasonable notice and refunding any advance not yet earned or spent.

The second question is the lien. A charging lien lets a lawyer be paid from the judgment or recovery that the lawyer’s work produced in the case. In Sinclair, Louis, Siegel, Heath, Nussbaum & Zavertnik, P.A. v. Baucom (opens in a new tab), a firm had represented Ruby Baucom through years of divorce and property litigation. She and her husband then settled on their own, without their lawyers, on terms that left her to pay her own fees. She said she owed the firm $6,500, and the firm said its bill was $150,000. The Supreme Court of Florida held in 1983 that the firm’s lien was properly perfected. A charging lien, the court explained, needs a contract, an understanding that payment will come from the recovery, a dispute or an attempt to avoid payment, and timely notice.

Timely means before the case ends. In Daniel Mones, P.A. v. Smith (opens in a new tab), a lawyer settled his clients’ case, kept part of the settlement for fees they disputed, and only then sued them. That was too late for a charging lien, because he had given no notice in the original case before it closed. The court still let the disputed money be held until the fee dispute was decided, under a different lien.

That lien is the retaining lien: the right to keep a client’s papers, money, and property already in the lawyer’s hands until the client pays for all of the lawyer’s work. It has limits. Money a client entrusted for a specific purpose is outside it unless the client agreed that fees could be paid from it. Rule 5-1.1(b) adds that client money is not subject to setoff for attorney’s fees. For the file itself, the Bar’s ethics committee (opens in a new tab) says a discharged firm may sometimes hold it, but a court decides whether the lien is valid, and the lawyer must avoid foreseeable prejudice to the client.

That brings the story back to Schutz. A notice of charging lien is only the first step. In Dowda & Fields, P.A. v. Cobb (opens in a new tab), the Fifth District, which hears Daytona Beach’s appeals, said that filing a notice of intent to claim a charging lien does not by itself establish the lien. Nor does it give notice to others who deal with the client about the judgment. The court sent the case back for the trial judge to decide what was owed, impress the lien on the judgment, and have the clerk note it on the recorded judgment. The notice in Schutz named neither an amount nor an asset, and by the time a court fixed the amount, the money had left the accounts. Without a court order naming both, the Fourth District would not make a bank freeze accounts for an unknown time.

Back to Coastal Keel

The activity puts you at each of these stages with one client, Coastal Keel Marine. Start with the Engagement Terms sheet of the invoice workbook, because in this matter the terms settle many of the prebill’s questions before any rule does. When you reach the lien notice in Part 4, read Schutz again and ask what the bank in that case would have needed to see.