Loading...
HomeMy WebLinkAbout10- City Attorney CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: John F. Wilson Subject: Resolution Approving Retention of Outside Counsel to advise the City Clerk re: Charter Amendment Petition Dept: CITY ATTORNEY Date: December 18, 2009 MCC Meeting: December 21,2009 Synopsis of Previous Council Action: December 7, 2009, the City Council authorized the City Clerk to seek outside legal counsel for services related to processing of petition for charter amendment. Recommended motion: That the resolution be adopted Signature Contact person: John F. Wilson Phone: 5355 Supporting data attached: Staff Report Ward: All FUNDING REQUIREMENTS: Amount: _ Not to exceed $10,000 Source: Finance: Committee Notes: e_le-5d -200 -7-,57 Z Agenda Item No. d FAWILSOMCitvCIPA\FORMRFnrnrrnrrn A(ITInn—+-A----..-A CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN ENGAGEMENT LETTER BETWEEN THE CITY OF SAN BERNARDINO AND BEST, BEST AND KRIEGER FOR LEGAL REPRESENTATION IN THE MATTER CONCERNING A PETITION TO PLACE A CHARTER AMENDMENT ON THE NOVEMBER 2, 2010 BALLOT BACKGROUND The City Clerk is in receipt of a notice of intention to circulate a petition for a charter amendment to appear on the November 2, 2010 ballot. The proposed charter amendment would make the City Attorney, City Clerk and Treasurer appointed positions. The City Attorney has determined that there is a conflict which precludes the City Attorney's office from providing the City Clerk with advice relative to the processing of the petition. Pursuant to Charter Section 241, the City Attorney has recommended and consents to the City Council retaining outside counsel to advise the City Clerk on this matter. A copy of the City Attorney's consent is attached hereto. Consistent with this action, the City Clerk has identified the firm of Best, Best, and Krieger for retention. A copy of the Engagement Agreement is hereby presented to the City Council for their approval. FINANCIAL IMPACT The retention agreement is in the not to exceed amount of$10,000. RECOMMENDATION Adopt the resolution. COPY 1 2 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN ENGAGEMENT 3 LETTER BETWEEN THE CITY OF SAN BERNARDINO AND BEST, BEST AND 4 KRIEGER FOR LEGAL REPRESENTATION IN THE MATTER CONCERNING A PETITION TO PLACE A CHARTER AMENDMENT ON THE NOVEMBER 2, 2010 5 BALLOT 6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF r 7 SAN BERNARDINO AS FOLLOWS: 8 SECTION 1. The Mayor of the City of San Bernardino is hereby authorized and 9 directed to execute on behalf of said City an Engagement Letter between the City of San Bernardino and Best' Best and Krieger, for legal representation in the matter concerning a 10 11 petition to place a charter amendment on the November 2, 2010 ballot. A copy of the Engagement Letter is attached hereto marked Exhibit "A" and incorporated herein by reference a 12 13 as fully as though set forth at length. Payment pursuant to the Engagement Letter shall not 14 exceed ten thousand dollars ($10,000). x 15 SECTION 2. The authorization granted by this Resolution shall expire and be void and be of no further effect if the Engagement Letter is not executed by both parties and returned to 16 17 the Office of the City Clerk within ten (10) days following the effective date of this Resolution. 18 19 20 t 21 22 23 4, 24 25 26 27 28 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO 2 AUTHORIZING THE EXECUTION OF AN ENGAGEMENT LETTER BETWEEN THE CITY OF SAN BERNARDINO AND BEST, BEST AND KRIEGER FOR LEGAL REPRESENTATION IN THE MATTER 3 CONCERNING A PETITION TO PLACE A CHARTER AMENDMENT ON THE NOVEMBER 2, 2010 BALLOT 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 Common Council of the City of San Bernardino at a meeting thereof, held on the _ 7 day of , 2009, by the following vote, to wit: 8 COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSENT 9 ESTRADA 10 BAXTER 11 BRINKER 12 SHORETT 13 KELLEY 14 JOHNSON 15 MC CAMMACK 16 17 Rachel Clark, City Clerk 18 19 The foregoing Resolution is hereby approved this_day of , 2009. 20 21 22 PATRICK J. MORRIS, Mayor City of San Bernardino 23 Approved as to form: 24 JAMES F. PENMAN, 25 City Attorney 26 .�By: 27 28 BEST BEST & KRIEGER ATTORNEYS AT LAW SACRAMENTO INDIAN WELLS y {916)325-4000 k (760)568-2611 3750 University Avenue _ Post Office Box 1028 SAN DIEGO IRVINE Riverside,California 92502-1028 (949)263-2600 (619)525-1300 _ (951)686-1450 L05 ANGELES (951)686-3083 Fax WALNUT CREEK ` (213)617-8100 BBKlaw.com (925)977-3300 4 ONTARIO l (909)989-8584 i December 14, 2009 I 1 VIA ELECTRONIC MAIL ANp REGULAR U.S.MAIL I Rachel Clark, City Clerk City of San Bernardino 300N. "D" Street , 2"d Floor 'I San Bernardino, CA 92418 fi Re: Petition for Submission to Voters of Proposed Amendment to the Charter of the City of San Bernardino. Dear Ms, Clark: It was a pleasure talking to you about our potential representation of the City of San x Bernardino in connection with the Notice of Intent to Circulate Petition and a Request That a Ballot Title and Summary Be Prepared filed today with the City by the petitioners, the Rev. Raymond W. Turner and M.S. "Susana" Atanasova. It is our understanding that since the San 'z Bernardino City Attorney's Office has conflicted off with regard to this matter, we will be preparing the Ballot Title and Summary. It is also our understanding that, at the City Council 'k meeting held on December 7, 2009, the City Council authorized the City Clerk to seek outside legal counsel to prepare the ballot title and summary as required by Elections Code Sections 9256, 9202 and 9203. We have verbally agreed to work with you in this matter, and this letter should constitute written confirmation of the terms of our engagement. I On a separate note, since the Notice of Intent was filed today, the 15 day clock under 1 Election Code section 9203 has already begun to tick. We plan on providing your office with the I ballot title and summary by no later than Monday, December 28, 2009, so your office will have an extra day to review and comment. At the outset and for our internal guidance,we have printed the Charter for the City of San Bernardino currently posted in the City's website. Please let us know if the posted Charter is not the most recent version of it currently adopted by the City. RVLIr\PDALLARDA\753882.1 Exhibit "A.� BEST BEST & KRIEGER ATTORNEYS AT LAW Rachel Clark, City Clerk City of San Bernardino Page 2 ABOUT OUR REPRESENTATION Best Best& Krieger LLP is pleased to represent the City of San Bernardino in connection with the Notice of Intent to Circulate Petition and a Request That a Ballot Title and Summary Be Prepared. Specifically, we will prepare the ballot title and summary as required by Elections Code Sections 9256, 9202 and 9203, which is due on December 29, 2009. We will also be available to answer any questions you may have in connection with the process involved after we deliver the Ballot Title and Summary. Based on our discussions, we will also provide you with a brief memorandum regarding whether the City Charter may be amended as suggested by the petition. CONFIDENTIALITY AND ABSENCE OF CONFLICTS An attorney-client relationship requires mutual trust between the client and the attorney, It is understood that communications exclusively between counsel and the client are confidential and protected by the attorney-client privilege. To also assure mutuality of trust, we have maintained a conflict of interest index. The California Rules of Professional Conduct defines whether a past or present relationship with any party prevents us from representing your firm. Similarly, your firm's name will be included in our list of clients to ensure we comply with the Rules of Professional Conduct with respect to your firm. We have checked the following names against our client index: Rev. Raymond Turner, Dr. Ernest Garcia, Marion Vassilakos, M.S. Susana Atasanova, Rachel G. Clark and the City of San Bernardino. Based on that check, we can represent the City on this matter. Please review these names to see if any other persons or entities should be included. if you do not tell us to the contrary, we will assume that this list is complete and accurate. We request that you update this list for us if there are any changes in the future. YOUR OBLIGATIONS ABOUT FEES AND BILLINGS We have already discussed with you the fee arrangement, My current billing rate is $305 per hour. I plan on asking one of our associates, Rebecca Hermanowicz, to assist me in this matter. Her billing rate is $258. We understand that there is a cap of$10,000 in our services as they relate to this matter, and we are to seek separate approval in writing from your office if we believe we may exceed that cap. We do not expect to exceed that cap when it comes to preparation of the ballot title and summary, together with the memorandum that I mentioned _ below,but it is possible depending on the work we are-asked to perform afterwards that-we could do so. In any event, we will let you know if we think we will be exceeding the cap with advance notice for you to determine whether you would like us to perform the work. Although I do not plan on asking any other attorneys for assistance in this case, the billing rates for others and the i R VL IT\PDALLARDA�753882.1 BEST BEST & KRIEGER ATTORNEYS AT LAW Rachel Clark, City Clerk City of San Bernardino Page 3 advanced deposit are described in the memorandum attached to this letter. It also describes the other aspects of our firm's billing policies. You should consider this memorandum part of this agreement as it binds both of us. For that reason, you should read it carefully_ INSURANCE We understand that you are not now insured or have any insurance that may cover potential liability or attorneys' fees in this case. If you think you may have such insurance, please notify me immediately. We are also pleased to let you know that Best Best & Krieger LLP carries errors and omissions insurance with Lloyd's of London. After a standard deductible, this insurance provides coverage beyond what is required by the State of California. NEW MATTERS When we are engaged by a new client on a particular matter, we are often later asked to work on additional matters. You should know that such new matters will be the subject of a new r, signed supplement to this agreement. Similarly, this agreement does not cover and is not a commitment by either of us that we will undertake any appeals or collection procedures. Any such future work would also have to be agreed upon in a signed supplement. CIVILITY IN LITIGATION In litigation, courtesy is customarily honored with opposing counsel, such as extensions to file pleadings or responses to other deadlines. In our experience, the reciprocal extension of such courtesies saves our clients' time and money. By signing this letter you will be confirming your approval of this practice in your case, if it ever comes to litigation. HOW THIS AGREEMENT MAY BE TERMINATED You, of course, have the right to end our services at any time. If you do so, you will be responsible for the payment of fees and costs accrued but not yet paid, plus reasonable fees and costs in transferring the case to you or your new counsel. By the same token, we reserve the right to terminate our services to you upon written notice, order of the court, or in accordance with our attached memorandum. This could happen if you fail to pay our fees and costs as agreed, fail- to cooperate with us in this matter, or if we determine we cannot continue to represent you for ethical or practical concerns. G { RVLIT\NDALLARDA1753882.1 r ii BEST BEST & KRIEGER ATFOMEYS AT LAW Rachel Clark, City Clerk City of San Bernardino Page 4 CLIENT FILE If you do not request the return of your file, we will retain your file for five years. After five years, we may have your file destroyed. If you would like your file maintained for more than five years or returned, you must make separate arrangements with us. THANK YOU On a personal note, we are pleased that you have selected Best Best & Krieger LLP to represent you. We look forward to a long and valued relationship with you and appreciate your confidence in selecting us to represent you in this case. If you have any questions at any time about our services or billings, please do not hesitate to call me. If this letter meets with your approval, please sign and date it, and return the original to us. If you have any questions or need clarification, please do not hesitate to contact me at any time. Please note that unless you sign, date and return the original, we will not represent you in any capacity, and we will assume that you have made other arrangements for legal representation. We have enclosed a separate signed copy of this letter for your records. Very t ier y yo P dam` of BEST BEST & KRIEGER LLP PCD/cs AGREED AND ACCEPTED: CITY OF SAN BERNARDINO By: Dated: RVLr TDALLARDA\753882.1 BEST BEST& KRIEGER LLP'S BILLING POLICIES Our century of experience has shown that the attorney-client relationship works best when there is mutual understanding about fees, expenses, billing and payment terms. Therefore, this statement is intended to explain our billing policies and procedures. Clients are encouraged to discuss with us any questions they have about these policies and procedures. Clients may direct specific questions about a bill to the attorney with whom the client works or to Judy Ismael of our Accounting Department. Any specific billing arrangements different from those set forth below will be confirmed in a separate written agreement between the client and the firm. Fees for Professional Services Unless a flat fee is set forth in our engagement letter with a client, our fees for the legal work we will undertake will be based in substantial part on time spent by personnel in our office on that client's behalf. In special circumstances which will be discussed with the client and agreed upon in writing, fees will be based upon the novelty or difficulty of the matter, or the time or other special limitations imposed by the client. Hourly rates are set to reflect the skill and experience of the attorney or other legal personnel rendering services on the client's behalf. Time is accrued on an incremental basis for such matters as telephone calls (minimum .3 hour) and letters (minimum .5 hour), and on an actual basis for all other work. Our attorneys'are currently billed at rates from $185 to $550 per hour, and our administrative assistants, research assistants, paralegals and law clerks are billed at rates from $90 to $225 per hour. These hourly rates are reviewed annually to accommodate rising firm costs and to reflect changes in attorney status as lawyers attain new levels of legal experience. Any increases resulting from such reviews will be instituted automatically and will apply to each affected client, after advance notice. Fees For Other Services, Costs and Expenses We attempt to serve all our clients with the most effective support systems available. Therefore, in addition to fees for professional legal services, we also charge separately for some other services and expenses to the extent of their use by individual clients. These charges include but are not limited to, mileage at the current IRS approved rate per mile, extraordinary telephone and document delivery charges, copying charges, computerized research, court filing fees and other court-related expenditures including court reporter and transcription fees. No separate charge is made for secretarial or word processing services; those costs are included within the above hourly rates. We may need to advance costs and incur expenses on your behalf on an ongoing-basis. These items are separate and apart from attorneys' fees and, as they are out-of-pocket,chafgcs, we need to have sufficient funds on hand from you to pay them when due. We will advise the client from time to time when we expect items of significant cost to be incurred, and it is required that the client send us advances to cover those costs before they are due. R VLMPDALLARDA\753882.1 Advance Deposit Toward Fees And Costs involve both a substantial undertaking b our firm and the client matters � Because new 1 Bec g y establishment of client credit with our accounting office, we require an advance payment from v deposit is determined on a case-by-case basis discussed first 1, clients. The amount of this advance e os P Y with the client, and is specified in our engagement letter. !� Upon receipt, the advance deposit will be deposited into the firm's client trust account. Our monthly billings will reflect such applications of the advance deposit to costs and not to attorney's fees. At the end of engagement, we will apply any remaining balance first to costs and then to fees. We also reserve the right to require increases or renewals of these advanced deposits. By signing the initial engagement letter, each client is agreeing that trust account balances may be withdrawn and applied to costs as they are incurred and to our billings, after presentation to the client. If we succeed in resolving your matter before the amounts deposited are used, any balance will be promptly refunded. Y Based on our previous conversation, we will not require an advance deposit in this matter. E Monthly Invoices and Payment t Best Best & Krieger LLP provides our clients with monthly invoices for legal services performed and expenses incurred. Invoices are due and payable upon receipt. l i Each monthly invoice reflects both professional and other fees for services rendered through the end of the prior month, as well as expenses incurred on the client's behalf that have been processed by the end of the prior month. Processing of some expenses is delayed until the '€ next month and billed thereafter. i Our fees are not contingent upon any aspect of the matter and are due upon receipt. All billings are due and payable within ten days of presentation unless the full amount is covered by the balance of an advance held in our trust account. If a bill is not paid within 30 days, a late charge of one percent per month on the unpaid invoice shall be added to the balance owed, commencing with the next statement and continuing until paid. i 1 I It is our policy to treat every question about a bill promptly and fairly. It is also our policy that if a client does not pay an invoice within 60 days of mailing, we assume the client is, for whatever reason, refusing to pay. We will then advise the client by letter that the client may pay the invoice within 14 days or the firm will take appropriate steps to withdraw as attorney of record. If the delay is caused by a problem in the invoice, we must rely upon the client to raise that with us during the 14-day period. This same policy applies to fee arrangements which require the client to replenish fee deposits or make deposits for anticipated costs. From time to time clients have questions about the format of the bill or description of work performed. If you have any such questions, please ask them when you receive the bill so we may address them on a current basis. J RVLMPDALLARDA\753882.1 -2- i i 0 Changes in Fee Arrangements and Budgets It may be necessary under certain circumstances for a client to increase the size of required advances for fees after the commencement of our engagement and depending upon the scope of the work. For example, prior to a protracted trial or hearing, the firm may require a further advance payment to the firm's trust account sufficient to cover expected fees. Any such changes in fee arrangements will be discussed with the client and mutually agreed in writing. Because of the uncertainties involved, any estimates of anticipated fees that we provide at the request of a client for budgeting purposes, or otherwise, can only be an approximation of potential fees. BEST BEST & KRIEGER LLP k pk XRX E F RVLIT\PDALLARDA1753882.1 -3- BEST BEST & KRIEGER ATTORNEYS AT LAW INDIAN WELLS SACRAMENTO (760)568-2611 3750 University Avenue (916)325-4000 IRVINE Post Office Box 1028 Riverside,California 92502-1028 SAN DIEGO (949)263-2600 (951)686-1450 (619)525-1300 LOS ANGELES (951)686-3083 Fax WALNUT CREEK (213)6-,7-8100 BBK1aw.com (925)977-3300 ONTARIO (909)989-6584 December 14, 2009 VIA ELECTRONIC MAIL AND REGULAR U.S.MAIL Rachel Clark, City Clerk City of San Bernardino 300 N. "D" Street , 2nd Floor San Bernardino, CA 92418 Re: Petition for Submission to Voters of Proposed Amendment to the Charter of the City of San Bernardino. Dear Ms, Clark: It was a pleasure talking to you about our potential representation of the City of San Bernardino in connection with the Notice of Intent to Circulate Petition and a Request That a Ballot Title and Summary Be Prepared filed today with the City by the petitioners,the Rev. Raymond W. Turner and M.S. "Susana" Atanasova. It is our understanding that since the San Bernardino City Attorney's Office has conflicted off with regard to this matter, we will be preparing the Ballot Title and Summary. It is also our understanding that, at the City Council meeting held on December 7, 2009, the City Council authorized the City Clerk to seek outside legal counsel to prepare the ballot title and summary as required by Elections Code Sections 9256, 9202 and 9203. We have verbally agreed to work with you in this matter, and this letter should constitute written confirmation of the terms of our engagement. On a separate note, since the Notice of Intent was filed today, the 15 day clock under Election Code section 9203 has already begun to tick. We plan on providing your office with the ballot title and summary by no later than Monday, December 28, 2009, so your office will have an extra day to review and comment. At the outset and for our internal guidance, we have printed the Charter for the City of San Bernardino currently posted in the City's website. Please let us know if the posted Charter is not the most recent version of it currently adopted by the City. RV L1T\PDALLARDA\753882.1 BEST BEST & KRIEGER ATTORNEYS AT LAW Rachel Clark, City Clerk City of San Bernardino Page 2 ABOUT OUR REPRESENTATION Best Best & Krieger LLP is pleased to represent the City of San Bernardino in connection with the Notice of Intent to Circulate Petition and a Request That a Ballot Title and Summary Be Prepared. Specifically, we will prepare the ballot title and summary as required by Elections Code Sections 9256, 9202 and 9203, which is due on December 29, 2009. We will also be available to answer any questions you may have in connection with the process involved after we deliver the Ballot Title and Summary. Based on our discussions, we will also provide you with a brief memorandum regarding whether the City Charter may be amended as suggested by the petition. CONFIDENTIALITY AND ABSENCE OF CONFLICTS An attorney-client relationship requires mutual trust between the client and the attorney. It is understood that communications exclusively between counsel and the client are confidential and protected by the attorney-client privilege. To also assure mutuality of trust, we have maintained a conflict of interest index. The California Rules of Professional Conduct defines whether a past or present relationship with any party prevents us from representing your firm. Similarly, your firm's name will be included in our list of clients to ensure we comply with the Rules of Professional Conduct with respect to your firm. We have checked the following names against our client index: Rev. Raymond Turner, Dr. Ernest Garcia, Marion Vassilakos, M.S. Susana Atasanova, Rachel G. Clark and the City of San Bernardino. Based on that check, we can represent the City on this matter. Please review these names to see if any other persons or entities should be included. If you do not tell us to the contrary, we will assume that this list is complete and accurate. We request that you update this list for us if there are any changes in the future. YOUR OBLIGATIONS ABOUT FEES AND BILLINGS We have already discussed with you the fee arrangement. My current billing rate is $305 per hour. I plan on asking one of our associates, Rebecca Hermanowicz, to assist me in this matter. Her billing rate is $258. We understand that there is a cap of$10,000 in our services as they relate to this matter, and we are to seek separate approval in writing from your office if we believe we may exceed that cap. We do not expect to exceed that cap when it comes to preparation of the ballot title and summary, together with the memorandum that I mentiQn6d below, but it is possible depending on the work we are-asked to perform afterwards that-we could do so. In any event, we will let you know if we think we will be exceeding the cap with advance notice for you to determine whether you would like us to perform the work. Although I do not plan on asking any other attorneys for assistance in this case, the billing rates for others and the R VL1T\PDALLA RDA\753892.1 BEST BEST & KRIEGER ATTORNEYS AT LAW Rachel Clark, City Clerk City of San Bernardino Page 3 advanced deposit are described in the memorandum attached to this letter. It also describes the other aspects of our firm's billing policies. You should consider this memorandum part of this agreement as it binds both of us. For that reason, you should read it carefully. INSURANCE We understand that you are not now insured or have any insurance that may cover potential liability or attorneys' fees in this case. If you think you may have such insurance, please notify me immediately. We are also pleased to let you know that Best Best & Krieger LLP carries errors and omissions insurance with Lloyd's of London. After a standard deductible, this insurance provides coverage beyond what is required by the State of California. NEW MATTERS When we are engaged by a new client on a particular matter, we are often later asked to work on additional matters. You should know that such new matters will be the subject of a new signed supplement to this agreement. Simillarly, this agreement does not cover and is not a commitment by either of us that we will undertake any appeals or collection procedures. Any such future work would also have to be agreed upon in a signed supplement. CIVILITY IN LITIGATION In litigation, courtesy is customarily honored with opposing counsel, such as extensions to file pleadings or responses to other deadlines. In our experience, the reciprocal extension of such courtesies saves our clients' time and money. By signing this letter you will be confirming your approval of this practice in your case, if it ever comes to litigation. i HOW THIS AGREEMENT MAY BE TERMINATED You, of course, have the right to end our services at any time. If you do so, you will be responsible for the payment of fees and costs accrued but not yet paid, plus reasonable fees and N costs in transferring the case to you or your new counsel. By the same token, we reserve the right to terminate our services to you upon written notice, order of the court, or in accordance with our attached memorandum. This could happen if you fail to pay our fees and costs as agreed, fail_ to cooperate with us in this matter, or if we determine we cannot continue ..,lo represent you for ethical or practical concerns. - RV LITM)ALLARDAM3882.1 BEST BEST & KRIEGER ATTORNEYS AT LAW Rachel Clark, City Clerk City of San Bernardino Page 4 CLIENT FILE If you do not request the return of your file, we will retain your file for five years. After five years, we may have your file destroyed. If you would like your file maintained for more than five years or returned, you must make separate arrangements with us. THANK YOU On a personal note, we are pleased that you have selected Best Best & Krieger LLP to represent you. We look forward to a long and valued relationship with you and appreciate your confidence in selecting us to represent you in this case. If you have any questions at any time about our services or billings, please do not hesitate to call me. If this letter meets with your approval, please sign and date it, and return the original to us. If you have any questions or need clarification, please do not hesitate to contact me at any time. Please note that unless you sign, date and return the original, we will not represent you in any capacity, and we will assume that you have made other arrangements for legal representation. We have enclosed a separate signed copy of this letter for your records. Very t y yo Pier of BEST BEST & KRIEGER LLP PCD/cs AGREED AND ACCEPTED: CITY OF SAN BERNARDINO f i w: By: f Dated: I I k r r r R V UTTDALLARDAM3882.1 BEST BEST& KRIEGER LLP'S BILLING POLICIES Our century of experience has shown that the attorney-client relationship works best when there is mutual understanding about fees, expenses, billing and payment terms. Therefore, this statement is intended to explain our billing policies and procedures. Clients are encouraged to discuss with us any questions they have about these policies and procedures. Clients may direct specific questions about a bill to the attorney with whom the client works or to Judy Ismael of our Accounting Department. Any specific billing arrangements different from those set forth below will be confirmed in a separate written agreement between the client and the firm. Fees for Professional Services Unless a flat fee is set forth in our engagement letter with a client, our fees for the legal work we will undertake will be based in substantial part on time spent by personnel in our office on that client's behalf. In special circumstances which will be discussed with the client and agreed upon in writing, fees will be based upon the novelty or difficulty of the matter, or the time or other special limitations imposed by the client. Hourly rates are set to reflect the skill and experience of the attorney or other legal personnel rendering services on the client's behalf. Time is accrued on an incremental basis for such matters as telephone calls (minimum .3 hour) and letters (minimum .5 hour), and on an actual basis for all other work. Our attorneys'are currently billed at rates from $185 to $550 per hour, and our administrative assistants, research assistants, paralegals and law clerks are billed at rates from $90 to $225 per hour. These hourly rates are reviewed annually to accommodate rising firm costs and to reflect changes in attorney status as lawyers attain new levels of legal experience. Any increases resulting from such reviews will be instituted automatically and will apply to each affected client, after advance notice. Fees For Other Services, Costs and Expenses We attempt to serve all our clients with the most effective support systems available. Therefore, in addition to fees for professional legal services, we also charge separately for some other services and expenses to the extent of their use by individual clients. These charges include but are not limited to, mileage at the current IRS approved rate per mile, extraordinary telephone and document delivery charges, copying charges, computerized research, court filing fees and other court-related expenditures including court reporter and transcription fees. No separate charge is made for secretarial or word processing services; those costs are included within the above hourly rates. We may need to advance costs and incur expenses on your behalf on an ongoing- IS. These items are separate and apart from attorneys' fees and, as they are out-of-pocket.charg�s, we need to have sufficient funds on hand from you to pay them when due. We will advise the client from time to time when we expect items of significant cost to be incurred, and it is required that the client send us advances to cover those costs before they are due. RVI-MPllALLARUA17538811 Advance Deposit Toward Fees And Costs Because new client matters involve both a substantial undertaking by our firm and the establishment of client credit with our accounting office, we require an advance payment from clients. The amount of this advance deposit is determined on a case-by-case basis discussed first with the client, and is specified in our engagement letter. Upon receipt, the advance deposit will be deposited into the firm's client trust account. Our monthly billings will reflect such applications of the advance deposit to costs and not to attorney's fees. At the end of engagement, we will apply any remaining balance first to costs and then to fees. We also reserve the right to require increases or renewals of these advanced deposits. By signing the initial engagement letter, each client is agreeing that trust account balances may be withdrawn and applied to costs as they are incurred and to our billings, after presentation to the client. If we succeed in resolving your matter before the amounts deposited are used, any balance will be promptly refunded. Based on our previous conversation, we will not require an advance deposit in this matter. Monthly Invoices and Payment Best Best & Krieger LLP provides our clients with monthly invoices for legal services ` - performed and expenses incurred. Invoices are due and payable upon receipt. Each monthly invoice reflects both professional and other fees for services rendered through the end of the prior month, as well as expenses incurred on the client's behalf that have been processed by the end of the prior month. Processing of some expenses is delayed until the next month and billed thereafter. Our fees are not contingent upon any aspect of the matter and are due upon receipt. All billings are due and payable within ten days of presentation unless the full amount is covered by the balance of an advance held in our trust account. If a bill is not paid within 30 days, a late charge of one percent per month on the unpaid invoice shall be added to the balance owed, commencing with the next statement and continuing until paid. It is our policy to treat every question about a bill promptly and fairly. It is also our policy that if a client does not pay an invoice within 60 days of mailing, we assume the client is, for whatever reason, refusing to pay. We will then advise the client by letter that the client may pay the invoice within 14 days or the firm will take appropriate steps to withdraw as attorney of record. If the delay is caused by a problem in the invoice, we must rely upon the client to raise that with us during the 14-day period. This same policy applies to fee arrangements which require the client to replenish fee deposits or make deposits for anticipated costs. From time to time clients have questions about the format of the bill or description of work performed. If you have any such questions, please ask them when you receive the bill so we may address them on a current basis. RVLVFTDALLARDA1753882.1 -2- Changes in Fee Arrangements and Budgets It may be necessary under certain circumstances for a client to increase the size of required advances for fees after the commencement of our engagement and depending upon the scope of the work. For example, prior to a protracted trial or hearing, the firm may require a further advance payment to the firm's trust account sufficient to cover expected fees. Any such changes in fee arrangements will be discussed with the client and mutually agreed in writing. Because of the uncertainties involved, any estimates of anticipated fees that we provide at the request of a client for budgeting purposes, or otherwise, can only be an approximation of potential fees. BEST BEST& KRIEGER LLP I 1 1 1 RVLITIPDALLAPDA1753982.1 -3-