Corporate governance of banks

The corporate governance of banks is different and unique from that of the other organizations. This is because the activities of the bank are less transparent than other organizations. Thus, it becomes difficult for shareholders and creditors to monitor the activities of the bank. The situation becomes even more difficult when a major part of the share capital is with government. Additionally, banks also differ from most other companies in terms of the complexity and range of their business risks, and the consequences if these risks are poorly managed.

The Banking Sector in India has definitely not remained unaffected to the developments taking place worldwide. Enhancing the level of corporate governance structure of Indian banks is imperative. The regulatory bodies in India are the Reserve Bank of India and the Securities Exchange Board India. The RBI prescribes prudential principles and norms. The RBI performs the corporate governance function under the Board for Financial Supervision (BFS).

The Basel Accord was first established in 1988 by the Basel Committee on Banking Supervision under the Bank for International Settlements. The BIS was established on 17 May 1930 and is the world's oldest international financial organization. The Basel Committee was established by the central-bank Governors of the Group of Ten countries in 1974. It meets regularly four times a year. It has four main working groups. The Basel Committee on Banking Supervision provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide.

The Basel Accord was established to provide a set of minimum capital requirements to banks. According to this accord, the banks would be required to maintain a minimum capital requirement a propos the loans given out by them. The 1988 Basel Accord also known as Basel I primarily focused on credit risk. The Central Banks of several countries that have agreed to become signatories have been given the responsibility of enforcing the provisions. In India, the Reserve Bank of India shoulders this responsibility.

The second of the Basel Accords, Basel II was first published in June 2004 and established in 2005. This accord widened the scope of Basel I by establishing capital requirements for market risk and operational risk, in addition to credit risk. Basel II also included provisions which allowed banks to use advanced statistical methods to compute possible losses for which they were required to hold capital. Therefore, international banks had an advantage as they could lower their capital requirements through the use of advanced models.

The third of the Basel Accords, Basel III was created in response to the flaws in financial regulation which led to the crisis and also due to appeals for the reform of capital adequacy and liquidity standards for banks.

According to the Basel Committee Report of 1999, Banks have to maintain a certain level of transparency and disclosures in their statements. The annual report should disclose a number of factors relating to the operations of the banks such as accounting ratios, business per employee, related party disclosures and information.

Recent Steps Taken by Banks in India for CG

•                   Induction of non-executive members on the boards

•                   Constitution of various Committees like Management committee, Investor’s Grievances committee, ALM committee, etc.

•                   Role of Independent auditor

•                   Gradual implementation of prudential norms as prescribed by the RBI,

•                   Introduction of Citizens Charter in banks

•                   Implementation of “Know Your Customer” concept

•                   The Board of Directors and top management of the Bank are chiefly responsible for good CG.

Frauds by others

•                   Forgery and altered cheques -This type of fraud involves altering the amount on the face of a cheque for nefarious purposes

•                   Stolen cheques -This type of fraud is initiated by the theft of a few cheques. Then accounts are opened using fake identities, and the suitably altered stolen cheques are deposited, followed by convenient withdrawal of the amount. In a similar way, stolen blank cheque books are misused by fraudsters.

•                   Accounting fraud -Overstating sales and income, dishonest accounting and inflating the worth of the company’s assets to hide that the company is actually functioning in loss constitute Accounting Fraud. E.g., Satyam.

•                   Credit card fraud - Credit cards lend themselves to several opportunities for fraud. Made of three PVC sheets, of which the central sheet is known as the core stock, credit cards carry substantial data. Credit card frauds can be carried out in several ways.

•                   Frauds committed by auditors

•                   Power of Attorney fraud- A “Power of Attorney” (“POA”) is a legal document through which the donor grants the power to his attorney to ‘step into the donor’s shoes’ and conduct legal and financial matters on the donor’s behalf.

•                   Phishing- In this type of fraud, sensitive data such as account numbers, login Independent Directors (IDs), passwords, and other verifiable information are extracted from gullible individuals either through fraudulent telephone calls or emails. These data are then misused for dishonest purposes, including identity theft. Phishing is most often perpetrated through mass emails and spoofed websites.

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APPLICATION FOR RERA REGISTRATION

Ø Application of registration u/s4 to be made as per the Form ‘A’ prescribed under Rule 3(3) and along with the same declaration has to be filled in Form ‘B’ as per Rule 3(6).

Ø The concept of 70:30 is mentioned in section 4(2)(i)(d).

Ø Registration is guaranteed under section 5.

Ø Registration can be revoked u/s 7.

Registration and obligation of real estate

Ø As per RERA it now mandatory that real estate agents selling the premises in Real estate project have to register u/s9 by complying as per the form ‘G’ prescribed under Rule 11(2)

Ø As per Rule 12(4) the registration shall be valid for period of 5years.

Ø The provision for renewal in respect of Real estate agent should not be done as per Rule 13.

Ø There are various obligation caused on Real estate agent under Rule 14

Ø Revocation of registration of breach of provision mentioned in Rule15.

Ø As per the Rule 16 Real estate agents has to maintain and preserves separate books, accounts, documents. 70% of realization from allottees in a separate bank account

1.    The Act mandates that a promoter shall deposit 70% of the amount realized from the allottees, from time to time, in a separate account to be maintained in a scheduled bank. This is intended to cover the cost of construction and the land cost and the amount deposited shall be used only for the concerned project.

2.    The promoter shall be entitled to withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project. However, such withdrawal can only be made after it is certified by an engineer, an architect and chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project

3.    The promoter is also required to get his accounts audited within six months after the end of every financial year by a practicing chartered accountant. , Further, he is required to produce a statement of accounts duly certified and signed by such chartered accountant, and it shall be verified during the audit that (i) the amounts collected for a particular project have been utilised for the project; and (ii) the withdrawal has been in compliance with the proportion to the percentage of completion of the project.

The application for registration must disclose the following information:

Ø Details of the promoter (such as its registered address, type of enterprise such proprietorship, societies, partnership, companies, competent authority)’.

Ø A brief detail of the projects launched by the promoter, in the past five years, whether already completed or being developed, as the case may be, including the current status of the projects, any delay in its completion, details of cases pending, details of type of land and payments pending.

Ø An authenticated copy of the approval and commencement certificate received from the competent authority and where the project is proposed to be developed in phases, an authenticated copy of the approval and commencement certificate of each of such phases.

Ø The sanctioned plan, layout plan and specifications of the project, plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof and the locational details of the project.

Ø Performa of the allotment letter, agreement for sale and conveyance deed proposed to be signed with the allottees.

Ø Number, type and carpet area of the apartments and the number and areas of garages for sale in the project.

Ø The names and addresses of the promoter's real estate agents, if any, and contractors, architects, structural engineers affiliated with the project.

A declaration by the promoter supported by an affidavit stating that:

Ø He has a legal title to the land, free from all encumbrances, and in case there is an encumbrance, then details of such encumbrances on the land including any right, title, interest or name of any party in or over such land along with the details;

Ø The time period within which he undertakes to complete the project or the phase; and

Ø 70% of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.

DUTIES OF PROMOTER

Ø Upon receiving the login id and password Promoter has to create his web page on the website of the authority

Ø To enter all the details of the proceed project on his web page

Ø Once in three months the promoter has to update the data on web page in respect of booking status, approvals, status of the project etc..

Ø Advertising material should reflect should the registration details of the promoter.

Ø Promoter has to abide by all the obligation under section 11(3) at time of time of booking

Ø As per the section 12 promoters will solely responsible for on regards as the advertisement of prospectus.

Ø As per section 13 promoter cannot accept more than 10% of the cost of apartment without executing the contract.(in MOFA it is used to be 20 %)

Ø As per section 15 promoters cannot transfer the Real estate project to the third party without obtaining the consent 2/3rd of the allotters.

Ø  As per section 16 promoters has to insure Real estate projects in respect of land and building and construction of Real Estate project.

Ø As per s.17 promoter has to transfer the title when the norms are fulfilled for its transfer.(this done with help of amendment of land titling bill 2010 which gives the entire mechanism of land titling

 BENEFITS OF THE CUSTOMER

The Authority shall in order to facilitate the growth and promotion of a healthy, transparent, efficient and competitive real estate sector make recommendations to the appropriate Government of the competent authority, as the case may be, on,—

(a) protection of interest of the allottees, promoter and real estate agent;

(b) creation of a single window system for ensuring time bound project approvals and clearances for timely completion of the project;

(c) creation of a transparent and robust grievance redressal mechanism against acts of ommission and commission of competent authorities and their officials;

(d) measures to encourage investment in the real estate sector including measures to increase financial assistance to affordable housing segment;

(e) measures to encourage construction of environmentally sustainable and affordable housing, promoting standardisation and use of appropriate construction materials, fixtures, fittings and construction techniques;

(f) measures to encourage grading of projects on various parameters of development including grading of promoters;

 (g) measures to facilitate amicable conciliation of disputes between the promoters and the allottees through dispute settlement forums set up by the consumer or promoter

associations;

(h) measures to facilitate digitization of land records and system towards conclusive property titles with title guarantee;

(i) to render advice to the appropriate Government in matters relating to the development of real estate sector;

(j) any other issue that the Authority may think necessary for the promotion of the real estate sector.

CIVIL COMPLAINT

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

 (1) No court shall take cognizance of any offence punishable under this Act or the rules or regulations made there under save on a complaint in writing made by the Authority or by any officer of the Authority duly authorised by it for this purpose.

(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.

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ETHICAL ISSUES IN CORPORATE GOVERNANCE

Corporate fraud is defined as “one that occurs within an organization or by its owners or managers and involves deliberate dishonesty to deceive the public, investors or lending companies, usually resulting in a financial gain to the individuals or organization.” Most of the corporate frauds fall under the categories of asset misappropriation, money laundering, accounting frauds, frauds committed by senior management, bribery and corruption and regulatory non-compliance. It is practices such as these that are denting the image of our financial system. The organizations, therefore, must be attentive to these challenges and adopt pro-active anti-fraud measures rather than being reactive. Otherwise, organizations and entire societies have to bear the risk of fraud and its consequences, which will become more devastating.

Keys to solving ethical issue

1.        Sound Risk Management Framework

2.        Data Management and analysis

3.        Code of Conduct for Board of Directors

4.        Internal & External control system

5.        Forensic Accounting

6.        Independent auditor’s role

7.        Role of top management

8.        Whistle blowing policy

A. Sound Risk Management Framework

With the occurrence of such major financial crisis globally a lot of emphasis is laid on strengthening risk management practices for both financial and non-financial institutions. However, with respect to the financial institutions, it is evident that much attention is being paid to financial risk such as market risk, credit and liquidity, despite the focus being on managing operational risk. Accordingly, major reports have been published by many organizations, such as the Basel Committee, Institute of International Finance and others that highlight the need for effective risk management in financial institutions (OECD report, 2014).

B. Data Management and Analysis

An organization’s ability to generate revenue, manage the expenses and extenuate risks is determined by its ability to successfully share, store, retain and retrieve the escalating data. Effective data management practices can bring in large customer base, improve customer relationships which in turn help in generating revenue. According to American Institute of Certified Public Accountant (AICPA) report 2013, accountants play an important role in governing the organization’s data and ensure that it is in accordance with the CG practices of the organization. Since any financial institutions’ operation is based entirely on its customer base, governing the ever-increasing customer data becomes an important part of its CG practices.

C. Strict code of Conduct for Board Of Directors

Although people have always questioned the need for having corporate boards, it is empirically proven that their presence matters a lot at the time of organizational crisis. This can be verified as in the case of Enron, Worldcom and Parmalat scandals where the directors in particular were held liable for the fraud. Consequently, more attention is being paid to research on the role of corporate boards. Uzun, Szewczyk and Verma (2004) have demonstrated that the composition of the board and the structure of the supervisory committee were significantly related to occurrence of corporate frauds. In contrast, the study also found that the larger the number of independent outside directors, lesser was the possibility of occurrence of corporate frauds in U.S during the period 1978-200. Nevertheless, not many papers are available on the composition and effectiveness of corporate boards in the financial sector, which motivated this study to investigate the relationship between CG and fraud.

D. Internal and External Control Systems

Internal control system refers to the approved policies and procedures followed by the management in order to carry out smooth and proper functioning of business thereby avoiding various types of risks such as improper maintenance of accounts, unauthorized transactions and frauds which may affect the organization’s financial performance.

On the other hand external control system refers to the government regulations, market competition, media exposure, takeover activities, public release and assessment of financial statements. In spite of the fact that the company’s governance process also comprises of government regulations the role of external control systems in the financial sector is still a mystery.

E. Forensic Accounting

Forensic accounting is a special field related to accountancy profession where the accountants implement their accounting, auditing and investigative skills to detect frauds, bankruptcy and other litigations. The role of forensic accountants in investigating corporate frauds has long been identified by many countries and they now play a major role in probing corporate frauds. However the field is still in its nascent stage in India due to rapid increase in “white collar crimes” and the notion that the law enforcement agencies do not have sufficient time or expertise to expose the frauds committed. Therefore the researcher anticipates studying the role of forensic auditors and auditing process which may determine the quality of CG practices in the banking sector.

F. Independent auditor’s role

The purpose of designing a set of codes for CG is to enhance the efficiency of auditing process in order to retain the interests of all the stakeholders and investors. This is where the role of independent auditor comes into picture. The auditor has all the authority to capture the offender, eliminate bias from financial reports of the company and report objectively. Recently a lot of emphasis is placed on the role of auditor with respect to CG as auditors’ are solely responsible in detecting the scam. On the contrary, the auditor’s must not be forced into any kind of obligation which may bind his hands from discharging his duties veritably.

G. Role of top management

According to the Basel Committee report on banking supervision published in the year 2014 (Bank for International Settlements, 2014), it is the responsibility of the senior managers to carry out and manage all the activities of the banks in accordance with the business strategy, risk policies and other strategies as approved by the board. The top management’s personal conduct also contributes significantly in achieving “sound CG” along with the members of the board.

H. Whistle blowing policy

Whistle blowing policy in a company refers to the particular internal policy designed for its employees to report to the management about any suspicious behavior or frauds or any kind of infringement in company’s norms or code of conduct. The policy enables an employee to report to the senior managers or top management directly without informing his immediate manager(s). Because of this advantage, whistle blowing policy is considered to be a valuable tool in an organizations effective CG strategy.

The issues of corporate governance

1.        Asset Misappropriation

2.        Money laundering

3.        Accounting frauds

4.        Frauds committed by senior management

5.        Bribery and corruption

6.        Regulatory non-compliance

7.        Practice of Insider Trading and Selective leak of sensitive data

A. Asset Misappropriation

Asset misappropriation refers to the misuse of a company’s assets or resources for an individual’s personal use at the expense of the company. Sometimes it may even involve stealing of the company’s assets for personal interests and producing false records to mask the committed fault. Studies have shown that though asset misappropriation might not be visibly significant, disregarding the same may become “an incurable disease” and consequently affect the financial status due to unnecessary expenditure incurred.

B. Money laundering

Money laundering is gaining illegal money from criminal activities and projecting it to be a source from legal proceedings by concealing its actual source of inflow, ownership and use of funds.

C. Accounting frauds

Accounting frauds refer to deliberate falsification introduced in the financial statement to gain unlawful financial advantage by employees, management or any other individuals related to the organization. On the other hand, accounting irregularities arise due to inadvertent misrepresentation of facts or omission of certain entries in the financial statements. Both these mistakes lead to economic problems which ultimately find its root cause in fruitless CG mechanism and its inability to detect and prevent such faults. For instance the financial irregularities that happened with Enron, WorldCom and Satyam, all point towards a lack of proper CG at some point for the tragedy occurred.

D. Frauds committed by senior management

Also known as “white collar crime”, frauds committed by the members of the top management directly impacts the shareholders, employees and society as a whole. Frauds committed may not always be in terms of capital. It may also include the involvement of top managers in certain activities that are against the rules and regulations of the company or refrain themselves from taking necessary action after being aware of any illegal activity happening in the organization or certain disastrous decisions taken by the managers.

E. Bribery and corruption

Studies have demonstrated that poor CG practices can breed corruption. Corruption pertains to “the misuse of public office for private gains and has both demand and supply sides to it”. CG practices can be affected by bribery and corruption practices of the members involved at various levels including the board members, to managers, employees, shareholders and stakeholders. Good CG is expected to reduce the level of corruption by imposing strict constraints on the officials.

F. Regulatory non-compliance

For any organization it is mandatory to comply with the legal framework prescribed by the respective boards apart from the internal rules and regulations of the company. In India the Securities and Exchange Board of India imposes the rules and regulations and frames the guiding the guiding principles for companies to protect the interests of the investors. Apart from this, companies are also required to comply with the provisions of Companies Act 1956, Kumara Mangalam Birla report on CG, accounting standards issued by ICAI and additional listing agreements with the stock exchange they are listed with.

G. Practice of Insider trading and Selective leak of sensitive data

Insider trading indicates the practice of buying and selling company’s securities illegally without the knowledge of the public with the intention of making profit or preventing loss in the securities transactions of the company. In India it is considered as illegal trading by SEBI. In this case, the management of the company may take advantage of the confidential and price-sensitive data to make profit for themselves without informing the public investors.

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Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

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SHOULD INDIAN LAWYERS BE ALLOWED TO WORK ON CONTINGENCY

The Bar Council of India prohibits advocates from charging fees to their clients contingent on the results of litigation or pay a percentage or share of the claims awarded by the Court. Bar Council of India Rules: Part VI, Chapter II, Section II, Rule 20 which reads as under:

“20. An advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof.”

Many have the misconception that the reason why lawyers do not work on a contingency basis is that such an agreement between the lawyer and client would be a wagering one, and therefore are void. Apart from the Bar Council Rules which have expressly prohibited it, in the landmark case of Ganga Ram v. Devi Das, 61 P.R. (1907), such an agreement was held to be void for being against public policy and also against professional ethics. 

 However, although prohibited, in several cases, especially those before the lower Courts, clients are charged on the percentage of claim amount that the lawyer is able to recover. However, the practice though prevalent, has hardly led to disputes and is can seldom be proved. Reason being that the contingency agreement is always oral and highly informal. It must be remembered that such an agreement is not only void but also would lead to the lawyer facing disciplinary action by the Bar Council and a chance of losing one’s license to practice at the Bar.

Contingency fees exist in the civil realm because the attorney "attaches" their fee to the resulting award; if there is no award, there is no fee. Many states also bar attorneys from taking divorce cases on contingency for similar reasons -- there's not an "award" but rather a separation of property. Further, it's an ethical issue that could result in the attorney preferring a plea bargain over going to trial, in order to further their interest in securing payment from the client, rather than taking the client's best interest. This isn't as much of a concern in the civil realm, because someone's not going to prison; they're just settling a dispute between private parties.

The main reason for the express prohibition in the Bar Council of India Rules is probably because lawyers must not be allowed to have ulterior interests in the outcome of the case. They are considered to be of a ‘noble profession’, and are officers of the Court. Their main objective must be Justice and not financial gain.

 If they were interested in the matter, they might adopt unfair means or allow their emotions to get the best of them. Sometimes, the Court may grant an alternate remedy then the one paid for, which the contingency agreement does not cover. In such case it is difficult to determine the lawyer’s fee. This may lead to unimaginable amount of disputes between lawyer and client.

Although theoretically this may seem like a very good reasoning, but in practice the Contingency Fee system is a boon to poor clients. There must be several people in India, who even though they have been wronged, do not take legal action because of the legal expenses and the fear that even after somehow being able to meet those expenses, still losing the suit. If the abovementioned rule is removed from the Bar Council of India Rules, then this transaction can be developed. Written and formal documents can come into existence with clear cut clauses for every possible outcome, as well as whether out-of-pocket expenses are also to be paid are also contingent

K.L. GAUBA VS UNKNOWN

This is an application under our disciplinary jurisdiction against Mr. K. L. Gauba. It came to the notice of this Court that Mr. Gauba, who is an advocate of this Court, had entered into an agreement with his client, one Amarnath Bhardwaj, which appeared to be champertous and this Court took the view that the circumstances under which the said agreement had been entered into and the terms of the agreement itself called for an investigation under the disciplinary jurisdiction, and so it was decided to refer this case to the Bar Council.

Accordingly, on May 1, 1953, the learned Chief justice appointed three members of the Bar Council to constitute a Tribunal under Section 11 of the Bar Councils Act for inquiring into this case. Notice of the intended inquiry was served on Mr. Gauba in due course. He appeared before the Bar Council Tribunal, gave his explanation on July 10 and filed an additional statement on August 6, 1953. The matter was then heard by the Members of the Tribunal and they made the report on December 16, 1953. The Tribunal has held that the respondent had entered into an agreement with the client that he should be given half of the profits of the litigation in case of success and this in the opinion of the Tribunal amounted to professional misconduct. After this report was received, notice of the hearing of the present application was served on Mr. Gauba and the matter has thus come before us for final disposal.

It would thus seem that the American decisions are based upon the statutory law upon the subject as obtaining in America. In India, however, we have got the provisions ofSection 23 of the Indian Contract Act according to which the agreements like the agreement in this case being against public policy must be deprecated. I, therefore, agree with my learned brother that Mr. Gauba's conduct in this case was grossly unprofessional and most objectionable

Law Commission fails    

The Law Commission of India has failed to address the issue of excessive litigation cost in the country which is predominantly the result of unfair levy of fees by lawyers. In its 240th report (May 2012), the commission examined several state rules on fees and strangely, pleaded for enhancement of fees! According to the report, fee prescribed in the rules is ‘so meager’.  

Rules do not cover all types of cases or courts and, therefore, the major varieties of fee are outside their ambit. Levying of fee by lawyers in India is not by and large governed by any rules at all, and even in areas covered by the rules, as in civil litigation, they are honored only in their breach.  

Ø The public view of eminence in advocacy also needs to be changed.

The artificial and luxurious misconceptions about professional greatness need to be exposed and fairness in fixation of remuneration recaptured. While recognising the labour behind research, travel and homework, the litigant also should be guaranteed fairness in dealings. We are yet to realise the significance of proper guidance and genuine legal consultation. It is reasonable to charge for a fair advice after due consultation than charging exorbitantly for a fruitless litigation based on an erroneous or casual advice.

The country should change its litigation habits. More egalitarian and sophisticated methods of dispute resolution like arbitration and conciliation are to be encouraged in areas ranging from business to matrimonial disputes. The iron wall between legal profession and society is only to be smashed and the profession demystified. There is a real need to evolve a national movement for fair advocacy which should take in lawmen as well as laymen from all the states. 

Types of Legal Fees:-

The type of fee arrangement that you make with your lawyer will have a significant impact on how much you will pay for the services. Legal fees depend on several factors, including the amount of time spent on your problem; the lawyer's ability, experience, and reputation; the novelty and difficulty of the case; the results obtained; and costs involved. There will be other factors such as the lawyer's overhead expenses (rent, utilities, office equipment, computers, etc.) that may affect the fee charged.

There are several common types of fee arrangements used by lawyers:

• Consultation Fee: The lawyer may charge a fixed or hourly fee for your first meeting where you both determine whether the lawyer can assist you. Be sure to check whether you will be charged for this initial meeting.
• Contingency Fees: The lawyer's fee is based on a percentage of the amount awarded in the case. If you lose the case, the lawyer does not get a fee, but you will still have to pay expenses. Contingency fee percentages vary. A one-third fee is common. Some lawyers offer a sliding scale based on how far along the case has progressed before it is settled. Courts may set a limit on the amount of a contingency fee a lawyer can receive. This type of fee arrangement may be charged in personal injury cases, property damage cases, or other cases where a large amount of money is involved. Lawyers may also be prohibited from making contingency fee arrangements in certain kinds of cases such as criminal and child custody matters. Contingency fee arrangements are typically not available for divorce matters, if you are being sued, or if you are seeking general legal advice such as the purchase or sale of a business.
• Flat Fees: A lawyer charges a specific, total fee. A flat fee is usually offered only if your case is relatively simple or routine such as a will or an uncontested divorce.
• Hourly Rate: The lawyer will charge you for each hour (or portion of an hour) that the lawyer works on your case. Thus, for example, if the lawyer's fee is $100 per hour and the lawyer works 5 hours, the fee will be $500. This is the most typical fee arrangement. Some lawyers charge different fees for different types of work (legal research versus a court appearance). In addition, lawyers working in large firms typically have different fee scales with more senior members charging higher fees than young associates or paralegals.
• Referral Fee: A lawyer who refers you to another lawyer may ask for a portion of the total fee you pay for the case. Referral fees may be prohibited under applicable state codes of professional responsibility unless certain criteria are met. Just like other fees, the total fee must be reasonable and you must agree to the arrangement. Your state or local bar association may have additional information about the appropriateness of a referral fee.
• Retainer Fees: The lawyer is paid a set fee, perhaps based on the lawyer's hourly rate. You can think of a retainer as a "down payment" against which future costs are billed. The retainer is usually placed in a special account and the cost of services is deducted from that account as they accrue. Many retainer fees are non-refundable unless the fee is deemed unreasonable by a court. A retainer fee can also mean that the lawyer is "on call" to handle your legal problems over a period of time. Since this type of fee arrangement can mean several different things, be sure to have the lawyer explain the retainer fee arrangement in detail.
• Statutory Fee: The fees in some cases may be set by statute or a court may set and approve a fee that you pay. These types of fees may appear in probate, bankruptcy, or other proceedings.

With all types of fee arrangements you should ask what costs and other expenses are covered in the fee. Does the fee include the lawyer's overhead and costs or are those charged separately? How will the costs for staff, such as secretaries, messengers, or paralegals be charged. In contingency fee arrangements, make sure to find out whether the lawyer calculates the fee before or after expenses.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

We have a team of highly qualified professionals and time to time training is provided by us as per the requirements. Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.

Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

Contact at parascs@gmail.com or refer website www.pnjlegal.com