In New Jersey, attorneys must submit fee disputes to arbitration, although clients have the option of taking complaints directly to court. In many states, however, it is not legal for a fee agreement to contain a mandatory fee arbitration clause. This is because your attorney, your professional adviser, is ethically prohibited from presenting you with an agreement in which you give up your right to sue the attorney in court. Despite this fact, lawyers are increasingly inserting mandatory arbitration clauses in their agreements. They argue with some plausibility that because arbitration is usually cheaper, faster and easier than a civil court trial, it's in everyone's best interest.
Arbitration can be binding or nonbinding.
An arbitration clause in an attorney-client fee agreement usually calls for binding arbitration. In it, you give up the right to sue in court and have your case decided by a jury. In exchange you will get a quick, final result. Arbitration by a local or state bar's fee arbitration panel is usually nonbinding. Beware that in some states, a nonbinding arbitration award often becomes binding and final if you fail to reject the decision within about 10 to 30 days.