Following is the 32nd post in a series from Parker Taylor Law Group about recent changes to the California Bar Association (CBA)’s Rules of Professional Conduct (RPC). This rule is found in Chapter 1 – “Lawyer-Client Relationship,” focusing on fees paid to an attorney for legal services. This Rule of Professional Conduct, as revised, is as follows:
Rule 1.5 Fees for Legal Services
(a) A lawyer shall not make an agreement for, charge, or collect an unconscionable or illegal fee.
(b) Unconscionability of a fee shall be determined on the basis of all the facts and circumstances existing at the time the agreement is entered into except where the parties contemplate that the fee will be affected by later events. The factors to be considered in determining the unconscionability of a fee include without limitation the following:
(1) whether the lawyer engaged in fraud or overreaching in negotiating or setting the fee;
(2) whether the lawyer has failed to disclose material facts;
(3) the amount of the fee in proportion to the value of the services performed;
(4) the relative sophistication of the lawyer and the client;
(5) the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(6) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(7) the amount involved and the results obtained;
(8) the time limitations imposed by the client or by the circumstances;
(9) the nature and length of the professional relationship with the client;
(10) the experience, reputation, and ability of the lawyer or lawyers performing the services;
(11) whether the fee is fixed or contingent;
(12) the time and labor required; and
(13) whether the client gave informed consent to the fee.
(c) A lawyer shall not make an agreement for, charge, or collect:
(1) any fee in a family law matter, the payment or amount of which is contingent upon the securing of a dissolution or declaration of nullity of a marriage or upon the amount of spousal or child support, or property settlement in lieu thereof; or
(2) a contingent fee for representing a defendant in a criminal case.
(d) A lawyer may make an agreement for, charge, or collect a fee that is denominated as “earned on receipt” or “non-refundable,” or in similar terms, only if the fee is a true retainer and the client agrees in writing after disclosure that the client will not be entitled to a refund of all or part of the fee charged. A true retainer is a fee that a client pays to a lawyer to ensure the lawyer’s availability to the client during a specified period or on a specified matter, but not to any extent as compensation for legal services performed or to be performed.
(e) A lawyer may make an agreement for, charge, or collect a flat fee for specified legal services. A flat fee is a fixed amount that constitutes complete payment for the performance of described services regardless of the amount of work ultimately involved, and which may be paid in whole or in part in advance of the lawyer providing those services.
Application:
Rule 1.5 of the CBA’s revised version of the RPC, as set forth above, has been significantly expanded from the previous version of the same regulation (Rule 4-200). Subdivisions (A) and (B)(1)-(11) of the old rule match subds. (a) and (b)(3)-(13) in the new rule. Subds. (b)(1)-(2) of the new Rule 1.5 are brand new. These additions detail two more factors to consider when deciding whether a legal fee is unconscionable: whether the lawyer engaged in fraud or overreached in setting the fee, and whether the lawyer failed to disclose material facts. The rest of the revised rule – subds. (c)(1)-(2), (d), and (e) – are new, not matching any of the language contained in the previous version of this rule.
The corresponding rule in the American Bar Association (ABA)’s Model RPC – Rule 1.5 – matches CBA’s revised Rule 1.5 in several spots, but also has several differences. Subd. (a)(1) in ABA’s rule is actually a combination of subds. (b)(12) and (b)(5) in CBA’s rule. ABA’s 1.5(a)(2) matches CBA’s 1.5(b)(6). And subds. (4) through (8) of ABA 1.5(a) match subds. (7) through (11) of CBA 1.5(b). Also identical between the two rules is the language in ABA 1.5(d)(1)-(2) and CBA 1.5(c)(1)-(2).
Subds. (b)(1)-(4) and (13) of CBA’s Rule 1.5 do not match any verbiage found in ABA’s 1.5. And the information included in ABA’s 1.5(e)(1)-(3) can be found in a completely separate rule in CBA’s RPC (Rule 1.5.1). Possibly the biggest differences between these two sets of Rules of Professional Conduct are in two large subdivisions – subds. (d) and (e) in the CBA’s rule, and subds. (b) and (c) in the ABA’s rule. The CBA addresses true retainers and flat fees in its rule, while the ABA discusses scope of representation and the basis of a fee being charged (communicated in advance to the client) and contingency fees.
Benefit: Generally speaking, the fact that this rule on legal fees has been expanded to include more details and considerations can help guide attorneys do a better job of properly calculating fees to charge their clients.
The information provided herein is informational only and should not be construed as legal advice or as an agreement for representation. This is not an advertisement. If you have an issue or dispute with your attorney, or are seeking advice with respect to your obligations, you should consult with an experienced attorney. Parker Taylor Law Group is a full-service litigation and transactional law firm. Mr. Parker has represented clients in professional malfeasance disputes for over 22 years. If you would like to schedule an initial consultation with Mr. Parker or his team, you can reach them at 916/996-0400 or at contact@parlawgroup.com. (An email to the law firm requesting a consultation does not create an attorney-client relationship or any agreement for representation by the firm.)
Rules of Professional Conduct, California Bar Association, American Bar Association, Legal Malpractice, Legal Representation, Client Rights, Legal Fees, Parker Taylor Law Group, Port Parker