Sorted by Commenter - Ethics - State of California
Sorted by Commenter - Ethics - State of California Sorted by Commenter - Ethics - State of California
No. Commenter Position 1 Comment on Behalf of Group? Rule 1.5 Fees for Legal Services. [Sorted by Commenter] Rule Paragraph My comments have addressed the proposed rule change within a very narrow range of my tax practice and focused on a particular civil tax issue. There are many other factual situations, including those within the criminal law context, that raise issues of legal exposure for both the attorney and client which have not been addressed in this letter. Hopefully, the Commission considering this rule change will reconsider its position regarding this Proposed Rule. Existing legal remedies and professional restraints on attorneys are, in my opinion, sufficient to protect clients. The obfuscation of property rights pertaining to flat fees appears counterproductive to the interests of clients. 9 Richard Moss D No 1.5(e) Abolishing non-refundable retainers will fundamentally alter the practice of law in California, create unnecessary complexity and confusion, seriously undermine the attorneyclient relationship, and prevent many clients from obtaining representation. Comment RRC Response Considering the significance of Paragraph (e) to lawyers and their clients throughout California and the controversy surrounding the Proposal, the Commission should have publicized and/or explained these changes to ensure that a cross-section of the bar knew of To address the commenter’s concerns but still provide for enhanced client protection, the Commission revised the approach to advance fee payments in paragraph (e) of the Rule to provide as follows: (2) a lawyer may charge a flat fee for specified legal services, which constitutes complete payment for those services and may be paid in whole or in part in advance of the lawyer providing the services. If agreed to in advance in a writing signed by the client, a flat fee is the lawyer’s property on receipt. The written fee agreement shall, in a RRC - 4-200 1-5 - Public Comment Chart - By Commenter - XDFT1.1 (5-26-10) doc.doc Page 10 of 28 Printed: 5/26/2010 44
No. Commenter Position 1 Comment on Behalf of Group? Rule 1.5 Fees for Legal Services. [Sorted by Commenter] Rule Paragraph Comment RRC Response their existence so that the membership could meaningfully respond or object before the Board of Governors’ tentative approval. Paragraph (e) prevents fully-informed clients and their lawyers from knowingly entering into a non-refundable retainer agreement that benefits clients. It ignores the reality that since the 19 th century, thousands of California lawyers have used some form of the nonrefundable retainer (that falls outside of the limited exceptions to Paragraph (e)’s ban on non-refundable retainers in (e)(1) and (2)). The Proposal ignores the fact that in October of 1992, the Board of Governors concluded that a non-refundable retainer “earned when paid” was a perfectly appropriate fee arrangement. The Board approved/endorsed the continued use of “fixed fees,” “flat fees,” and “non-refundable retainers” to be earned when paid, with title immediately transferring to the attorney so long as the written fee agreement explicitly spelled out the arrangement with the inclusion of an express statement that such fees paid in advance of legal services are “earned when paid.” Paragraph (e)(1) and Comment [8] prohibit the long-established practice of charging a manner that can easily be understood by the client, include the following: (i) the scope of the services to be provided; (ii) the total amount of the fee and the terms of payment; (iii) that the fee is the lawyer’s property immediately on receipt; (iv) that the fee agreement does not alter the client’s right to terminate the client-lawyer relationship; and (v) that the client may be entitled to a refund of a portion of the fee if the agreed-upon legal services have not been completed. The Commission did not make the requested revision, in part, because the Commission believes that charging a non-refundable fee is inimical to California’s strong policy of client protection. (See also proposed Rule 1.5 Model Rule Comparison Chart explanation of paragraph (e) of the rule.) RRC - 4-200 1-5 - Public Comment Chart - By Commenter - XDFT1.1 (5-26-10) doc.doc Page 11 of 28 Printed: 5/26/2010 45
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No. <strong>Commenter</strong> Position 1<br />
Comment<br />
on Behalf<br />
<strong>of</strong> Group?<br />
Rule 1.5 Fees for Legal Services.<br />
[<strong>Sorted</strong> <strong>by</strong> <strong>Commenter</strong>]<br />
Rule<br />
Paragraph<br />
My comments have addressed the proposed<br />
rule change within a very narrow range <strong>of</strong> my<br />
tax practice and focused on a particular civil<br />
tax issue. There are many other factual<br />
situations, including those within the criminal<br />
law context, that raise issues <strong>of</strong> legal<br />
exposure for both the attorney and client<br />
which have not been addressed in this letter.<br />
Hopefully, the Commission considering this<br />
rule change will reconsider its position<br />
regarding this Proposed Rule. Existing legal<br />
remedies and pr<strong>of</strong>essional restraints on<br />
attorneys are, in my opinion, sufficient to<br />
protect clients. The obfuscation <strong>of</strong> property<br />
rights pertaining to flat fees appears counterproductive<br />
to the interests <strong>of</strong> clients.<br />
9 Richard Moss D No 1.5(e) Abolishing non-refundable retainers will<br />
fundamentally alter the practice <strong>of</strong> law in<br />
<strong>California</strong>, create unnecessary complexity and<br />
confusion, seriously undermine the attorneyclient<br />
relationship, and prevent many clients<br />
from obtaining representation.<br />
Comment RRC Response<br />
Considering the significance <strong>of</strong> Paragraph (e)<br />
to lawyers and their clients throughout<br />
<strong>California</strong> and the controversy surrounding<br />
the Proposal, the Commission should have<br />
publicized and/or explained these changes to<br />
ensure that a cross-section <strong>of</strong> the bar knew <strong>of</strong><br />
To address the commenter’s concerns but still<br />
provide for enhanced client protection, the<br />
Commission revised the approach to advance fee<br />
payments in paragraph (e) <strong>of</strong> the Rule to provide as<br />
follows:<br />
(2) a lawyer may charge a flat fee for specified<br />
legal services, which constitutes complete<br />
payment for those services and may be paid<br />
in whole or in part in advance <strong>of</strong> the lawyer<br />
providing the services. If agreed to in<br />
advance in a writing signed <strong>by</strong> the client, a<br />
flat fee is the lawyer’s property on receipt.<br />
The written fee agreement shall, in a<br />
RRC - 4-200 1-5 - Public Comment Chart - By <strong>Commenter</strong> - XDFT1.1 (5-26-10) doc.doc Page 10 <strong>of</strong> 28 Printed: 5/26/2010<br />
44
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