Sorted by Commenter - Ethics - State of California

Under the revised Proposal, the fee continues to belong to the client until earned
unless it fits in the very narrow definition of "true retainer" (which in real life experience
and in the case law, is rarely, if ever, a substantial amount compared to what would be
necessary for a civil or See Proposed new Rule
discussion on pp. 16- supra regarding the Proposal' s ban on nonrefundable
Although a narrow
nonrefundable" flat fee defined as the "complete payment" for "specified legal services
(meaning the entire representation in a case, including trial see discussion at pp. 38infra
about Comment (5)), such a , forfeiture, restraint or
attachment resulting from a civil, criminal, or an SEC process. This will occur
significant portion of the Proposal' s "nonrefundable" flat fee (that covers all services that
are contingent upon the , i.e. trial) is
because it is not in
43 The controlling
lawyer s property.
the controlling factor not
describe the transaction and is inserted to prevent seizure or restraint of legal fees.
Even if the Board of Governors
in public
sophisticated area of the law about the impact of this Proposal, it will still subject lawyers
to an enormous risk, extensive extrinsic litigation, and the unpalatable option of hiring a
separate attorney to represent the client and his lawyer of choice in a separate restraining
order, fee forfeiture or jeopardy
reason to depart from the proven
retainers as a result of 40 years of
litigation, the unsupported assertions of the Commission that 1. 5( e) has
restraint/forfeiture problems will eventually be embraced by the federal and state courts.
The additional advantage of the
having the fee earned in advance, the lawyer can , if the fee
legitimate when received, they will not risk generally forfeiting the fee if they "learn too
much" about the client's source of , therefore, will not face any
to thoroughly investigating the See Caplin Drysdale, supra 491 U. S. at 632
n.10.
43 When
this portion of
nonrefundable" flat fee will likely have to be placed into a trust account.
171