Sorted by Commenter - Ethics - State of California

to safeguard clients from excessive charges where a client chooses to discharge counsel, or other
unforeseen circumstances arise such as the death of a client or counsel prior to the conclusion of
a matter.
NACDL believes that Proposed Rule 1.5(e)(2) is unsound on a number of additional
grounds. First, it provides that a fee is the "lawyer's property on receipt," but a client also "may
be entitled to a refund" under certain circumstances. This language is internally inconsistent and
confusing. Clarity, rather than confusion, best serves clients and counsel with respect to retainer
agreements. Second, it has no counterpart in the ABA Model Rules, and there is no national
authority to provide guidance on how the provision may be interpreted by California disciplinary
authorities or courts. Accordingly, it may create uncertainty and the potential for protracted and
costly litigation, rather than certainty, which best serves the interests of both clients and counsel.
Third, Sub-parts (e)(2)(i), (ii) and (iv) are equally applicable to all types of retainer agreements,
but placing them in a sub-part that pertains only to flat fee agreements creates the inaccurate
negative inference they may not apply to hourly or contingent fee agreements. Fourth, it could
discourage detailed descriptions of the “agreed-upon legal services” in written retainer
agreements because it encourages third parties to assert an interest on a previously paid fee on
the grounds that "the agreed-upon legal services have not been completed." This would increase
disputes between clients and counsel.
Finally, NACDL is concerned that Rule 1.5(e) is among a large number of new rules that
were provisionally adopted in a manner that may have deprived the Board of Governors of the
State Bar of California (the Board) of the insights of lawyers, and other members of the public,
who have knowledge and experience with flat fee arrangements. NACDL understands that Rule
1.5(e) was among a number of provisions adopted by the Board without the prior public
comment required by Rule 1.10 of the Rules of the State Bar of California. See
http://calbar.ca.gov/calbar/pdfs/rules/Rules_Title1.pdf. NACDL believes that public comment in
accordance with Rule 1.10 is critical to ensure fairness and the adoption of a sound and informed
rule. Although the Board’s adoption was subject to potential reconsideration following a period
of public comment for all rules provisionally adopted, NACDL believes that this does not
provide a sufficient opportunity for the public scrutiny that is essential for a rule that
substantially impacts the Sixth Amendment right to counsel and disproportionately burdens
clients of limited means.
NACDL appreciates the opportunity to comment on this rule.
cc via email: Howard B. Miller, Esq.
Very truly yours,
Cynthia Hujar Orr
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