Sorted by Commenter - Ethics - State of California

May 25, 2010 Difuntorum E-mail to Drafters, cc RRC:
RRC – Rule 1.5 [4-200]
E-mails, etc. – Revised (6/1/2010)
Please consider the attached redraft of the rule. It contains my suggested revisions to the
Commission’s regulation of true retainers and flat fees. My objective was to address the
concerns of the opposition comments as well as issues raised by the existing Commission
minority dissent. My view is that there is a real issue of potential confusion when attempting to
address the issue of “earned on receipt” and so my redraft backs off and takes a less is more
approach. Note that my version of (e)(2) limits the required disclosures to only flat fees which
are paid in advance.
In addition, attached for historical reference is the letter from the Supreme Court identifying
issues of confusion in the Commission’s 1992 submission.
Attached:
RRC - 4-200 [1-5] - Rule - DFT12 (05-25-10)RD - Cf. to DFT11 (12-14-09).doc
RRC - 4-200 [1-5] - 05-11-95 S.Ct. Letter re 3-700 & 4-100.pdf
May 25, 2010 Tuft E-mail to RRC:
Leave it to Randy to bring clarity to this muddled discussion. I am all too familiar with the
Court's letter remanding the prior commission's submission of rules 3-700 and 4-200 since I was
given the thankless task on COPRAC to come up with a rule in response to the court's letter
that reconciles the treatment of advance fees with the requirement that all unearned fees be
refunded to the client. Randy's draft is a step in the right direction. However, I personally favor
deleting proposed rule 1.5(e), particularly in view of the comments received that demonstrate
wide spread confusion over advance fees that this rule engenders. To return to basic principles,
no advance fee paid by a client is the lawyer's property unless and until the fee is earned and
that includes fixed or flat fees. A true retainer by definition is earned on receipt but fees paid in
advance of rendering services for which the fee is paid are not earned on receipt and are
refundable unless earned. Whether a fee is earned depends on the particular facts.
Washington's rule addresses flat fees in the context of a requirement that all advance fees be
placed in a client trust account. California does not currently have that requirement and, thus,
our proposed rule serves a different purpose than Washington by allowing lawyers to contract
with clients to deem a flat fee paid in advance to be the lawyer's property whether or not the
lawyer actually earns the fee. A rule that allows lawyers to contact in this manner may benefit
lawyers but is not in the public interest. If we continue down this road to accommodate certain
members of the criminal defense bar, we will likely receive another letter similar to the one the
bar received in 1995.
May 25, 2010 Sondheim E-mail to Difuntorum, cc RRC:
I believe the portion of the rule I suggested in my May 25 email does not have the type of
ambiguity that concerned the Supreme Court in 1995 because it indicates that if the lawyer
withdraws before the completion of services or otherwise fails to perform the services
contemplated there may be a refund. In 1995 the Supreme Court was concerned that the rule
proposed seemed to exempt advance fees from the requirement of a possible refund.
RRC - 4-200 [1-5] - E-mails, etc. - REV (06-01-10).doc -143-
Printed: June 2, 2010