Sorted by Commenter - Ethics - State of California

RRC – Rule 1.5 [4-200]
E-mails, etc. – Revised (6/1/2010)
Current rule 3-700(D)(2), which is carried into proposed Rule 1.16(e)(2), only
says that a lawyer must refund unearned fees. This leaves unclear that, under
current California law, there is no payment for legal services that can be made
non-refundable by agreement between lawyer and client to the extent that the
lawyer has not actually performed the services for which payment was made.
6. I agree with the suggested change to Comment [7] in Randy’s 5/28/10 redraft, but I
would eliminate the comma after “charged”.
7. I do not support Randy’s change in Comment [8] from “is not” to “might”. I would state
this definitely.
8. I do support Randy’s changes to the next sentence in [8] and to the parallel language in
[9] to the extent that it eliminates the repetition of language found in the Rule and adds
a reference to section 6148. However, I would not include the “such as ....” language.
Everything in 6148 is pertinent and entitled to equal weight. I would stop with the
reference. Additional editing to [9] will be needed if the Commission accepts my earlier
suggestions.
9. I don’t understand why Randy has suggested removing the Comment [10] reference to
true retainers. I agree with removing its reference to flat fees b/c that reference is
wrong. A flat fee is not the lawyer’s property until earned, so it can go in the client trust
account until then just as can any advance fee for legal services.
10. I agree with the spirit of Randy’s change to Comment [11], but the suggested drafting
might be taken by some readers to mean that a lawyer could escape discipline under
this Rule by refunding the excessive portion of a fee. That is not correct under the
“make an agreement for” language. I would end the first sentence with the first use of
“fee” in the second line of [11] and add a second sentence saying: “To the extent a fee
is unconscionable, it never can be considered to have been earned.”
11. I recommend adding to Rule 1.16, Comment [10]: “With respect to a lawyer’s
obligation to refund unearned fees under paragraph (e)(2), see Rule 1.5(e) and (f).”
May 31, 2010 Tuft E-mail to RRC:
1. I am in agreement with Raul and, I think, Kurt on this troublesome rule. While I agree that
Randy has made a valiant effort to make this a client protection rule, draft 12.2 as revised
still has major flaws and would be an unfortunate departure from California law. According
to the "Dashboard" and the "Introduction" the rule has been revised to permit
"nonrefundable" flat fees so long as certain requirements in the rules are satisfied. But no
California authority supports this approach and case law rejects the idea that a lawyer can
claim a right to a fee that has not been earned. (see page 210). Thus, under current law,
lawyers cannot make agreements that state "or imply" that the parties intend that the a flat
fee paid in advance "or otherwise(?)" is earned with paid.
2. Arizona's rule provides no help. Notice that the client has the right to terminate the
relationship does not change the fact that the lawyer has a contract that says that the fee
was "earned on receipt." Cooperman was not decided on the fact the client did not know he
or she could change counsel. Instead, the concern was that the client's unfettered right to
do so would be compromised by having paid the lawyer the entire fee in advance and
RRC - 4-200 [1-5] - E-mails, etc. - REV (06-01-10).doc -153-
Printed: June 2, 2010