Sorted by Commenter - Ethics - State of California
Sorted by Commenter - Ethics - State of California
Sorted by Commenter - Ethics - State of California
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May 25, 2010 Martinez E-mail to Sondheim, cc RRC:<br />
RRC – Rule 1.5 [4-200]<br />
E-mails, etc. – Revised (6/1/2010)<br />
Harry, under your proposed version <strong>of</strong> (iii) the fee isn't earned until the services are performed.<br />
This means the fee is still the client's property until the services are performed and can be<br />
seized <strong>by</strong> third parties. Under my version, the fee is earned on receipt "subject to" a refund.<br />
Perhaps the fix is to add the words "on receipt" after "earned in full" in you version.<br />
May 25, 2010 Melchior E-mail to RRC:<br />
I am quite sure that I dissented from our treatment <strong>of</strong> advance fees but do not have the time to<br />
get involved in this argument at the moment.<br />
I had a case recently in which the lawyer wrote an engagement letter which stated as clearly as<br />
possible that the fee was an availability fee, earned upon engagement. But he then added that<br />
he would not charge for some hours <strong>of</strong> time because <strong>of</strong> the availability payment, and the OCTC<br />
charged that it was NOT an availability fee despite its language. I had to study the field, and I<br />
concluded that the Review Department had undermined what I read as the Supreme Court's<br />
intent in the Baranowsky case, and that now, in <strong>California</strong>, there were availability fees in the<br />
abstract only -- i.e., if the client paid the lawyer ONLY for availability and NO work would be<br />
credited against that payment. Of course, in real life that doesn't happen.<br />
I think that anything short <strong>of</strong> going back to Baranowsky undermines the positions which<br />
bankruptcy and criminal defense lawyers MUST take, and that we are engaging in (or in any<br />
event supporting) a destructive enterprise if we don't straighten this out. But I don't think that<br />
my views have a chance.<br />
My apologies for not being able to get more involved; but client work comes first. This debate<br />
explains one more reason why our work is not helpful, though we have all certainly tried.<br />
May 25, 2010 Martinez E-mail to Sondheim, cc RRC:<br />
Harry, I'm fine with it but, I think we need a comment indicating that the rule is not intended to<br />
address all circumstances under which the client may be entitled to a refund. After all, this is a<br />
matter <strong>of</strong> contract law and there are other circumstances where the client might be entitled to a<br />
refund, such as where the lawyer performs the services negligently-- i.e., a failure <strong>of</strong><br />
consideration. We are not overruling traditional contract defenses. Either way, I don't think it will<br />
appease Tarlow and others who insist there be no rule that prohibits non-refundable fees.<br />
May 25, 2010 Sondheim e-mail to Martinez, cc RRC:<br />
Then how about this:<br />
"(iii) that, the fee is earned in full upon receipt and, unless the lawyer withdraws before the<br />
completion <strong>of</strong> the services or otherwise fails to perform services contemplated under this<br />
Agreement, no portion <strong>of</strong> it will be refunded."<br />
While this is a variation <strong>of</strong> the Sample Fee agreement, I believe it is defensible as based upon<br />
the "gold standard" supported <strong>by</strong> Tarlow and others.<br />
RRC - 4-200 [1-5] - E-mails, etc. - REV (06-01-10).doc -142-<br />
Printed: May 26, 2010<br />
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