Sorted by Commenter - Ethics - State of California

No. Commenter Position 1
Comment
on Behalf
of Group?
Rule 1.5 Fees for Legal Services.
[Sorted by Commenter]
Rule
Paragraph
Comment RRC Response
the tax treatment would be otherwise. The
language of Proposed Rule 1.5(e)(2)(v)
provides that the written fee agreement shall
include a provision that the client may be
entitled to a refund of a portion of the fee if
the agreed upon legal services have not been
performed. This language appears to
introduce a substantial condition into the
equation of the lawyer’s dominion and control
of the fee.
I believe that there are sufficient remedies
against abuses, such as the non-performance
or incompetent performance of legal services,
without the broad brush approach embodied
in the Proposed Rule that not only alters
property rights, but puts the interests of both
the lawyer and client at risk in certain fact
situations.
The core issue under the Proposed Rule is
one of property or interest in property. It
appears that the Proposed Rule is confusing
and inherently contradictory. If the flat fee is
the lawyer’s property upon receipt, then there
should not be a basis for seizure. However, if
the client has a right to a refund of fees
attributable to services not completed, then
the client has a property interest that can be
seized by a taxing agency.
The written fee agreement shall, in a
manner that can easily be understood by
the client, include the following: (i) the scope
of the services to be provided; (ii) the total
amount of the fee and the terms of
payment; (iii) that the fee is the lawyer’s
property immediately on receipt; (iv) that the
fee agreement does not alter the client’s
right to terminate the client-lawyer
relationship; and (v) that the client may be
entitled to a refund of a portion of the fee if
the agreed-upon legal services have not
been completed.
The Commission did not make the requested
revision, in part, because the Commission believes
that charging a non-refundable fee is inimical to
California’s strong policy of client protection. (See
also proposed Rule 1.5 Model Rule Comparison
Chart explanation of paragraph (e) of the rule.)
RRC - 4-200 1-5 - Public Comment Chart - By Commenter - XDFT1.1 (5-26-10) doc.doc Page 9 of 28 Printed: 5/26/2010
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