MPRE Fees and Expenses 2 — Questions and Answers
Question 1: An attorney agrees to represent a client on a contingency fee basis without putting the agreement in writing. Which statement best describes this arrangement under the Model Rules?
- The arrangement is per se unethical and the attorney must withdraw.
- The arrangement violates the Model Rules, which require contingency fee agreements to be in a signed writing. (Correct answer)
- The arrangement is permissible as long as the fee is reasonable.
- The arrangement is only improper if the client later disputes the fee.
Correct answer: The arrangement violates the Model Rules, which require contingency fee agreements to be in a signed writing.
Model Rule 1.5(c) requires contingency fee agreements to be in a writing signed by the client.
Question 2: A lawyer represents a client in a divorce matter. The client asks the lawyer to handle the case on a contingency fee basis, agreeing to pay 30% of any property settlement obtained. Under the Model Rules, this arrangement is:
- Permissible if the fee is reasonable and the agreement is in writing.
- Permissible only if the client gives informed consent in writing.
- Prohibited because contingency fees are not allowed in domestic relations matters. (Correct answer)
- Prohibited unless the state bar approves the arrangement.
Correct answer: Prohibited because contingency fees are not allowed in domestic relations matters.
Model Rule 1.5(d)(1) expressly prohibits contingency fees in domestic relations cases.
Question 3: A lawyer charges a client a fee that is higher than what the lawyer charges other clients for the same work, because this client is perceived to be wealthy. Under the Model Rules, this fee is:
- Permissible because lawyers may set their own fees based on client circumstances.
- Permissible only if disclosed to the client in advance.
- Improper if the resulting fee is unreasonable under the Rule 1.5 factors. (Correct answer)
- Automatically improper under the prohibition on discriminatory billing.
Correct answer: Improper if the resulting fee is unreasonable under the Rule 1.5 factors.
While lawyers may consider the client's ability to pay, the fee must still be reasonable under the factors listed in Rule 1.5(a).
Question 4: An attorney receives a $10,000 advance fee from a client to be applied against future hourly charges. Under the Model Rules, how must the lawyer handle these funds?
- Deposit them in the lawyer's operating account and transfer earned portions to the trust account.
- Deposit them in the client trust account and withdraw funds only as fees are earned. (Correct answer)
- Hold them in a joint account accessible to both the lawyer and client.
- Deposit them in the operating account because fees belong to the lawyer upon receipt.
Correct answer: Deposit them in the client trust account and withdraw funds only as fees are earned.
Unearned advance fees must be held in a client trust account and withdrawn only as the lawyer earns them.
Question 5: A client terminates representation midway through a matter and demands a refund of the unused portion of a flat fee paid upfront. The lawyer argues the flat fee was earned upon receipt. Under the Model Rules, which is most accurate?
- Flat fees are always earned upon receipt, so no refund is required.
- Flat fees must always be refunded pro-rata upon early termination.
- Whether a refund is owed depends on whether the fee agreement clearly designated the fee as earned upon receipt and the client consented with informed consent to that arrangement. (Correct answer)
- Flat fees become property of the lawyer only after the matter concludes.
Correct answer: Whether a refund is owed depends on whether the fee agreement clearly designated the fee as earned upon receipt and the client consented with informed consent to that arrangement.
Some jurisdictions permit 'earned upon receipt' flat fees if properly disclosed and consented to, but the lawyer must still return any unearned portion if the arrangement does not clearly satisfy those requirements.
Question 6: A lawyer representing a criminal defendant agrees to accept a reduced fee in exchange for the client naming the lawyer as a beneficiary in the client's will. Under the Model Rules, this arrangement is:
- Permissible because the client voluntarily agreed.
- Permissible if disclosed to the court.
- Improper because it constitutes a prohibited business transaction with a client involving a gift. (Correct answer)
- Permissible only if the client has independent counsel review the will.
Correct answer: Improper because it constitutes a prohibited business transaction with a client involving a gift.
A lawyer must not solicit a substantial gift from a client, and preparing an instrument for a client that gives the lawyer a bequest is prohibited unless the client is a relative.
Question 7: Two lawyers in different firms agree to divide a fee for jointly handling a client matter. Under the Model Rules, fee splitting between lawyers in different firms requires:
- That the division be in proportion to the services performed, or each lawyer assume joint responsibility, the client consent in a writing, and the total fee be reasonable. (Correct answer)
- Only that the total fee be reasonable and disclosed to the client.
- Only that the client give oral consent before representation begins.
- Court approval whenever the total fee exceeds $5,000.
Correct answer: That the division be in proportion to the services performed, or each lawyer assume joint responsibility, the client consent in a writing, and the total fee be reasonable.
Rule 1.5(e) requires that the division be proportionate to services or each lawyer assume joint responsibility, the client consent in a signed writing, and the total fee be reasonable.
MPRE Fees and Expenses 2
An attorney agrees to represent a client on a contingency fee basis without putting the agreement in writing.
Which statement best describes this arrangement under the Model Rules?