MPRE Fees and Expenses 5 — Questions and Answers
Question 1: An attorney's fee agreement states that the attorney's hourly rate may increase during the representation without additional client consent. Under the Model Rules, such a provision is:
- Always enforceable because the client signed the fee agreement.
- Permissible only if the rate increases are tied to an objective index.
- Permissible if adequately disclosed in the original written agreement and any increase still results in a reasonable fee. (Correct answer)
- Always impermissible because fee changes require a new written agreement signed by the client.
Correct answer: Permissible if adequately disclosed in the original written agreement and any increase still results in a reasonable fee.
Lawyers may agree in advance to rate escalation provisions, but any resulting fee must still be reasonable and the arrangement must have been adequately communicated to the client.
Question 2: A lawyer settles a case and receives the settlement funds. The opposing party issues a check jointly payable to the lawyer and client. Under the Model Rules, the lawyer must:
- Deposit the check in the operating account and remit the client's share immediately.
- Deposit the check in the client trust account, notify the client promptly, and disburse the client's share after the client endorses the check. (Correct answer)
- Endorse the check unilaterally and deposit the attorney's fee in the operating account and the rest in trust.
- Hold the entire check until the court approves the fee.
Correct answer: Deposit the check in the client trust account, notify the client promptly, and disburse the client's share after the client endorses the check.
Rule 1.15 requires funds in which a client has an interest to be placed in trust, with the client promptly notified and the client's share disbursed after proper authorization.
Question 3: A lawyer is both the personal representative of an estate and the legal counsel for the estate. She charges a fee for both roles. Under the Model Rules:
- Dual compensation is always prohibited because it creates an inherent conflict.
- Dual compensation is permissible if the total fees are reasonable and the arrangement is disclosed and consented to. (Correct answer)
- Dual compensation requires court approval in all cases.
- Dual compensation is permissible only if no other attorney is available.
Correct answer: Dual compensation is permissible if the total fees are reasonable and the arrangement is disclosed and consented to.
Serving in dual roles is not automatically prohibited, but the lawyer must disclose the arrangement, obtain informed consent, and ensure the total fee is reasonable.
Question 4: A lawyer discovers midway through representation that the agreed hourly fee will result in a total bill far exceeding what the client anticipated. Under the Model Rules, the lawyer should:
- Continue billing at the agreed rate without disclosure because the client agreed to it.
- Communicate the anticipated total fee to the client so the client can make an informed decision about continuing. (Correct answer)
- Reduce fees unilaterally to avoid client complaints.
- File a fee dispute notice with the bar before billing the client.
Correct answer: Communicate the anticipated total fee to the client so the client can make an informed decision about continuing.
The duty of communication under Rule 1.4 requires lawyers to keep clients reasonably informed, including about fee developments that could materially affect the representation.
Question 5: A lawyer agrees to represent a client and does not communicate the basis of the fee to the client in writing until two months into the representation. Under the Model Rules:
- This is always a violation because fee disclosures must precede representation.
- This may violate Rule 1.5(b), which requires communicating fee terms to new clients preferably in writing before or within a reasonable time after commencing representation. (Correct answer)
- This is permissible if the client pays promptly.
- This is only a violation if the representation lasts more than six months.
Correct answer: This may violate Rule 1.5(b), which requires communicating fee terms to new clients preferably in writing before or within a reasonable time after commencing representation.
Rule 1.5(b) requires fee communication before or within a reasonable time after commencing representation; two months is likely unreasonable in most circumstances.
Question 6: A client owes a lawyer unpaid fees and the client's case has concluded. The lawyer threatens to report the client to immigration authorities unless the client pays. Under the Model Rules, this conduct is:
- Permissible because the lawyer has a right to collect fees owed.
- Permissible if the lawyer has a good-faith belief the client is undocumented.
- Improper as it constitutes improper use of a threat to gain advantage in a civil dispute. (Correct answer)
- Permissible only if the amount owed exceeds $10,000.
Correct answer: Improper as it constitutes improper use of a threat to gain advantage in a civil dispute.
Using threats of criminal or regulatory reporting to coerce payment of civil fee disputes is improper and constitutes conduct prejudicial to the administration of justice.
Question 7: A lawyer who represented a client in a personal injury case on a contingency basis receives $90,000 in settlement funds. The agreed contingency is 33%. The client disputes the fee, claiming the agreement said 25%. Under the Model Rules, the lawyer must:
- Retain all $90,000 until the dispute is resolved.
- Pay the client the full $90,000 and pursue the fee separately.
- Retain the disputed portion in trust and promptly pay the client the undisputed amount. (Correct answer)
- Seek immediate court approval for disbursement.
Correct answer: Retain the disputed portion in trust and promptly pay the client the undisputed amount.
Rule 1.15(e) requires that when a fee dispute exists, the undisputed portion must be paid to the client and the disputed amount held in trust until resolution.
MPRE Fees and Expenses 5
An attorney's fee agreement states that the attorney's hourly rate may increase during the representation without additional client consent.
Under the Model Rules, such a provision is: