Fees and Expenses Flashcards
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Read the first 7 Fees and Expenses flashcards as text
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?
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.
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:
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.
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:
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).
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?
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Unearned advance fees must be held in a client trust account and withdrawn only as the lawyer earns them.
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?
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.
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:
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.
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:
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.