California Bar Journal
OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA - NOVEMBER 1999
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MCLE SELF-STUDY

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Self-Assessment Test
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Answer the following questions after reading the MCLE article on fee agreements. Use the answer form provided to send the test, along with a $20 processing fee, to the State Bar. Please allow at least eight weeks for MCLE certificates to reach you in the mail.

1. How a legal fee is characterized does not make that much of a difference regarding how legal fees are earned or how fee payments are taken.

2. Attorneys employ a wide variety of terms in naming their fees and fee arrangements.

3. California Rule of Professional Conduct 4-110 (Advance Payment of Legal Fees) was adopted in 1997.

4. There are seven basic types of generic fee arrangements: hourly, flat/fixed, contingency, security, classic retainer, advance retainer, and true retainer.

5. A fixed or flat fee arrangement is one in which the lawyer agrees to provide a specific service at a predetermined hourly rate.

6. A contingency fee arrangement typically provides that if the client is successful in the matter being litigated or negotiated, the lawyer will receive a defined percentage of the recovery.

7. A contingency fee arrangement may include a security payment to guarantee the future payment of the contingency fee - this security payment is a type of advance fee.

8. A true retainer fee arrangement provides for a fee paid to the lawyer solely for the purpose of ensuring that availability of the lawyer for the client's matter - the true retainer fee is not tied to the performance of any specific legal service.

9. A "true retainer fee" is more appropriately called a "classic retainer fee."

10. A true retainer fee payment is considered earned upon receipt.

11. An attorney may ethically combine different types of generic fee arrangements within a single fee contract.

12. Advance fee payments are commonly taken in hourly, flat/fixed, and true retainer fee arrangements.

13. A "non-refundable fee" arrangement means that the attorney is working on an hourly basis for the client.

14. When an attorney's contract calls for a "retainer," the attorney means a "true retainer fee" that is earned upon receipt.

15. An attorney has a duty, upon termination of employment, to promptly refund any part of a fee paid in advance that has not been earned.

16. The duty, upon termination of employment, to promptly refund any part of a fee paid in advance that has not been earned does not apply to a "true retainer fee" which is paid solely for the purpose of ensuring the attorney's availability.

17. Attorneys can be required to refund contractually "non-refundable" fees in situations where fees have been advanced by the client, but not earned by the attorney.

18. An attorney can be required to refund a non-refundable "minimum" fee to the client.

19. In a contingency fee arrangement, the lawyer will bill the client for services during the course of representation.

20. Many attorneys find the entire subject of legal fees to be unnecessarily complicated and complex.

CERTIFICATION

This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour, of which 1 hour will apply to legal ethics.

The State Bar of California certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.