| 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. |
