FEES

1996 SUPPLEMENT

Fees-56

INFORMAL OPINION 940110

QUESTION: May Attorney charge a contingency fee onproceeds awarded in a verdict as well as the interest which hasaccrued on the proceeds while they have been held in the courtregistry while post trial motions were pending?

ANSWER: Yes, if this is clearly a provision of the writtencontract which is required by Rule 4-1.5(c). Attorney should becareful to calculate the interest on the proper amount dependingon whether the contract called for Attorney's fee to be calculatedon the gross or net recovery.

[Rule 4 -- 1.5(c)]

Fees-57

INFORMAL OPINION 940111

QUESTION: Attorney represented a client on a contingencyfee case. The client discharged Attorney. Attorney asserted a lienbut made an offer to the client's new attorney that Attorney wouldaccept a lesser amount which was equal to the amount of amedical payment check that had already been received. HasAttorney violated the rules?

ANSWER: Not based upon the information available. Thisoffice cannot make a factual determination regarding the reasonableness of the fee asserted in the context of an informal opinion.

[Rule 4 -- 1.5]

Fees-58

INFORMAL OPINION 940154

QUESTION: Attorney was hired to represent a client who wasin an auto accident in a distant state. Attorney associated with anattorney in that state. The total attorney fee will be one third. Asubstantial judgment was obtained. Attorney remained involved inthe case but it was tried by the attorney in the other state. Theproposed division of fees among the attorneys is 10% to Attorneyand 90% to the attorney from the other state. The client hasconsented to this division.

ANSWER: Based upon these facts, this arrangement wouldnot violate Rule 4-1.5(e).

[Rule 4 -- 1.5(e)]

Fees-59

INFORMAL OPINION 940162

QUESTION: Attorney's former partner is now a judge. Contingency fee cases of the partnership are still outstanding. MayAttorney enter into an agreement to pay the former partner aportion of the fees received from these cases? Attorney performedall of the work on the contingency fee cases during the partnership.

ANSWER: Attorney may share fees from these cases with theformer partner to the extent the fees were earned during thepartnership. The fees should be apportioned according to the termsof the partnership agreement. The former partner may also want tocontact the Judicial Commission for an opinion.

[Rule 4 -- 1.5(e)]

Fees-60

INFORMAL OPINION 940163

QUESTION: May Attorney accept credit cards for paymentof fees?

ANSWER: As a general rule, the answer is yes. However, thisopinion does not imply blanket approval for any specific system anattorney may implement. Formal Opinion 112 which was issued in1974 and indicated that this conduct was prohibited, because itwould result in fee splitting, was withdrawn in 1982.

[Rule 4 -- 1.5; 5.4]

Fees-61

INFORMAL OPINION 940181

QUESTION: Attorney proposes to establish a fee schedulebased on the medical model. The fee would be a set amount foreach type of service with different rates for each service dependingon whether the service was "brief," "intermediate," or "extended."

ANSWER: Rule 4-1.5 does not prohibit such a fee schedule aslong as the fees themselves are reasonable. Rule 1.4(b) requires thatthe meaning of the terms "brief," etc. be adequately communicatedto the clients.

[Rule 4 -- 1.5; 1.4(b)]

Fees-62

INFORMAL OPINION 940184

QUESTION: Attorney proposes to pay the treating physicianout of the settlement. This physician would have been an expertwitness if the case had gone to trial. The physician accepted thepatient on Attorney's recommendation. A judgment has beenentered in small claims court against the client/patient and thelawyer's trust account is about to be garnished. The client has notconsented to payment to the physician.

ANSWER: Under Rules 4-1.5(d) and 4-1.15(a)-(c), Attorney mayonly pay the treating physician out of settlement funds if the clientconsents. If the client does not consent and the physician continuesto assert a claim, Attorney must interplead the funds. Attorney mustnot allow funds to be removed from the trust account without theconsent of the client unless it is pursuant to a court order in a matterin which the client's interests were represented or in which the clientchose not to be represented.

[Rule 4 -- 1.5(d); 1.15]

Fees-63

INFORMAL OPINION 950034

QUESTION: Attorney and client propose to agree to language in the contingent fee contract which states: "Client shall notwithhold Client's consent to a reasonable offer of compromise orsettle Client's claims unreasonably." Is this permissible under the Rulesof Professional Conduct?

ANSWER: Yes. Such a provision in the contract would notauthorize the attorney to unilaterally determine that a settlementwas reasonable and to settle the case without the client's expressauthority.

[Rule 4 -- 1.5(c); 1.2]

Fees-64

INFORMAL OPINION 950134

QUESTION: Question 1. Attorney's firm represents X in apersonal injury case and a fixed fee case. May the firm enter into anagreement with X to withhold a fixed sum from the personal injurycase to pay for the fixed fee case if it is understood that the fees areowed on the fixed fee case regardless of the outcome of thepersonal injury case?

Question 2. What if X just gives a note on the fixed fee caseand the firm agrees that X may wait until the completion of thepersonal injury case to pay?

Question 3. If another firm is representing the client on thefixed fee case, may Attorney's firm enter into an agreement with theclient to pay the other firm's fees from the proceeds of the personalinjury case?

ANSWER: The answer to all questions is "Yes," if the clientagrees.

[Rule 4 -- 1.5]

Fees-65

INFORMAL OPINION 950230

QUESTION: Attorney has represented the client in negotiatinga structured settlement. Attorney would like to have the attorneyfee, which is based on a contingency fee contract, paid up front.Attorney would apply the contingent fee percentage to the presentvalue of the settlement. Would this violate the rules?

ANSWER: Attorney may take attorney's contingency fee upfront if it is based on the present value of the structured settlementand Attorney has the consent of the client in the original contractor otherwise.

[Rule 4 -- 1.5]

Fees-66

INFORMAL OPINION 950243

QUESTION: Attorney practices in the area of Social SecurityDisability and Supplemental Security Income. In cases in whichbenefits are obtained for a client who is unable to manage theclient's own benefits for reasons such as mental illness, a representative payee is appointed. The Social Security Administration has givenpermission for attorneys to act as representative payees andreceive the standard fifty dollar fee. May Attorney serve in thiscapacity and accept this fee? ANSWER: Accepting the fee forserving as the representative payee, under the circumstancesAttorney has described, would not violate any provision of the Rulesof Professional Conduct.

[Rule 4 -- 1.5]

Fees-67

INFORMAL OPINION 950259

QUESTION: Attorney is guardian ad litem for a minor. Theminor was involved in an accident and Attorney obtained leave ofcourt to pursue the claim but no attorney fee was mentioned.Attorney has now obtained recovery for the minor and has askedthe court to award a percentage as attorney's fee. May Attorneycharge this fee if the court authorizes it?

ANSWER: In light of the fact that Attorney will be applying tothe court for Attorney's fee award, Attorney will not violate Rule4-1.5(c) if the court approves it as a reasonable fee. In requestingthat amount, Attorney must disclose to the court that Attorney doesnot have a written contingent fee agreement. Attorney shouldremember that Rule 4-1.5(c) requires contingent fee agreements tobe in writing. A contingent fee agreement should be executed earlyenough in the representation that the client still has options and isnot put in the position of negotiating with an attorney who has beenrepresenting the client for some time. In future situations of this kind,Attorney should seek approval of this type of fee arrangement fromthe court at the outset.

[Rule 4 -- 1.5]