Fees-56

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

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

[Rule 4 -- 1.5(c)]

Fees-57

QUESTION: Attorney represented a client on a contingency fee case. The client discharged Attorney. Attorney asserted a lien but made an offer to the client's new attorney that Attorney would accept a lesser amount which was equal to the amount of a medical payment check that had already been received. Has Attorney violated the rules?

ANSWER: Not based upon the information available. This office 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

QUESTION: Attorney was hired to represent a client who was in an auto accident in a distant state. Attorney associated with an attorney in that state. The total attorney fee will be one third. A substantial judgment was obtained. Attorney remained involved in the case but it was tried by the attorney in the other state. The proposed division of fees among the attorneys is 10% to Attorney and 90% to the attorney from the other state. The client has consented to this division.

ANSWER: Based upon these facts, this arrangement would not violate Rule 4-1.5(e).

[Rule 4 -- 1.5(e)]

Fees-59

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

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

[Rule 4 -- 1.5(e)]

Fees-60

QUESTION: May Attorney accept credit cards for payment of fees?

ANSWER: As a general rule, the answer is yes. However, this opinion does not imply blanket approval for any specific system an attorney may implement. Formal Opinion 112 which was issued in 1974 and indicated that this conduct was prohibited, because it would result in fee splitting, was withdrawn in 1982.

[Rule 4 -- 1.5; 5.4]

Fees-61

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

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

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

Fees-62

QUESTION: Attorney proposes to pay the treating physician out of the settlement. This physician would have been an expert witness if the case had gone to trial. The physician accepted the patient on Attorney's recommendation. A judgment has been entered in small claims court against the client/patient and the lawyer's trust account is about to be garnished. The client has not consented to payment to the physician.

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

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

Fees-63

QUESTION: Attorney and client propose to agree to language in the contingent fee contract which states: "Client shall not withhold Client's consent to a reasonable offer of compromise or settle Client's claims unreasonably." Is this permissible under the Rules of Professional Conduct?

ANSWER: Yes. Such a provision in the contract would not authorize the attorney to unilaterally determine that a settlement was reasonable and to settle the case without the client's express authority.

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

Fees-64

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

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

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

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

[Rule 4 -- 1.5]

Fees-65

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

ANSWER: Attorney may take attorney's contingency fee up front if it is based on the present value of the structured settlement and Attorney has the consent of the client in the original contract or otherwise.

[Rule 4 -- 1.5]

Fees-66

QUESTION: Attorney practices in the area of Social Security Disability and Supplemental Security Income. In cases in which benefits are obtained for a client who is unable to manage the client's own benefits for reasons such as mental illness, a representative payee is appointed. The Social Security Administration has given permission for attorneys to act as representative payees and receive the standard fifty dollar fee. May Attorney serve in this capacity and accept this fee? ANSWER: Accepting the fee for serving as the representative payee, under the circumstances Attorney has described, would not violate any provision of the Rules of Professional Conduct.

[Rule 4 -- 1.5]

Fees-67

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

ANSWER: In light of the fact that Attorney will be applying to the court for Attorney's fee award, Attorney will not violate Rule 4-1.5(c) if the court approves it as a reasonable fee. In requesting that amount, Attorney must disclose to the court that Attorney does not have a written contingent fee agreement. Attorney should remember that Rule 4-1.5(c) requires contingent fee agreements to be in writing. A contingent fee agreement should be executed early enough in the representation that the client still has options and is not put in the position of negotiating with an attorney who has been representing the client for some time. In future situations of this kind, Attorney should seek approval of this type of fee arrangement from the court at the outset.

[Rule 4 -- 1.5]