Bar Counsel: Retainer Agreements and Rule 1.5(b)
From Washington Lawyer, December 2008
By Dolores Dorsainvil and Daniel Mills
Before an attorney undertakes a representation in any given legal matter, it is important that the attorney and the prospective client have a “meeting of the minds” with regard to the representation. An executed retainer agreement is a fundamental aspect of the attorney–client relationship. Not only does it provide the contractual terms of the agreement between two parties, but it also sets forth how the attorney will be compensated for the legal services he or she will provide at the outset of the representation. Unfortunately, there are instances where either no retainer agreement exists or the parties have conflicting versions of the agreed upon terms of the representation. In which case, the Office of Bar Counsel must investigate the matter and closely examine any potential ambiguities in the retainer agreement to ascertain whether there has been any violation of the ethical rules.
Rule 1.5(b) of the D.C. Rules of Professional Conduct, which applies to retainer agreements, states: “[w]hen the lawyer has not regularly represented the client, the basis or rate of the fee, the scope of the lawyer’s representation, and the expenses for which the client will be responsible shall be communicated to the client, in writing, before or within a reasonable time after commencing the representation.”
To ensure that a retainer agreement conforms to the requirements set forth in Rule 1.5(b), an attorney may be well-advised to examine the agreement, especially if it has not been updated for some time. There are a few fundamental provisions that must be included in the terms and conditions of the agreement. First, in a new attorney–client relationship, the retainer agreement must clearly state “the basis or rate of the fee” or, simply put, how an attorney will be compensated. Whether the fee is contingent upon the outcome of the legal representation, a flat one-time fee, or an advanced fee that will be earned based on an hourly rate, it is imperative that the client understand the method by which an attorney will be compensated. Remember, it is the attorney’s obligation to make certain that there is no misunderstanding regarding his or her fees.
Next, the retainer agreement should clearly state “the scope of the lawyer’s representation,” which means the attorney should plainly state the legal services he or she has agreed to perform. This requirement to delineate the scope of the representation acts as a safeguard not only for the client, but the lawyer as well. In the event a disagreement arises regarding the initial nature of the representation, it will be essential for the parties to refer to the retainer agreement and look to the plain language of the document to clear up any conflicting views regarding the scope. There are situations whereby an attorney agrees to undertake a representation in what is initially perceived as a relatively simple matter that could potentially become more complicated and, in which case, additional related legal services are needed. In such instances, it would be easy for the attorney to modify the retainer agreement or draft a new agreement with the understanding he or she will perform additional services at an additional cost.
As a practical matter, an attorney should not only set forth the legal services that he or she will provide but, in some instances, spell out the services that are not included as part of the retainer agreement. For example, if an attorney is retained in an immigration matter to file application documents and represent a client at a hearing before the immigration court, the attorney should state in the retainer agreement that the representation does not include any appellate work, should the matter present such a necessity. Such specificity in the retainer agreement will help eliminate any confusion in the event the client is denied the requested relief.
Lastly, Rule 1.5(b) requires that the attorney inform the client of any expenses related to the representation for which the client will be responsible. This eliminates any undue surprise on the part of the client once his or her matter is resolved.
The consequence of a violation of Rule 1.5(b) can range anywhere from a diversion to an informal admonition. In one of the more recent cases dealing with this issue, the respondent in In re Padgett was issued an informal admonition by the Office of Bar Counsel for his failure to have a written retainer agreement or other writing stating the rate or basis of his fee in an employment matter. Similarly, the respondent in In re Jones faced the same disposition for the same failure in a criminal matter. Although the respondent had discussed his fee with the client on several occasions, and even amended the agreement, he failed to do so in writing.
Therefore, the essential elements to an ironclad engagement agreement between a lawyer and client include the following:
I. First, have a conversation with the potential client about fees, how you work, your ground rules, the client’s expectations, what to expect of one another, and how you will communicate. Do not rush this exchange. Allow for a free flow of information. Arrive at an understanding and say it out loud. Then, assuming you have an understanding and intend to proceed toward a lawyer–client relationship, prepare a written engagement letter that does the following:
Define in detail the scope of the work. Explain what you are going to do and, if appropriate, include what you are not going to do. For example, if you are going to undertake the defense of someone charged with a crime, but you are not going to sue the police over the search and arrest, state so in the agreement.
State the fee to be charged. Explain in detail the rate or basis of the fee and provide examples, where appropriate.
Describe the expenses the client is to pay. In a contingency fee case, detail client expenses and state whether the client must pay the expenses regardless of the outcome of the case.
Please note: You should limit the period within which the client is to sign and return the agreement. When time is of the essence, insist that to proceed with the attorney–client relationship, a signed copy of the agreement must be returned by a specific date. Mark the deadline on your calendar. If the individual continues to be nonresponsive, confirm in writing that no agreement has been reached.
II. If the case involves a contingency fee, a written agreement is required. Of course, the best practice is to use a written fee agreement—in every case—signed by you and the client to address in clear, simple language additional issues such as the following:
Fee arbitration. In the District of Columbia, you may include a provision in the agreement stating that any fee dispute shall be submitted to the D.C. Bar Attorney/Client Arbitration Board (ACAB), provided the written agreement informs the client that counseling and a copy of ACAB’s rules are available, and the client consents in writing to the mandatory arbitration. When the client requests arbitration of a fee dispute, you must arbitrate. If you request arbitration, the client may elect to participate.
Detail what is expected of the client. Explain what cooperation is needed and expected. Explain how you will communicate and what the client can expect regarding e-mail, letters, meetings, and telephone calls.
Terminating the relationship. Address your right to withdraw and the client’s right to terminate the relationship.
Trust accounts. It is best to explain that unearned fees and unincurred costs will be placed in your trust account and withdrawn as earned and incurred.
Charging your time. If you are billing on an hourly basis, explain how your time on all aspects of the case will be billed by giving specific examples of the duties required in representing a client such as preparing for a hearing, researching and investigating, drafting a motion, taking a deposition, and examining records. Explaining in detail in the bill itself what you are doing and the result you are obtaining can help the client better understand the process. If you intend to charge a minimum billing increment for telephone calls and letters, it must be stated in the agreement.
Inside, outside costs. Detail how you will cover both inside and outside costs. Examples of inside costs include copying, long distance telephone and fax use, and postage. Outside costs can include those relating to court reporters, filings, messengers, and processing. If you intend to pay all costs up front and pass them on to your client in the bill, explain this in detail. If you elect to have the client pay all outside costs directly, this also must be set out in the agreement.
Lines of credit. If you use a line of credit to pay the costs and disbursements related to prosecuting a case, you may pass on the cost to the client, provided the client has been informed in advance and agrees, the expense is reasonable, and you have maintained a separate accounting. The costs must be directly attributable to the client, not simply overhead expense.
Billing cycle. It is advisable to explain your billing practices and state when the client can expect to receive the bill, who to contact with questions, and when payment is due.
Sign and date. The agreement should have space for both the lawyer and client to sign and date, and each should receive a signed original.
 There are several types of retainer agreements, including contingency, flat fee, advanced fee, or general retainer. It is important to note the differences between the agreements and decipher which agreement(s) is (are) most practical given the legal services you provide.
 The amended D.C. Rules of Professional Conduct, enacted on February 1, 2007, include the requirement that an attorney shall state “the scope of the lawyer’s representation.”
 Comment 4 of Rule 1.5 discusses an attorney’s concomitant obligation under Rule 1.16(d) in that an attorney must return any unearned portion of an advanced payment or fee. Under the rules, advanced fees are those that belong to the client until such time that the attorney earns them, unless the client gives informed consent to a different arrangement.
 D.C. Bar Rule XI, § 8.1.
 D.C. Bar Rule XI, § 8.
 In re Squire Padgett, Bar Docket No. 2007-D263.
 The Office of Bar Counsel noted that the Respondent failed to have a retainer agreement or writing setting forth the rate or basis of his fee on two prior occasions.
 In re Antoini M. Jones, Bar Docket No. 230-01.
 If the representation involves litigation, be clear on whether that includes an appeal. If you are excluding an appeal from the scope of the representation, make it clear that negotiating a new agreement will be necessary for an appeal.
 If it is a flat fee case, state precisely what will be done for the flat fee, and whether the start of work is contingent upon payment. If it is an advanced fee, explain how you will be charging against the fee and what happens or is expected of the client when the advanced fee is exhausted. Explain that any unearned fee will be returned.
 When you have not regularly represented the client, elements in A, B, and C are required in a written engagement letter as stated in Rule 1.5(b).
 Rule 1.5(c). If it is a contingent fee, explain how the fee will be calculated in the event of a settlement or collected verdict. Is the fee calculated against the gross settlement or verdict, or are expenses paid or reimbursed before the fee is determined?
 D.C. Bar Legal Ethics Opinion 218 (1991) (Retainer Agreement Providing for Mandatory Arbitration of Fee Disputes Is Not Unethical), which should be read before drafting an arbitration provision. www.dcbar.org/ for_lawyers/ethics/legal_ethics/opinions/opinion218.cfm.
 D.C. Bar Rule XIII(a).
 D.C. Bar Legal Ethics Opinion 103 (1981) (Retainer Agreements, Authority to Make Litigation Decisions, Withdrawal From Representation, Attorney’s Lien, Finance Charges, Assignment of Recovery, Excessive Fees).
 D.C. Bar Legal Ethics Opinion 345 (2008) (Reimbursement of Interest Charges Incurred When a Lawyer Uses The Firm’s Line of Credit to Advance the Costs of the Representation). www.dcbar.org/for_lawyers/ ethics/legal_ethics/opinions/opinion345.cfm.
Dolores Dorsainvil is a staff attorney with the Intake Division of the Office of Bar Counsel. Daniel M. Mills is manager of the D.C. Bar Practice Management Advisory Service.
Disciplinary Actions Taken by the Board on Professional Responsibility
In re Leslie Wayne Lickstein. Bar No. 272062. September 24, 2008. The Board on Professional Responsibility recommends that the D.C. Court of Appeals disbar Lickstein. Lickstein was convicted of bank fraud, in violation of 18 U.S.C. §§ 371 and 1344, in the United States District Court for the Eastern District of Virginia, a crime involving moral turpitude per se for which disbarment is mandatory in accordance with D.C. Code § 11-2503(a).
In re Robert E. Mittendorff. Bar No. 43919. September 16, 2008. The Board on Professional Responsibility recommends that the D.C. Court of Appeals disbar Mittendorff by consent.
In re Charles M. Rust-Tierney. Bar No. 370925. August 8, 2008. The Board on Professional Responsibility recommends that the D.C. Court of Appeals disbar Rust-Tierney by consent.
In re Michael J. Wing. Bar No. 477728. September 16, 2008. The Board on Professional Responsibility recommends that the D.C. Court of Appeals disbar Wing by consent.
In re Robert Joel Zakroff. Bar No. 163337. August 11, 2008. The Board on Professional Responsibility recommends that the D.C. Court of Appeals disbar Zakroff by consent.
In re Ana L. Avendano. Bar No. 464900. September 23, 2008. In a reciprocal matter from Maryland, the Board on Professional Responsibility recommends that the D.C. Court of Appeals suspend Avendano for 90 days as identical reciprocal discipline. The Court of Appeals of Maryland suspended Avendano for 90 days by consent based on a joint petition wherein Avendano agreed that if a hearing were held, sufficient evidence could be produced to sustain the allegation of misconduct violating Maryland Rules of Professional Conduct pertaining to diligence, communication, safekeeping property, declining or terminating representation, responsibilities regarding nonlawyer assistants, and Bar admission and disciplinary matters. In addition, Avendano made restitution in the amount of $1,330 as a refund of the legal fees and Immigration and Naturalization Service filing fee paid by the client.
In re Robert L. Kline III. Bar No. 465770. August 7, 2008. In a reciprocal matter from Maryland, the D.C. Court of Appeals imposed identical reciprocal discipline and disbarred Kline. The Court of Appeals of Maryland disbarred Kline by consent, finding that he violated multiple Maryland Rules of Professional Conduct. Kline’s misconduct occurred throughout his representation of a life insurance company in a collection matter. Kline allowed one of his employees to be sworn in as if she were an employee of the insurance company and testify falsely under oath. In addition, Kline represented the insurance company in another matter, and he, or someone within his control, forged the signature of the insurance company’s representative on affidavits without consent.
Disciplinary Actions Taken by the District of Columbia Court Of Appeals
In re Herbert A. Callihan. Bar No. 1792. August 7, 2008. The D.C. Court of Appeals disbarred Callihan by consent, effective forthwith.
In re Charles M. Rust-Tierney. Bar No. 370925. September 4, 2008. The D.C. Court of Appeals disbarred Rust-Tierney by consent, effective forthwith.
In re Robert Joel Zakroff. Bar No. 163337. September 11, 2008. The D.C. Court of Appeals disbarred Zakroff by consent, effective forthwith.
In re Caroline P. Ayres-Fountain. Bar No. 428324. August 7, 2008. In a reciprocal matter from Delaware, the D.C. Court of Appeals imposed identical reciprocal discipline and suspended Ayres-Fountain for 36 months with fitness, commencing on April 14, 2006. The Supreme Court of Delaware suspended Ayres-Fountain for violating numerous Rules of Professional Conduct by: 1) concealing her failure to pay various federal, state, and local taxes; 2) falsely reporting to the Delaware court that she had paid all applicable taxes; 3) with respect to one client, failing to provide competent representation, failing to act with reasonable diligence and promptness, failing to keep the client informed, failing to hold unearned fees in a trust account, failing to keep the client’s property separate from her own, failing to take steps to protect the client’s interest, and engaging in deceit and misrepresentation; 4) with respect to another client, failing to act with reasonable diligence and promptness and failing to protect the client’s interest upon withdrawal from the representation; and 5) with respect to two other clients, failing to act with reasonable diligence and promptness.
In re Michael J. Beattie. Bar No. 450873. September 11, 2008. In a reciprocal matter from Virginia, the D.C. Court of Appeals imposed identical reciprocal discipline and suspended Beattie for six months, followed by three years of unsupervised probation, subject to the conditions imposed by the Virginia court in Virginia State Bar v. Beattie, Case No. CL2006-10927. Based upon those conditions, in the event Beattie violates probation during this three-year period, the order shall be revoked and Beattie shall be suspended for three years, unless the Virginia sanction is for a shorter period of time. Under that circumstance, Beattie may receive sanction identical to the Virginia sanction. Beattie’s Virginia discipline stemmed from two complaints relating to his representation of one client who had retained him in July 2003 in connection with her sex discrimination case in the United States District Court for the Eastern District of Virginia. Beattie failed to inform this client that he had been indefinitely suspended from the federal court in August 2003 in an unrelated matter and failed to communicate with the client. Beattie hired a part-time attorney to prepare and sign pleadings filed with the federal court, but deadlines were missed, pleadings were filed out of time, and no attorney showed up for several pretrial conferences. The client’s case was ultimately dismissed on summary judgment. In addition, Beattie approached another Virginia lawyer, stating that his firm was “short-staffed” and asking the lawyer to “help him out at the deposition” because Beattie was “not licensed” in the federal court. The Circuit Court of Fairfax County suspended Beattie based upon an agreed disposition proposed jointly by the Virginia State Bar and Beattie. Beattie was found to have violated rules relating to competence, diligence, communication with client, fairness to opposing party and counsel, truthfulness in statements to others, improper supervision of a subordinate lawyer, and dishonesty.
In re Michael H. Ditton. Bar No. 436463. August 14, 2008. In a reciprocal matter from Virginia, the D.C. Court of Appeals remanded this matter to the Board on Professional Responsibility to take a closer look at whether conduct established in the Virginia proceedings constitutes misconduct in the District of Columbia, and whether substantially different discipline is warranted. In 2000 Ditton applied for admission to the State Bar of Montana and, thereafter, the Commission on Character and Fitness denied his application, concluding, as the Supreme Court of Montana later summarized, that “Ditton’s behavior as shown in the record constituted evidence of abuse of legal process, neglect of financial responsibilities, and current mental or emotional illness or disorder.” The Supreme Court of Montana affirmed the decision to deny Ditton’s admission to the bar of that state. In August 2001, after being advised that the Supreme Court of Montana had denied Ditton’s admission, the Virginia State Bar initiated disciplinary proceedings based upon conduct described in the Montana rulings. In August 2004 Ditton was present and testified at an evidentiary hearing before a three-judge panel of the Circuit Court for the City of Alexandria on a Rule to Show Cause why his law license should not be suspended or revoked. The circuit court found clear and convincing evidence that Ditton had violated the Virginia Code of Professional Responsibility and Rules of Professional Conduct that prohibit knowingly aiding another to do so; committing a crime or other deliberately wrongful act that reflects adversely on the lawyer’s fitness to practice law; engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation which reflects adversely on the lawyer’s fitness to practice law; knowingly making a false statement of law or fact; knowingly engaging in other illegal conduct or conduct contrary to a disciplinary rule; and making a false statement of fact or law to a tribunal. The circuit court suspended Ditton’s license to practice law in the Commonwealth of Virginia for five years. On appeal, the Supreme Court of Virginia affirmed the circuit court’s order.
In re John R. Fuchs. Bar No. 411506. September 25, 2008. In a reciprocal matter from California, the D.C. Court of Appeals suspended Fuchs for two years, stayed as to all but the first six months, and placed Fuchs on probation for three years, subject to the conditions imposed by the California Supreme Court. The California Supreme Court suspended Fuchs for a conflict of interest and failure to notify a client upon receipt of funds.
In re Alfred A. Page Jr. Bar No. 480892. September 11, 2008. In a reciprocal matter from Maryland, the D.C. Court of Appeals suspended Page for 30 days as identical reciprocal discipline. The Attorney Grievance Commission of Maryland filed a Petition for Disciplinary or Remedial Action against Page, charging him with failure to timely respond to Maryland Bar Counsel’s requests for a written response regarding a disciplinary matter. Thereafter, Page executed a joint petition with the Attorney Grievance Commission and acknowledged that if a hearing were held, sufficient evidence could be produced to sustain the allegation that he violated MRPC 8.1(b), thereby consenting to a 30-day suspension for the misconduct.
In re David P. Weaver Jr. Bar No. 427688. August 14, 2008. In a reciprocal matter from California, the D.C. Court of Appeals imposed functionally equivalent reciprocal discipline and suspended Weaver for five years with fitness. Weaver voluntarily resigned from the California Bar while a disciplinary investigation, following a felony conviction, was pending. Specifically, Weaver was convicted in a California Superior Court of conspiracy to commit the unauthorized practice of law.
Interim Suspensions by the District of Columbia Court of Appeals
In re Ronald M. Cohen. Bar No. 949214. September 25, 2008.
In re Yalonda M. Douglas. Bar No. 476223. September 10, 2008.
In re Lisa C. Gerideau. Bar No. 445402. September 30, 2008.
In re Marshall E. Rosenberg. Bar No. 440649. September 30, 2008.
In re Steven G. Schulman. Bar No. 359304. August 19, 2008.
In re Ephraim C. Ugwuonye. Bar No. 474318. September 10, 2008.
In re Aaron D. Weinrauch. Bar No. 420618. September 30, 2008.
Disciplinary Orders Taken by Other Jurisdictions
In accordance with D.C. Bar Rule XI, § 11(c), the D.C. Court of Appeals has ordered public notice of the following nonsuspensory and nonprobationary disciplinary sanctions imposed on D.C. attorneys by other jurisdictions. To obtain copies of these decisions, visit www.dcbar.org/discipline and search by individual names.
In re Emmanuel Damascus Akpan. Bar No. 346312. On June 19, 2008, the Court of Appeals of Maryland reprimanded Akpan.
In re Larry D. Coleman. Bar No. 310763. On April 15, 2008, the Supreme Court of Missouri reprimanded Coleman.
In re John A. Elmendorf. Bar No. 454508. On April 17, 2008, the Court of Appeals of Maryland reprimanded Elmendorf.
In re Mindy Farber. Bar No. 375104. On May 27, 2008, the United States District Court for the District of Maryland reprimanded Farber.
In re Anthony G. Filomeno. Bar No. 427323. On May 18, 2007, the Supreme Court of New Jersey censured Filomeno.
In re Cheryl Henderson. Bar No. 164418. On November 17, 2005, the Attorney Grievance Commission of Maryland reprimanded Henderson.
In re Paul Lee Warren. Bar No. 425193. On July 7, 2008, the Second District Committee of the Virginia State Bar publicly reprimanded Warren without terms.
Informal Admonitions Issued by the Office of Bar Counsel
In re E. Scott Frison Jr. Bar No. 478092. July 22, 2008. Bar Counsel issued Frison an informal admonition for filing a frivolous action and engaging in conduct that seriously interfered with the administration of justice. Specifically, Frison sued a former client and successor counsel for defamation based on allegations in the former client’s letter to Bar Counsel. Rules 3.1(a) and 8.4(d).
In re Stanley H. Goldschmidt. Bar No. 376482. July 22, 2008. Bar Counsel issued Goldschmidt an informal admonition for prosecuting a tortious interference action that had no basis in law or in fact and resulted in the imposition of Rule XI sanctions by the Superior Court of the District of Columbia. Rules 3.1 and 8.4(d).
In re Arthur G. Kahn. Bar No. 914192. July 22, 2008. Bar Counsel issued Kahn an informal admonition for prosecuting a tortious interference action that had no basis in law or in fact and resulted in the imposition of Rule XI sanctions by the Superior Court for the District of Columbia. Rules 3.1 and 8.4(d).
In re Kevin F. Patcha. Bar No. 492892. July 22, 2008. Bar Counsel issued Patcha an informal admonition for failing to provide competent representation, serve a client with the skill and care commensurate with that generally afforded to clients by other lawyers in similar matters, and represent a client zealously and diligently within the bounds of the law while representing a client in an immigration matter. Rules 1.1(a), 1.1(b), and 1.3(a).
The Office of Bar Counsel compiled the foregoing summaries of disciplinary actions. Informal Admonitions issued by Bar Counsel and Reports and Recommendations issued by the Board on Professional Responsibility are posted on the D.C. Bar Web site at www.dcbar.org/discipline. Most board recommendations as to discipline are not final until considered by the court. Court opinions are printed in the Atlantic Reporter and also are available online for decisions issued since August 1998. To obtain a copy of a recent slip opinion, visit www.dcappeals.gov/dccourts/appeals/