Retainer Agreements and Rule 1.5(b)
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[1] 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.”[2]
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,[3] 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[4] to an informal admonition.[5]
In one of the more recent cases dealing with this issue, the respondent
in In re Padgett[6] 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.[7]
Similarly, the respondent in In re Jones[8]
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:
Notes
[1] 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.
[2] 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.”
[3] 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.
[4] D.C. Bar Rule XI, § 8.1.
[5] D.C. Bar Rule XI, § 8.
[6] In re Squire Padgett, Bar
Docket No. 2007-D263.
[7] 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.
[8] In re Antoini M. Jones, Bar
Docket No. 230-01.
[9] 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.
[10] 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.
[11] 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).
[12] 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?
[13] 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.
[14] D.C. Bar Rule XIII(a).
[15] 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).
[16] 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
Original Matters
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.
Reciprocal Matters
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
Original Matters
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.
Reciprocal Matters
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/
opinions_mojs.jsp.
