Client Consent and Reasonableness: Evidence, Not a Defense

Client Consent and Reasonableness: Evidence, Not a Defense

Rule 1.5(a) forbids a lawyer to make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses, and the first of those verbs does the work in this section.¹ A lawyer who makes an agreement for an unreasonable fee has already violated the rule, so the client's signature is part of the conduct under review and cannot also excuse it. The agreement still matters. A price that an informed client accepted after real negotiation is some evidence that the price is fair, and tribunals treat it that way. It is one input among many, though, and it never answers the question by itself. A fee that fails the factors does not become proper because the client said yes.

The weight of that evidence turns on two variables: how much the client knew and how much bargaining power the client had. A client who does not know what is being bought cannot tell a good price from a bad one. A client with no realistic alternative signs because refusing costs too much. In either situation the signature records the lawyer's terms and says little about the client's judgment.

The sources draw the line in just these terms. Disclosure by the lawyer and acquiescence by the client will not save a billing policy from being found unethical if its application results in an unreasonable fee.² Courts are least deterred by a client's consent when the fee is unconscionably large and the clients may lack effective information and bargaining power.³ Unsophisticated clients in family law, bankruptcy, and probate may be especially vulnerable to unscrupulous billing, and the prevalence of bad practices in some regions or sectors of the profession cannot lower the ethical standard.⁴

McCabe v. Arcidy presents the contrasting case. The court found that the lawyer, McCabe, had met his burden of proving that his fee agreement was fair and reasonable, in a lender-liability matter where the underlying claim ran between $8 million and $20 million.⁵ The parties could fully appreciate the agreement's implications, make an informed decision about the reasonableness of the fee, and decide whether to retain him. The contract was made before the representation began and apparently after considerable preliminary discussion and negotiation. The court saw no sign that one party had taken advantage of the other's ignorance, exerted superior bargaining power, or disguised unfair terms in small print.⁶

Both clients signed, so the signature explains neither result. What stood behind each signature explains both. The custody client had no leverage and no means of evaluating the billing practices, so the signature proved little. In McCabe the parties understood the terms and bargained over them before work began, so the agreement was strong evidence that the price had been tested in a fair bargain. Even there the court did not rest on the agreement. It also weighed the expert testimony, the complexity of the case, the size of the claim, the need for specialized knowledge, and McCabe's national reputation in lender-liability litigation.⁷ Consent helped the lawyer because it pointed the same way as the factors.

Some versions of the rule write disclosure into the test itself. One quoted version of Rule 1.5(a) lists as an eighth factor “whether the fee agreement or confirming writing demonstrates that the client had received a reasonable and fair disclosure of material elements of the fee agreement and of the lawyer's billing practices.”⁸ A factor is something to weigh with the others. Disclosure and acquiescence still cannot rescue a fee that turns out to be unreasonable.⁹

When a bar-exam stem stresses that the client read the letter, agreed to the rate, or never complained, it is testing whether you will treat consent as an answer. Start with the factors and ask whether the fee, and the way it was calculated, is reasonable. Then bring in the client's agreement as evidence, weighted by how well informed the client was and how much bargaining power the client had. It never turns an unreasonable fee into a proper one.