Concept
Related Fee Rules
Reasonableness of the fee
Related Fee Rules
Rule 1.5(b) requires the lawyer to tell the client what the client will pay, and to do it early. The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible must be communicated to the client, preferably in writing, before or within a reasonable time after the representation begins, and any change in the basis or rate of the fee or expenses must be communicated too.1 The one exception covers a regularly represented client whom the lawyer will charge on the same basis or rate as before. The duty matters because the reasonableness standard of paragraph (a) works only in hindsight, when a tribunal reviews a bill and asks whether it was fair. Communication works in foresight. A client who hears the price at the start can object, bargain, or hire someone else before any cost accrues, so the standard need not carry the whole burden of protecting a client who first learns the price from the invoice.
Paragraph (b) prefers a writing but does not demand one. At least nine states depart from the Model Rule and require a written fee agreement or other written notice of the fee, at least above a minimal amount.2 Where a lawyer gives no written confirmation of the fee information, the presumption should favor the client's reasonable understanding if a dispute later arises about fees.3 The lawyer was the party who could have recorded the terms, and the lawyer bears the cost of leaving them unrecorded.
A change in fee terms during the representation draws more suspicion than the original terms did, and the client's position by then explains why. The client has come to depend on the lawyer's services and may suffer adverse consequences if forced to seek new counsel to avoid an increase. The lawyer's leverage is greatest when the client's alternatives are weakest. Agreements that change the basis or rate of a fee midstream are therefore viewed with “great suspicion,” and modifications of existing fee agreements are usually suspect because of the fiduciary nature of the client-lawyer relationship. The result is a presumption of unfairness.4 The presumption can be overcome, because a revised arrangement is not void and may be sustained if it was fairly made with the full knowledge and understanding of the client. As a general rule, though, a lawyer may not withdraw, or threaten to withdraw, to coerce a client into accepting an increase above the previously agreed rate.5
An increase announced in advance stands on different footing. Where a firm periodically adjusts its lawyers' hourly rates and has warned the client in advance that adjustments may be made, notice of a reasonable increase is unremarkable.6 The warning removes the surprise, and the lawyer needs no leverage to make the change.
Paragraphs (a) and (b) do separate work, so satisfying one leaves the other open. A lawyer who told the client the rate clearly and then charged an amount far out of line with the services has communicated properly and has still violated the ban on charging an unreasonable fee.7 A lawyer who charged a fair price but never communicated the basis or rate, in a case where no exception applies, has violated the communication duty even though the amount was reasonable.8 Contingent fees fall under the same standard. Rule 1.5(a) forbids agreeing to, charging, or collecting an unreasonable fee of any form, and whether a fee is fixed or contingent is itself one of the factors for judging reasonableness.9 A contingent percentage therefore gets no immunity from review because the method is permitted. It enters the reasonableness analysis as one factor among the eight. The formal requirements for contingent fee agreements, and the matters in which such fees are prohibited, belong to a separate reading.
Fee division shows the same pattern from another direction. The profession historically imposed strict restrictions on dividing a client's fee among lawyers who were not associated inside the same firm, while lawyers within a firm could divide fees among themselves on any basis they chose. A “rainmaker” might obtain a matter from a client, delegate all of the legal services to other lawyers in the firm, and still receive a substantial share of the fee without consulting the client or implicating the disciplinary rules.10 Rule 1.5(e) now governs the division of a fee between lawyers who are not in the same firm, and permits it only if its conditions are met.11 Most of those conditions are taught elsewhere, but one ties the division back to this chapter. Under paragraph (e)(3), the total fee must be reasonable, which links the fee-splitting provision to the general standard of Rule 1.5(a).12
The reason follows from who pays. A division changes how the lawyers share a fee, and it should not change what the client pays. If the total did not have to be reasonable, lawyers could fund a referral share by raising the total, and the client would pay a premium for an introduction that added nothing to the work. Paragraph (e)(2) separately requires the client to agree to the arrangement, including the share each lawyer will receive, with the agreement confirmed in writing. That agreement does not rescue an inflated total, because Rule 1.5(a) forbids even making an agreement for an unreasonable fee.13
On the MPRE, a stem that mentions a midstream rate increase, a contingent percentage, or a referral share is asking how one particular rule feeds back into reasonableness. The path is the same each time. The particular rule asks for communication, agreement, or a certain form, and the total fee must still be reasonable under Rule 1.5(a).