Choosing What To Keep

A comprehensive retainer agree­ment can go a long way in helping both lawyer and client under- stand the scope of their fee ar­rangement. But it’s not always clear exactly what ground a retain­er agreement may cover, and a lawyer must be careful to avoid potential pitfalls when crafting such an agreement.

Recent court decisions and ethics opinions offer guidance on some of these issues.

A Rhode Island ethics opinion, for instance, concludes that a retainer agreement may not allow a lawyer to stop working on a client’s case if the client fails to pay agreed-­upon fees unless the lawyer withdraws from the case altogether.

The opinion by the Ethics Advi­sory Panel to the Rhode Island Su­preme Court relied on a state ethics provision that is identical to Rule 1.3 (Diligence) of the ABA Mod­el Rules of Professional Conduct. Model Rule 1.3 directs a lawyer to “act with reasonable diligence and promptness in representing a cli­ent.” Furthermore, the comment to Rule 1.3 states that, unless the relationship is terminated, “a lawyer should carry through to conclusion all matters undertaken for a client.”

Thus, the Rhode Island panel suggests that, even when a client breaches the retainer agreement, the lawyer’s only options are to continue working on the case or withdraw. Opinion 2003-8 (Dec. 4, 2003).

ABA Model Rule 1.16 (Declining or Terminating Rep­resentation) permits a lawyer to withdraw from representation, subject to giving the client reasonable warnings, if “the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services.”


The Tennessee Court of Appeals recently approved a fee agreement that provided for lawyer fees to be determined on the basis of “results obtained,” in addition to a specified hourly rate. Silva v. Buckley, No. M2002-00045-COA-R3-CV (Dec. 31, 2003).

The fee agreement stated, while the lawyer would bill on an hourly rate basis, “Your ultimate fee may vary depending on the time limitations imposed by you, the time and labor required, the novelty and difficulty of the questions involved, the skill requisite to perform the legal service properly, or the amount involved and the results obtained.”

The client said the language meant that factors listed in the agreement would help set the fee through their effect on how many hours the lawyer worked on the case.

But the appellate court held that, from the language of the agreement, the client “knew, should have known or at least had reason to know that the agreement provided for a fee in addition to [the lawyer’s] customary hourly fee.”

Addressing another issue, the Ohio Court of Appeals (8th District) ruled that an attorney could not rely on a provision in a retainer agreement to force a client to submit his malpractice claim to binding arbitration. Thornton v. Haggins, No. 83055 (Dec. 24, 2003).

ABA Model Rule 1.8 (Conflict of Interest: Prohibited Transac­tions) states, “A lawyer shall not make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement.” But Ohio’s version of the rule does not allow for independent representation to overcome the restriction. And the Thornton court cited an earlier opinion by the Ohio Su­preme Court’s Board of Commis-­ sioners on Grievances and Disci­pline suggesting that “it reflects poorly on the profession for clients to have to ‘hire a lawyer to hire a lawyer.’ ” Opinion 96-9 (1996).

The Ohio appellate court did rec­ognize that other courts and ethics authorities differ on this issue. The comment to ABA Model Rule 1.8, for instance, states that the rule does not “prohibit a lawyer from entering into an agreement with the client to arbitrate legal malpractice claims, provided such agreements are enforceable and the client is fully informed.”

Those goals should be the target for any addition to a retainer agreement.

Arthur Garwin is professionalism counsel with the ABA Center for Professional Responsibility.

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