THE COURTS
Title 204—JUDICIAL SYSTEM GENERAL PROVISIONS
PART V. PROFESSIONAL ETHICS AND CONDUCT
[ 204 PA. CODE CH. 81 ]
Proposed Amendments to the Pennsylvania Rules of Professional Conduct Regarding Fees
[49 Pa.B. 7164]
[Saturday, December 7, 2019]Notice is hereby given that the Disciplinary Board of the Supreme Court of Pennsylvania (''Board'') plans to recommend to the Supreme Court of Pennsylvania that it adopt amendments to Pennsylvania Rule of Professional Conduct (''RPC'') 1.5 relating to fees, as set forth in Annex A. This proposed rule amendment adds a reference in the commentary to a recent American Bar Association (''ABA'') formal opinion on the topic of fee division in contingency-fee matters when a lawyer is replaced.
On June 18, 2019, the ABA issued Formal Opinion 487 (''Fee Division with Client's Prior Counsel'') to address fee splitting arrangements when a lawyer in a separate firm replaces the first lawyer in a contingency-fee case. The opinion underscores that a previous attorney, whose services are terminated without cause, may be entitled to a fee for services performed prior to discharge and that any proposed agreement between the initial attorney and successor attorney should be fully disclosed and discussed with the client. While this opinion is not binding precedent, it provides helpful guidance to successor counsel and predecessor counsel in this common situation. The original lawyer in a contingency-fee matter will often assert a lien on the proceeds. But if the client retains new counsel, that client may not understand there is a continuing obligation to pay the original lawyer for the value that lawyer contributed or was entitled to under the original fee agreement.
The Board proposes amending Comment (4) of RPC 1.5 to reference Formal Opinion 487, which will provide lawyers with an additional resource on the topic of splitting fees.
Interested persons are invited to submit written comments by mail or facsimile regarding the proposed amendments to the Executive Office, The Disciplinary Board of the Supreme Court of Pennsylvania, 601 Commonwealth Avenue, Suite 5600, PO Box 62625, Harrisburg, PA 17106-2625, Facsimile number (717-231-3381), Email address Dboard.comments@pacourts.us on or before January 6, 2020.
By the Disciplinary Board of the
Supreme Court of PennsylvaniaJESSE G. HEREDA,
Executive Director
Annex A
TITLE 204. JUDICIAL SYSTEM GENERAL PROVISIONS
PART V. PROFESSIONAL ETHICS AND CONDUCT
Subpart A. PROFESSIONAL RESPONSIBILITY
CHAPTER 81. RULES OF PROFESSIONAL CONDUCT
Subchapter A. RULES OF PROFESSIONAL CONDUCT § 81.4. Rules of Professional Conduct.
The following are the Rules of Professional Conduct:
CLIENT-LAWYER RELATIONSHIP Rule 1.5. Fees.
(a) A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee. The factors to be considered in determining the propriety of a fee include the following:
(1) whether the fee is fixed or contingent;
(2) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(3) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(4) the fee customarily charged in the locality for similar legal services;
(5) the amount involved and the results obtained;
(6) the time limitations imposed by the client or by the circumstances;
(7) the nature and length of the professional relationship with the client; and
(8) the experience, reputation, and ability of the lawyer or lawyers performing the services.
(b) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, in writing, before or within a reasonable time after commencing the representation.
(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.
(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support; or
(2) a contingent fee for representing a defendant in a criminal case.
(e) A lawyer shall not divide a fee for legal services with another lawyer who is not in the same firm unless:
(1) the client is advised of and does not object to the participation of all the lawyers involved; and
(2) the total fee of the lawyers is not illegal or clearly excessive for all legal services they rendered the client.
Comment: * * * * * Division of Fee
(4) A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist. Paragraph (e) permits the lawyers to divide a fee if the total fee is not illegal or excessive and the client is advised and does not object. It does not require disclosure to the client of the share that each lawyer is to receive. For additional information, see ABA Formal Opinion 487—Fee Division with Client's Prior Counsel (June 18, 2019).
* * * * *
[Pa.B. Doc. No. 19-1802. Filed for public inspection December 6, 2019, 9:00 a.m.]
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