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PA Bulletin, Doc. No. 20-1729

THE COURTS

Title 204—JUDICIAL SYSTEM GENERAL PROVISIONS

PART V. PROFESSIONAL ETHICS AND CONDUCT

[ 204 PA. CODE CH. 81 ]

Amendment of Explanatory Comment (5) to Rule 1.5, Pennsylvania Rules of Professional Conduct; No. 204 Disciplinary Rules Doc.

[50 Pa.B. 6993]
[Saturday, December 12, 2020]

Order

Per Curiam

 And Now, this 25th day of November, 2020, upon the recommendation of the Disciplinary Board of the Supreme Court of Pennsylvania to adopt new Explanatory Comment [5] to Rule 1.5 of the Pennsylvania Rules of Professional Conduct (''Pa.R.P.C.''), as published for comment in the Pennsylvania Bulletin, 50 Pa.B. 4013 (August 8, 2020):

 It Is Ordered pursuant to Article V, Section 10 of the Constitution of Pennsylvania, that the new Explanatory Comment [5] to Rule 1.5 of the Pa.R.P.C. is adopted, and that prior Explanatory Comments [5] and [6] are renumbered as [6] and [7], as set forth in the following form.

 This Order shall be processed in accordance with Pa.R.J.A. No. 103(b), and shall be effective immediately.

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:

*  *  *  *  *

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.

Successor Counsel in Contingency Fee Matters

 (5) Unlike the situation in (4), which addresses division of fee between lawyers from different firms who are simultaneously representing a client, there may arise a situation where a client enters a contingent fee agreement with one lawyer (''predecessor counsel''), terminates that lawyer's services without cause, and enters a new contingent fee agreement with a different lawyer (''successor counsel''). In such a situation, and pursuant to a lawyer's duties as set forth in paragraphs (b) and (c), successor counsel must notify the client, in writing, that some portion of the fee may be due to or claimed by predecessor counsel for services performed prior to the termination, and should discuss with the client the effect of that claim on successor counsel's proposed fee agreement. If successor counsel will be involved in negotiating fees with predecessor counsel on the client's behalf, successor counsel should evaluate whether the circumstances give rise to a conflict of interest with the client and, if so, must obtain appropriate informed consent to the conflict as set forth in Rule 1.7. If a dispute arises regarding distribution of the recovery, successor counsel must hold the disputed portion of the funds in trust pending resolution, in accordance with Rule 1.15(f). See ABA Formal Opinion 487 (June 18, 2019) (relating to successive contingent fee agreements). While part II.A of Formal Opinion 487 would require the client's written informed consent, Rule 1.7 does not require a writing. However, if informed consent is deemed necessary under the circumstances, written consent may benefit both the client and successor counsel for the reasons set forth in Explanatory Comment (20) to Rule 1.7.

Disputes over Fees

 [(5)] (6) If a procedure has been established for resolution of fee disputes, such as an arbitration or mediation procedure established by the bar, the lawyer should conscientiously consider submitting to it. Law may prescribe a procedure for determining a lawyer's fee, for example, in representation of an executor or administrator, a class or a person entitled to a reasonable fee as part of the measure of damages. The lawyer entitled to such a fee and a lawyer representing another party concerned with the fee should comply with the prescribed procedure.

 [(6)] (7) It is Disciplinary Board policy that allegations of excessive fees charged are initially referred to Fee Dispute Committees for resolution.

[Pa.B. Doc. No. 20-1729. Filed for public inspection December 11, 2020, 9:00 a.m.]


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