Presented at the Maine State Bar Association Litigation Institute
Opinion #206. Non-Refundable Flat Fee Agreements; Issued by the Professional Ethics Commission Date Issued: December 12, 2012
The Commission has been asked to review and advise as to the current ethical propriety of a flat fee arrangement whereby the lawyer agrees to perform all services for a set price. The fee agreement specifically states that the fee is a non-refundable minimum fee deemed earned by the Lawyer upon the execution of the agreement. The agreement also states that the client acknowledges the fee is not excessive.
The question is whether such an agreement is enforceable and/or proper under the Maine Rules of Professional Conduct.
An opinion on this question requires a review of the definitions and provisions of several of the Maine Rules of Professional Conduct, as illuminated by reference to opinions in other jurisdictions.
M. R. Prof. Conduct 1.5(a) lists the factors to be considered in determining the reasonableness of a fee, which include, inter alia, the time and labor required, the responsibility assumed, the amount involved and the results obtained. Comment 4 to the Rule states that "[a] lawyer may require advance payment of a fee, but is obligated to return any unearned portion." See also M. R. Prof. Conduct 1.16(d), which provides that upon termination of representation "a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests," and specifically requires an attorney’s "refunding [of] any advance payment of fees or expenses that has not been earned or incurred."