Effective November 1, 2018, the State Bar of California has amended California Rules of Professional Conduct 1.15 (former Rule 4-100) to establish new rules on handling flat fees. Under Cal Rules of Prof Cond 1.15(a), all funds received or held by a lawyer or law firm for the benefit of a client must be kept in a trust account. But there are a couple of exceptions.
The following is a guest blog post by Megan Zavieh. Megan focuses her practice exclusively on attorney ethics, providing guidance to attorneys, representing attorneys facing State Bar discipline, podcasting, and writing extensively on ethics issues.
California’s new Rules of Professional Conduct, effective November 1, 2018, recognizes a trend in legal services billing—flat fees. Flat fees are becoming more common as an alternative to the traditional billable hour. As they rise in popularity outside of criminal law, the rules directly address them. Here’s what you need to know and do.
It’s like magic: California’s CC §1717 transforms a unilateral attorney fee provision in a contract into a reciprocal one! When the contract provides for attorney fees to either a particular party or the prevailing party, the prevailing party “on the contract” is entitled to recover reasonable attorney fees regardless of whether that party was the party specified in the contract. But taking advantage of this statute depends on meeting the following five requirements.
Common scenario: You do some work for a client and then pass off the client to another attorney, agreeing to split the attorney fees. Later you want to get your share of the fees. The Rules of Professional Conduct require that you get the client’s written consent to any fee-splitting agreement. Did you get the client’s consent right away, or are you now at the mercy of the other attorney?