Opinion 1914

The inquiring lawyer asks three questions:

1. May a lawyer use a fee arrangement with a collection client that is in part fixed and in part contingent?

2. If the lawyer uses such and arrangement, must he disclose it to a court when presenting his fee petition?

3. May the arrangement specify the portion of the judgment to which the contingent component applies, i.e., just the contract damage awarded to the plaintiff or the damages plus the court’s additional attorney fees awarded?

A fee arrangement that is part fixed and part contingent is permitted by RPC 1.5 and 1.8(j)(2) in a collection matter. The extent of any disclosure of such arrangement will depend on the particular rules applicable to lawyer fee applications in the court concerned. But, if such disclosure is required, then the lawyer must make that disclosure under RPC 3.3. If the lawyer is requested to provide or volunteers information about fees, the lawyer must comply with 8.4(c]. Although RPC 1.5 would permit the contingent fee component to apply to particular elements of the total judgment, if the judgment is to be collected over time, the requirements of RPC 1.5(c)(2) also apply.

You are not necessarily required to agree that your client gets the first dollars paid in. The monies collected from the debtor may be divided between you and the client pursuant to the fee agreement, provided that the fee agreement complies with RPC 1.5.

Advisory Opinions are provided for the education of the Bar and reflect the opinion of the Committee on Professional Ethics (CPE) or its predecessors. Advisory Opinions are provided pursuant to the authorization granted by the Board of Governors, but are not individually approved by the Board and do not reflect the official position of the Bar association. Laws other than the Washington State Rules of Professional Conduct may apply to the inquiry. The Committee's answer does not include or opine about any other applicable law other than the meaning of the Rules of Professional Conduct.