Fee Agreement for Hourly Rate Plus Contingent Fee

 

Opinion rules that a lawyer may charge a client an hourly rate, or a flat rate, for his or her services plus a contingent fee on the client's recovery provided the ultimate fee paid by the client is not clearly excessive and the client is given an honest assessment of the potential for recovery.

 

Inquiry:

 

Attorney A would like to enter into a fee agreement with a client that requires the client to pay a minimum fee calculated on an hourly charge or a flat fee basis plus a contingent fee on any amount recovered for the client. Is this fee arrangement ethical?

 

Opinion:

 

Yes, provided the fee that is ultimately charged and collected from the client is not clearly excessive in violation of Rule 2.6(a). Prior to entering into such a fee agreement with a client, a lawyer should fully explain to the client how the fee will be calculated and should give the client an honest assessment of the potential for recovery. Comment [2] to Rule 2.6. As events occur during the representation that may affect an earlier estimate of the ultimate fee, the lawyer should provide the client with a revised estimate of the fee and a revised assessment of the potential for recovery.