LEO: Domestic Relations - Contingent Fees LE Op. 1081
Domestic Relations - Contingent Fees.
May 17, 1988
You have requested an informal, advisory opinion from the Virginia State
Bar Standing Committee on Legal Ethics concerning a proposed retainer
agreement which was formalized between you and a client on June 12, 1985.
Your client, 29 years old, retained you to file a suit against her father
for child abuse which occurred when your client was a child. In the
retainer agreement, you and your client agreed that your fee would be $100
per hour and that the client would provide you an initial retainer of $2,
500. It was agreed that the client would continue to pay you, even after
the initial retainer was expended, until the matter was settled. In the
event of a judgment or a settlement, you would be entitled to one-third of
such sums received, but from that proportion it was agreed that all of the
hourly fees your client had up to that time paid would be deducted. In the
event that your share of such a judgment or settlement was less than the
hourly sums received, you would not be entitled to any part of such
judgment or settlement, but neither would you be required to forfeit any
part of fees due or paid.
Your client's present counsel has accused you of acting unethically by
entering into this retainer agreement.
In LE Op. 189 the State Bar set forth its reluctance to approve
contingent fees in domestic-relations cases. The Committee opined in that
opinion that contingent fees are to be approved in domestic-relations
cases only in circumstances where the impact on human relationships will
clearly not be adversely affected. The Committee does not believe the
situation which you described falls under the guidelines of LE Op. 189.
Therefore, the Committee refers you to DR:2-105(C), which states "A fee
may be contingent on the outcome of the matter for which the services are
rendered, except in criminal cases or other matters in which a contingent
fee is prohibited by law. A contingent fee agreement shall state the
method by which the fee is to be determined, including the percentage or
percentages that shall accrue to the lawyer in the event of settlement,
trial, or appeal, expenses to be deducted from the recovery, and whether
expenses are to be deducted before or after the contingent fee is
calculated. Upon conclusion of a contingent fee matter, the lawyer shall
provide the client with a closing statement showing the fee and the method
of its determination."
The Committee believes that the contingency agreement which you entered
into with your client complies with the requirements of DR:2-105(C). The
Committee does advise that upon conclusion of the matter, you should
provide the client with a closing statement showing the fee and method of
Committee Opinion May 17, 1988