Legal Ethics Opinion #1562

Fees: Arbitration of Dispute: Duty to Report Misconduct

You have presented a hypothetical situation in which a local bar
association operates a Fee Arbitration Committee which hears fee
disputes between attorneys and clients with the consent of both
parties.  As part of the process, Committee members take
telephone calls from the public and, if the caller requests,
he/she is sent an application for fee arbitration.

You indicate that a client calls a member of the Fee Arbitration
Committee and reports the following conduct of an unnamed
attorney:

     Client received a "Final Bill" from the attorney. Upon
     review of the bill, Client noticed that a $700.00 payment
     was not   credited to her account.  Client sent a copy of
     her $700.00 check and subsequently received a "Revised Final
     Bill" crediting her account with the $700.00 payment, but
     revising and adding other charges so that the amount due
     remained the same.  Client then called attorney on several
     occasions but was unable to speak to him.  The attorney's
     secretary insisted that the client pay the revised bill. 

     Client made monthly payments on the bill but was charged for
     the preparation of the bill at the attorney's hourly rate of
     $150.00 per hour.  Client has objected to the charges, but
the  secretary has said that it is a normal charge. 

     There is no written fee agreement. To the best of the
     client's recollection, the only agreement was to pay $150.00
     per hour to process a divorce.  

You have asked the committee to opine whether, under the facts of
the inquiry, (1) if the above attorney consents to fee
arbitration, is it reasonable to assume that his [honesty,
trustworthiness, or] fitness should not be challenged; (2) if
the attorney adequately explains his fees to the Committee as a
part of arbitration and if the fees are reasonable, does that
satisfy the attorney's requirements under DRs 2-105(A) and (B);
(3) what, if anything, should be reported by the Committee to the
bar as an ethical violation; and (4) if the Committee (or members
who know about the case) fail to report the misconduct, are they
in violation of DR 1-103(A).

The appropriate and controlling Disciplinary Rules related to
your inquiry are DR 1-103(A) which states in pertinent part that
a lawyer having information indicating that another lawyer has
committed a violation of the Disciplinary Rules that raises a
substantial question as to that lawyer's honesty,
trustworthiness, or fitness to practice law in other respects
shall report such information to the appropriate professional
authority; DR 2-105(A) which states that a lawyer's fees shall be
reasonable and adequately explained to the client; and DR 2-
105(B) which provides that the basis or rate of a lawyer's fee
shall be furnished on request of the lawyer's client.

The committee responds relative to your inquiries as follows.

As to your first inquiry, the committee is of the opinion that if
members of the Fee Arbitration Committee conclude, based upon a
substantial degree of certainty, that a lawyer has committed a
violation of the Disciplinary Rules, the fact that the lawyer has
agreed to submit to fee arbitration would not in and of itselfjustify the members of the Fee Arbitration Committee in
concluding that the violation fails to raise substantial
questions as to that lawyer's honesty, trustworthiness, or
fitness to practice law.  Conversely, the committee is of the
further opinion that the attorney's refusal to participate in the
arbitration process would not in and of itself raise a
substantial question as to the lawyer's honesty, trustworthiness,
or fitness to practice law. 
   
Regarding your second inquiry, the committee is of the opinion
that an adequate explanation by the attorney of his fees to the
Fee Arbitration Committee would not satisfy the requirement of DR
2-l05(A) that the attorney provide an adequate explanation of the
fees to the client.  Ethical Consideration 2-2l provides helpful
guidance: "As soon as feasible after a lawyer has been employed,
it is desirable that he reach a clear agreement with his client
as to the basis of the fee charges to be made."  This committee
is without sufficient facts to determine whether or not there has
been a violation of the requirement set forth in DR 2-105(B),
i.e., whether the basis or rate of a lawyer's fee was furnished
on request of the lawyer's client.

As to your third inquiry, the committee is of the opinion that if
the members of the Fee Arbitration Committee conclude, based upon
a substantial degree of certainty, that misconduct has occurred
which raises a substantial question as to the attorney's honesty,
trustworthiness, or fitness to practice law in other respects,
the chair of the committee and its members are required by DR l-
l03(A) to report, without unreasonable delay, such misconduct to
the Virginia State Bar.  See LEOs #l338, #l528, #l545.

Finally, as to your fourth inquiry, the committee is of the
opinion that failure of the Fee Arbitration Committee chair or
committee members (who know about the case) to report the
attorney's misconduct, without unnecessary delay, would be
improper and violative of DR 1-103(A). 

Committee Opinion
February 8, 1994