Sunday, September 12, 2021

Rule 1.5 is Alive!


Image by pasja1000 from Pixabay

If Colo. RPC 4.2 is the ethics rule every lawyer knows by heart, Rule1.5
is the rule every lawyer should commit to studying, for it concerns a subject near and dear to every attorney’s heart and financial well‑being: legal fees.

During a time in which other ethics rules – notably those concerning advertising and solicitation – have contracted, Rule 1.5 has grown exponentially.  Since its adoption in 1993, it has been amended no fewer than seven times: in 2000, 2001, 2002, 2007, 2008, 2011, and 2016.

This history reflects Rule 1.5’s status as an ethics laboratory for the Colorado Supreme Court.  It now weighs in at a beefy eight sections and 37 subsections.  Within its bounds one will find not only the original rule prohibiting unreasonable fees, but also the contingent fee rule and forms (recently relocated from Chapter 23.3), the Sather rule (prohibiting nonrefundable fees and retainers), the flat fee rule, the prohibition on referral fees, the “engagement retainer fee” rule (what in law school was called a “general retainer”), and the requirements that the basis or rate of fees and expenses must be communicated to new clients in writing, and that changes in fees or expenses must be promptly communicated to all clients in writing.  

In short, there’s a lot of important meat on the bone of Rule 1.5 that every lawyer should digest, since the penalty for failing to understand its intricacies and observe its strictures is the risk of professional discipline.  As if an additional incentive was necessary, failure to adhere to Rule 1.5 is also a basis for voiding one’s fee agreement.

For those who relish the prospect of studying the Rules of Professional Conduct with the same zeal as pumping out a septic tank I have bad news and good news.  The bad news is that Rule 1.5 has just been amended again (Rule Change 2021(18), adopted 9 September 2021, effective 1 January 2022.)  The good news is that, for lawyers who pay heed to this most recent change, the Colorado Supreme Court has done the Bar a great service by mandating a practice I have been preaching all lawyers should voluntarily commit to for years.  The revised rule will require that, in addition to communicating the basis or rate of fees or expenses to clients, attorneys must also communicate “the scope of the representation.”  Amended Colo. RPC 1.5(b)(2).  Can I get an “Amen?”

As I sermonized in an earlier blog, Hello Goodbye: The Alpha and Omega of the Attorney-Client Relationship, “There is no longer any excuse for not having a well-written scope of representation clause.”  Now there really is no excuse.  The failure to “communicate to [a] client in writing . . . the scope of the representation, except when the lawyer will perform services that are of the same general kind as previously rendered to a regularly represented client,” could soon get one grieved. 

Moreover, as I preached in The Rules of Unwritten Engagement, the failure to take advantage of Rule1.2(c)’s ability and right to “limit the scope or objectives, or both, of the representation”[1]  is equivalent to writing a blank check of liability payable to the order of your client.  An unwritten scope of services has terms – you just won’t like them:

Image by Monika Robak from Pixabay

1.   Scope of Services.  We shall provide all legal services you have requested of us, may request of us in the future, claim to have requested, thought about requesting, or should have requested, whether or not you actually request such services and regardless of whether we could have conceivably known or remotely anticipated your need for such services.  Our work for you will be unlimited in scope, as will our liability for neglecting any such work or any deadlines, laches, or statutes of limitation associated therewith.  After we complete the work, we assume full and continuing responsibility to advise you on all matters affecting the work we have performed or should have performed for you, forever.

The amendment to Rule 1.5(b) has converted an attorney’s right and ability to limit the scope of representation, as well as professional liability, into a duty – one every lawyer should happily comply with.  Happy New Year.

[1] Provided “the limitation is reasonable under the circumstances and the client gives informed consent.”