Last week, I discussed whether a fixed fee paid at the beginning of a representation should be deposited into a law firm’s operating or trust account. Before an attorney even reaches that decision, he or she must ensure that the fixed fee charged to the client passes ethical muster.
These ethical considerations vary depending on the matter and may become complex and nuanced as the situation changes.
Here’s one hypothetical addressed in Formal Advisory Op. No. 11.1:
“A sophisticated user of legal services offers to retain a lawyer or law firm to provide it with an indeterminate amount of legal services of a particular type for an agreed upon fixed fee.”
Ultimately, fixed-fee agreements are allowable under this hypothetical situation as long as the fee is reasonable and not excessive and the lawyer fulfills his or her obligation to provide competent, diligent representation, even if the work becomes less profitable than initially anticipated.