SBM - State Bar of Michigan

CI-559

November 11, 1980

SYLLABUS

    "Nothing in the Code of Professional Responsibility prohibits the use of an lawyer-client agreement which provides that only certain work will be done for the fee; that additional work will be performed solely upon the payment of an additional fee; and that the additional fee shall be paid in advance, provided that full disclosure of these terms are made to the potential client in advance and the agreement otherwise complies with Disciplinary Rules 2-106, 2-107 and 2-110."

TEXT

You ask the following questions with regard to written fee agreements between an lawyer and a prospective client:

  1. Prior to establishing a lawyer-client relationship, may a lawyer enter into a written contract with the prospective client providing that certain services only will be provided the client and additional services shall only be provided upon payment of additional fees. For instance, may a lawyer by contract, limit his or her services to a prospective client in a divorce proceeding by providing that for a certain fee plus costs, the lawyer will prepare a summons and complaint, have the summons and complaint served upon the defendant, prepare a judgement of divorce and appear at one court hearing, but shall provide no further services.

  2. If the lawyer is allowed to enter into such a contract as provided in paragraph 1 above, may he or she (or must he or she) provide additional court hearings, friend of the court meetings or respond to additional pleadings such as motions or negotiate a property settlement agreement, solely upon the payment of additional fees?

  3. If the lawyer may provide separately for the provisions of additional services as specified in question #2, may the contract also provide that these services shall only be rendered if the payment for them is received in advanced?

All of the above questions are predicated upon a contract being entered into prior to the establishment of the lawyer-client relationship.

It is the opinion of this Committee member that there is no problem with an agreement of the type which you propose provided, of course, that full disclosure of the contractual terms is made to the potential client. Just recently, this Committee approved and, in fact, encouraged this type of retainer agreement in many lawyer-client relationships. See Informal Opinion 537 dated July 22, 1980.

Various bar association ethics committees have supported this position on many occasions. In its Opinion #369, the Committee on Professional Ethics of the Association of the Bar of the City of New York and the New York County Lawyer's Association held that it was not professionally improper for a lawyer, prior to the institution of a divorce proceeding, to ask his or her client for a fee and for the necessary disbursement incident to commencing action.

Moreover, the Committee on Professional Ethics of the American Bar Association held in its Informal Opinion 334 that unless it will prejudice a client's legal position, a lawyer need not perform additional services until he or she is paid.