Fees on a Napkin
As I was cleaning out continuing-legal-education files this week, I came across some interesting stuff. For example, I found a book, stuffed in a file folder, titled "Achievement: Reaching Personal Summits.”
My initial reaction was to toss it into the give-away box. Then I pulled it out. One section is titled "Everything that flourishes begins with one small seed." Another: "Success is more sweet spots than sticky notes." Published by Hallmark Books, a division of Hallmark Cards, the book contains lots more treacly content accompanied by cloying photos. And yet every section contains a good reminder: the first step can be the most difficult; success isn't a destination; outrageous goals can be beautiful.
More pertinent to legal ethics, I also found this napkin:
I pulled it out of a file for a seminar I taught several years ago on charging and collecting legal fees. (No, I wasn't surprised to find a napkin in my file. And it was clean, other than the ink.) I'm guessing I wrote a cryptic, impromptu hypo in which the lawyer would represent the client on a contract matter for a $25,000 cash flat fee.
Let's revisit the impromptu hypo. Assume a lawyer and a potential client meet over lunch and this napkin documents their lawyer-client agreement. Does this napkin comply with ER 1.5?
Ethics lawyers and educators talk about ER 1.5 requiring "fee agreements" but the rule doesn't. ER 1.5(b) requires that a lawyer communicate to the client, in writing, the scope of representation and the basis or rate of the lawyer's fee and expenses for which the client will be responsible. And if the fee is earned on receipt or nonrefundable, ER 1.5(d)(3) requires the lawyer to "simultaneously" advise the client in writing that the client "may nevertheless discharge the lawyer at any time and in that event may be entitled to a refund of all or part of the fee based upon the value of the representation...." None of this needs to be in a lengthy, typed document.
This particular napkin is, alas, too cryptic. Which contract is involved? The scope of representation is simply not adequately described. And tersely referencing "1.5(d)(3)" doesn't comply with the rule's direction that the lawyer tell the client about the client's rights. After all, according to the rule comment, ER 1.5(d)(3) requires these "certain minimum disclosures" so clients are not misled.
(By the way, ER 1.5(d)(3) and ER 1.5's comment 7 are unique to Arizona and not part of the ABA Model Rule 1.5. Keep that in mind, especially if you deal with lawyers from other jurisdictions or if you're part of a multijurisdiction law firm that likes to standardize its fee agreements.)
As long as we're talking "Fees on a Napkin," let's go way back to c. 1480 and Botticelli's The Birth of Venus:
My college humanities professor referred to this painting as Venus on a Half Shell. I've forgotten just about everything else from that course -- wait, I recall "naves" -- but I remembered this painting because of the irreverent title. (And I realized that I should keep my copy of Janson's "History of Art" as a reference book.)
I will leave you, therefore, with the concept of Fees on a Napkin. If you like, you could comply with ER 1.5 basics by writing on a napkin. Probably best if it's clean, but ER 1.5 doesn't require that.
