The opinion interprets rules 1.2, 1.5, and 1.16 of the Rules of Professional Conduct of the State Bar of California.
The opinion digest states: "A conversion clause is a term in any contingent fee agreement, in either a litigation or transactional matter, that provides that, upon termination of the relationship or refusal to settle on terms recommended by an attorney before the happening of the contingent event, the attorney’s fee may convert to an hourly rate or some other calculation other than the original contingent fee. Conversion clauses in contingent fee agreements are ethically prohibited primarily because their use improperly interferes with important client rights, including the client’s right to discharge the attorney or the client’s right to determine whether to settle. Conversion clauses violate an attorney’s ethical duties and may constitute an agreement to charge an unconscionable fee."
At its June 21, 2024, meeting, and in accordance with their procedures, COPRAC tentatively approved Proposed Formal Opinion Interim No. 20-0005 for a 60-day public comment distribution. This is the second public comment period for this opinion.