Proposed Formal Opinion Interim No. 20-0003 considers:
The opinion interprets rules 1.5, 1.15, and 1.16 of the Rules of Professional Conduct and Business and Professions Code section 6148.
The opinion digest states: An attorney may agree to charge a flat fee for legal services but should clearly state what services are covered by the fee and when the fee or portion thereof is earned. If the flat fee is paid in advance of the services being rendered, the attorney may deposit the fee into the lawyer’s operating account if compliance with rule 1.15(b) is met. Unearned funds, even if deposited into the operating account, are subject to being refunded if the representation is terminated and any of the services for which the fee has been paid are not completed. If a flat fee is renegotiated “midstream,” such renegotiation is subject to ethical scrutiny for fairness and reasonableness.
At its March 1, 2024, meeting and in accordance with its procedures, the State Bar Standing Committee on Professional Responsibility and Conduct tentatively approved Proposed Formal Opinion Interim No. 20-0003 for a 90-day public comment distribution.