NW Lawyer - June 2014

that of the Indiana Supreme Court holding that “[a] corollary of the client’s right to discharge a lawyer is that a contract between the client and the lawyer that unduly impairs that right is invalid.” 15 Such analyses essentially take the position that a client’s inviolable right to discharge the lawyer is not much of a right at all if it would be too costly to assert. Like WSBA Advisory Opinion 1864, courts in Indiana, Georgia, and Colorado have strongly suggested that regardless of the fee agreement, a client who fires her attorney, at whatever stage of the representation, for whatever reason, is entitled to a refund based in quantum meruit.

In our opinion, courts are unaware that clients can manipulate these precepts in order to deprive attorneys of fair compensation for work done or risk assumed. 16 For example, a 2009 Washington case almost certainly involved a situation where the client “deliberately fired her attorney to maximize her share of the generous verdict.” 17 Washington attorneys can be somewhat heartened by the fact that the court indicated that, in instances of egregiously unconscionable client behavior, more than an hour-based quantum meruit attorney’s fee is permissible, even if the client discharges the attorney. 18

What’s the Liability?

How should an attorney protect herself for the eventuality that a client will come knocking, wanting reimbursement in a partially completed flat-rate matter where the fee has been paid pursuant to an agreement that complies with RPC 1. 5(f)( 2)? In many years of handling trademark applications on a flat fee basis, attorney Mark Jordan of Invicta Law Group has never had a dispute with a client about a partially earned flat fee. In the event the full representation is not completed, “I sit down with the client and explain what portion of the fee I’ve earned based on the work performed,” Mark explains. Indeed, flat fee matters generally tend to represent relatively smaller fees, and in a majority of scenarios the attorney will likely have the cash on hand to return some or all of a single flat fee.

What happens, though, if all of an attorney’s flat fee clients come knocking? What if the attorney — through no fault of her own — is unable to continue her work due to disability or family crisis?

What if she has an entire caseload of
partially completed flat-fee cases and
can complete none of them?

PEZ® Dispenser
Accounting

How does an attorney track her level of financial exposure for collected flat fees that she may need to partially reimburse?

Experts recommend that law-
yers track time on all flat-rate
matters just as they would
with traditional billing. As Roberts points
out, this also gives the lawyer important
data to assess the value she is investing
in flat-rate matters, and she may want to
adjust fees accordingly. 19 This approach
offers a means to ensure that the attorney
always has cash on hand to reimburse a
client for a partially-earned, as defined by
RPC 1. 5(f)( 2), fee. The attorney deposits
each flat fee into her operating account,
but allows herself access only to the por-
tion of the fee that she has earned at a

Perkins Coie partners Stewart Landefeld and Eric DeJong have co-authored Volume I of Washington Business Entities: Law and Forms, Second Edition. This indispensable treatise is packed with critical information on creating, maintaining and dissolving Washington State business entities, including corresponding forms.