34 nwLawyer | SEP 2013
by Mark J. Fucile
In recent years, the Rules of Professional Conduct have merged as a central focus of many fee disputes. The RPcs have come to play a key role
in fee disputes because they play an
equally key role in fee agreements. The
Washington State Supreme court, in
Valley/50th Ave., L.L.C. v. Stewart (159
Wn.2d 736, 743, 153 P.3d 186 (2007)),
summarized this essential point: “
Attorney fee agreements that violate the
RPcs are against public policy and unenforceable.” In this column, we’ll look
at the developing role of the RPcs in fee
disputes, the practical consequences to
enforceability of fee agreements that
violate the RPcs, and practical steps to
lower this risk.
Before we do, however, three qualifiers are in order.
First, although our focus will be on
enforceability in the civil context, fee
agreements that violate the RPcs expose lawyers to regulatory discipline as
well. In re Vanderbeek (153 Wn.2d 64,
85, 101 P.3d 88 (2004)) and In re Marshall (160 Wn.2d 317, 335, 157 P.3d 859
(2007)), are examples of lawyers disciplined, in relevant part, for unethical
fee agreements and related collection
efforts under those agreements.
Second, substantive contract law
and fiduciary principles also play essential roles in the enforceability of fee
agreements — particularly if the fee
agreement involved has been modified
unilaterally by the lawyer. Ward v. Richards & Rossano, Inc., P.S. ( 51 Wn. App.
423, 754 P.2d 120 (1988)) remains a
seminal decision on both points.
Third, fee agreements are subject to
RPc 1. 5(a)’s basic standard of reason-
ableness both when written and at col-
lection. Therefore, even a fee agreement
that complied with the RPcs when writ-
ten may have become unreasonable at
collection. In Holmes v. Loveless (122
Wn. App. 470, 94 P.3d 338 (2004)), for
example, the court of Appeals found
that a fee arrangement had become
unreasonable over time and refused to
authorize its continued enforcement.
The Supreme court’s broad statement
from Valley/50th Avenue, quoted at
the outset, has been applied to fee
agreements of all stripes. Valley/50th
Avenue, for example, involved a modification of an existing fee agreement
to add security for payment of fees already accrued. In making its point, the
Supreme court in Valley/50th Avenue
cited hourly fee (Simburg, Ketter, Shep-pard & Purdy, LLP v. Olshan, 109 Wn.
App. 436, 988 P.2d 467 (1999), amend-
ed, 33 P.3d 742 (2000)), flat fee (Cotton
v. Kronenberg, 111 Wn. App. 258, 44
P.3d 878 (2002)) and contingent fee
(Belli v. Shaw, 98 Wn.2d 569, 657 P.2d
315 (1983)) cases.
The RPcs’ role as a touchstone for
the enforceability of fee agreements
should not be surprising because it
weaves together three long-standing
threads of Washington contract law.
First, contracts are subject to applicable statutory law. In Dopps v. Alderman ( 12 Wn.2d 268, 273-74, 121 P.2d
388 (1942)), the Washington State Supreme court quoted the United States
Supreme court on this unremarkable
“Laws which subsist at the time and
place of the making of a contract,
and where it is to be performed,
The RPcs and