Writing requirement: As of Jan. 1, written fee agreements will be required in most cases

On Oct. 24, 2012, the Massachusetts Supreme Judicial Court issued an order respecting amendments to Court Rule 3:07. The order will amend those Rules of Professional Conduct at Rule 1.5 and at Rule 6.5. This is the second recent amendment of Rule 1.5; here's the first.

The revised rules have an effective date of Jan. 1, 2013, and require that fee agreements, with narrow exceptions, be reduced to writing; or, as the text of the new Rule 1.5 reads: 'the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client in writing.' This is a significant change from the prior version of the rule, which required that contingent fee agreements be in writing, while only evincing a preference that other fee agreements be committed to writing, also.

There are some further, relevant matters to be aware of:

  • The revised Rule 1.5 requires that the fee agreement be 'communicated in writing to the client before or in a reasonable time after commencing the representation.' Though, the new Comment 2 to the rule adds that: 'Ordinarily, the lawyer should send the written fee statement to the client before any substantial services are rendered.'
  • The exceptions to the new Rule 1.5 are as follows, for: (1) a 'single-session' legal consultation; (2) 'when the lawyer reasonably expects the total fee to be charged to the client to be less than $500';, (3) services provided 'under the auspices of a program sponsored by a non-profit organization or court' (nonprofit and court-annexed limited legal services programs) -- the related revision to Rule 6.5, adding a new section (1)(a); and, (4) 'when the lawyer will charge a regularly represented client at the same basis or rate' -- though, any changes to the basis or rate must be communicated to the client (even an existing client) in writing, such that modification of pricing terms triggers the creation of a new/revised written fee agreement.
  • Comment 2 to the revised Rule 1.5 indicates that 'Furnishing the client with a simple memorandum or a copy of the lawyer's customary fee schedule is sufficient if the scope of the representation and the basis or rate of the fee is set forth.' Best practice, however, would suggest, instead of a bare memorandum of terms, that the attorney acquire a fully executed fee agreement, signed by the attorney/attorneys and client/clients. Each party should initial and date all pages of the fee agreement that do not contain signature lines.
  • Fees and expenses must be outlined in the written fee agreement.
  • Although there is an exception in place for single session consultations and for engagements in which the fee will not meet or exceed $500, even in those constructs, 'the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client,' per the new Comment 2 to Rule 1.5.

For more on the rules changes, you can read the Board of Bar Overseers' announcement here. Bar Counsel Constance Vecchione has elaborated on the revised rules at this article, accessible via the BBO/Office of Bar Counsel's ethics articles repository. Among other things, Vecchione addresses the history of the rule's reformation, expands upon the importance of acquiring a fully executed fee agreement and offers some tips for drafting scope provisions and about how to effectively relay charges and expenses.

Tip courtesy of Jared Correia, Law Office Management Assistance Program.

Published December 6, 2012


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