Tuesday, July 17, 2007

"Soon-To-Be-Earned" Fees

The Commission on Practice of the Montana Supreme Court dismissed a series of ethics charges against an attorney, finding insufficient evidence of any violation. On the appeal of the Office Of Disciplinary Counsel, the Supreme Court reversed the dismissal and remanded for a sanction recommendation. The lawyer had represented an elderly client in a series of matters. In one matter, the attorney "transmogrified" a $125 hourly fee into a contingency fee, which paid him over $121,000 for a matter that the Bar's expert testified was a simple process that justified a fee of no more than $2,500. The fee was deemed excessive.

The attorney also had failed to escrow advanced fees. The court rejected the following claim: "[The attorney] seems to argue, and the Commission seems to accept, that a third category exists for soon-to-be-earned fees...[that] may be deposited directly into a lawyer's operating account." Fees are either earned or unearned, and the unearned variety must be escrowed. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2007/07/soon-to-be-earn.html

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