D.C. Proposes Advance Fees Rule And Comment Revisions

Since the District of Columbia Court of Appeals decided In re Mance in 2009, the court has issued a number of decisions sanctioning attorneys for mishandling advanced fees.

The Bar has now responded

December 15, 2022

The D.C. Bar Rules of Professional Conduct Review Committee is seeking public comment on a proposal to amend D.C. Rule of Professional Conduct 1.15(e) and related commentary. Comments are due by close of business on January 31, 2023.

Before submission to the Bar’s Board of Governors, the committee requests comment on the proposed amendments summarized below. The Board, in turn, may then recommend changes to the D.C. Court of Appeals, which promulgates the D.C. Rules.

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The Rules Review Committee proposes that Rule 1.15(e) be amended to expressly state: (1) that a flat or fixed fee is an advance fee subject to entrustment consistent with the District of Columbia Court of Appeals holding in In re Mance, 980 A.2d 1196 (D.C. Ct. App. 2009), as amended (Oct. 29, 2009); and (2) that informed consent to waive entrustment of advance fees pursuant to Rule 1.15(e) must be “confirmed in writing” consistent with the court’s holding in In re Ponds, 279 A.3d 357 (D.C. Ct. App. 2022).

Additionally, the committee proposes (1) the adoption of additional explanatory language in existing Comment [9] to Rule 1.15 regarding flat or fixed fees, and (2) that a new Comment [10] be adopted that clarifies the requirements for informed consent to waive entrustment of advance fees under Rule 1.15(e), including the five factors delineated by the Court of Appeals in In re Mance.

The committee’s draft report can be found at here.

Key point

To avoid the specter of future discipline for District lawyers unaware of disciplinary decisions of the D.C. Court of Appeals that, in effect, amend the text of the ethics rules, the subcommittee recommends swift revisions to Rule 1.15(e) and its Comments to codify the requirements of Rule 1.15 as interpreted by the Court of Appeals in In re Mance and In re Ponds. The subcommittee does not think it is realistic to expect that all lawyers read decisions of the Court of Appeals on disciplinary issues, but it is reasonable to expect lawyers to be familiar with the Rules of Professional Conduct and their Comments. Many discipline cases involve the misuse of client trust funds and clarifying the Rule to reflect Mance’s writing and five-factor requirements for informed consent will reduce such violations. Further, the proposed Rule amendment will help avoid the uncertainty that Mance/Ponds create by implying that whenever informed consent is required by the Rules, it must be in writing. Such an expansion of the requirement of informed consent would result in additional Rule violations by lawyers who are unaware of such a requirement and assume, based on the text of the Rules, that informed consent does not have to be in writing unless the Rule specifically requires it. The proposed Rule amendment avoids this risk by stating that Rule 1.15(e)’s writing requirement is limited to Rule 1.15

The ABA Model Rules require that "informed consent" be confirmed in writing in waiving a conflict of interest (see ABA Model Rule 1.7(a)(3); the District of Columbia does not.

Requiring a writing to show informed consent simply means that one need not take an attorney at her or his word that the required disclosures have been made.

That has real world consequences and does nothing but make enforcement more difficult in both a disciplinary and civil context.

 While they are at it, that Rule should be amended as well.

Whenever the D.C. Rules depart from the ABA Model Rules, it's a safe bet that it is to benefit lawyers and make it harder for clients. (Mike Frisch)