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Do the ethical rules require a discussion of value?

“A lawyer shall not make an agreement for, charge, or collect an unreasonable fee.” So begins Model Rule of Professional Conduct 1.5, promulgated by the American Bar Association and adopted by many states’ bar associations. That and the other model rules also elevate the client’s interest to the primary consideration for counsel in several respects, as outlined in Model Rule 1.2 (“[s]ubject to [limited exceptions], a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued”).

While the definition of an “unreasonable” fee includes a certain amount of flexibility in its standards, doesn’t it stand to reason that a representation that provides greater benefit to the client (as measured by the client) represents a preferable one? To the extent that the fee calibrates more closely with or to that benefit – so that a low-benefit representation deserves a lower fee, all other things being equal – isn’t it “more” ethical?

Value – the relationship between the fee and the benefit that the client realizes on account of the representation – contains an ethical component. At a minimum, don’t the ethical rules virtually mandate some discussion between client and counsel regarding the fee and its relationship to the client’s goals for the engagement and related issues?

Such a discussion should occur at the commencement of the representation. It should take into account the needs and expectations of both client and counsel. Unless it relates in some fashion to the client’s goals, however, it will result in a fee with little or no relationship with the purpose of their relationship and, to that extent, will raise ethical issues.

Steve LauerComment