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ABA Issues New Opinion on Changing Fees During Representation

September 8, 2011 | Posted in : Contingency Fees / POF, Ethics & Professional Responsibility, Fee Agreement, Fee Dispute, Hourly Rates

U.S. lawyers are free to modify existing fees during representation, but they must be reasonable as well as communicated and accepted by the client.  A new opinion, ABA Opinion 11-458 (pdf.), provides guidance on changes in fees.

“Periodic, incremental increases in a lawyer’s regular hourly billing rates are generally permissible if such practice is communicated clearly to and accepted by the client at the commencement of the client-lawyer relationship and any periodic increases are reasonable under the circumstances,” the opinion states.  “Modifications sought by the lawyer that change the basic nature of a fee arrangement or significantly increase the lawyer’s compensation absent an unanticipated change in circumstances ordinarily will be unreasonable,”

Fee arrangements between clients and lawyers will sometimes need to change, and contracts generally outline these rules.  However, even when clients have given consent, any modifications to the fee will be scrutinized once the client-lawyer relationship has developed and the client is being represented, the opinion said.  As a result, fee changes will have to be justified and explained to the client.

The opinion notes that, though the only one specific reference in the Model Rules of Professional Conduct regarding changes to a fee arrangement is in Rule 1.5(b), which states that: “Any changes in the basis or rate of the fee and expenses shall also be communicated to the client,” it does not mean the lawyer is only obligated to provide notice.