You have asked this Committee for an opinion as to the propriety of a fee arrangement for representation of a domestic relations client. You ask whether an attorney who anticipated payment of his/her fee from an equitable distribution of marital assets has arranged for a de facto contingent fee, for if so, such would violate Rule 1.5(d)(1) of the Rules of Professional Conduct. Specifically, the fee would be based on an hourly rate, due and owing regardless of the end result, but by agreement payment of the fee is deferred until the equitable distribution claim is concluded.
It is the opinion of the Committee that under the facts and circumstances as you have recited them, such a fee arrangement is permissible as long as its payment is not conditional upon the granting of a divorce, an award of property, or other relief sought by the client in a domestic relations proceeding.
Rule 1.5(d)(1) states that an attorney cannot agree to charge or collect a fee where payment [emphasis added] is contingent upon securing a divorce, or upon the amount of alimony or support [awarded].
The concern you have raised, that of representing dependent spouses in domestic relations cases, does not involve an attorney's fees contingent upon the outcome of a case, but rather, centers upon an attorney's ability to collect that which he/she has billed for his/her services. Your inquiry indicated that that attorney's fee would be billed at an hourly rate at the attorney's customary charge. Even if not paid at the time services are rendered, the obligation of the dependent spouse to pay his/her attorney cannot be extinguished by the result of the litigation. Accordingly, it is not a contingent fee.
There is nothing in the Rules of Professional Conduct which requires a client to advance a retainer against which an attorney's fee will be charge on an hourly rate basis. There is nothing which requires payment/collection of a fee contemporaneous with the time that such fee is charge. In short, an attorney may agree to defer collection of his/her fee charged on an hourly rate basis without compromising his/her right to a fee for legal services performed.
Absent a written agreement which would condition the client's obligation to pay a fee upon the result, said obligation to pay for legal services may be one which is satisfied from any source of funds available to the client.
In sum, an attorney is permitted to enter into an arrangement for payment of attorney fees on an hourly rate basis, and is permitted to defer collection of those fees without violating Rule 1.5(d)(1) of the Rules of Professional Conduct.
The Philadelphia Bar Association's Professional Guidance Committee provides, upon request, advice for lawyers facing or anticipating facing ethical dilemmas. Advice is based on the consideration of the facts of the particular inquirer's situation and the Rules of Professional Conduct as promulgated by the Supreme Court of Pennsylvania. The Committee's opinions are advisory only and are based upon the facts set forth. The opinions are not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. They carry only such weight as an appropriate reviewing authority may choose to give it.