Vermont Bar Journal, Vol. 40, No. 2 VBA Journal, Summer Issue, Vol. 48, No. 2 | Page 41

www.vtbar.org ject to this proviso, consider using catchall language in a hybrid fee agreement, e.g., “Anything else in this Retainer Agreement notwithstanding, attorney shall not be en- titled to agree, charge or collect, nor shall client be obligated to pay, nor shall this fee agreement be interpreted to require such payment by client, of an unreasonable fee as set forth in and prohibited by Rule 1.5(a) of the Rules of Professional Conduct.” In conclusion, this author believes that much more attention and education are needed to familiarize practitioners with the implications of Rule 1.5 (a). The author would welcome continuing CLE courses on the application of Rule 1.5 (a), especial- ly courses taught by attorneys with experi- ence in disciplinary matters relating to the Rule. In an increasingly complex business world, more information and perhaps more explicit guidance is needed. ____________________ Stuart Revo is admitted to practice in Vermont and New York. He has over for- ty years’ experience in business transac- tions, contracts and corporate matters of all types, including international transac- tions in the Middle East, People’s Repub- lic of China, Africa and Europe. He was re- cently named to the China Advisory Board of Ascension Capital Group, Ltd. to assist a large American manufacturer with market development in PRC, and currently advises fintech and other start-ups in the New York City area. He resides in Manchester, Ver- mont. ____________________ In re Sinnott, 2004 VT 16, 845 A 2d 373 (2004). In re Sinnott 2004 VT 16, 845 A 2d 373 (2004) and See PRB 2005-4 at https://www.vtbar.org/ UserFiles/files/Webpages/Attorney%20Resourc- 1 2 THE VERMONT BAR JOURNAL • SUMMER 2017 es/aeopinions/Advisory%20Ethics%20Opinions/ Client%20Property/05-04.pdf 3 An interesting aspect of Sinnott is that al- though Rule 1.5 enumerates eight factors to be considered in determining the reasonableness of a fee, the Court saw no applicability of these fac- tors where the fee was unrelated to the actual work performed, and was instead assessed using a boilerplate agreement given to all clients. For the reader’s information, Rule 1.5 (a) continues: “The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular em- ployment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results ob- tained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation and ability of the lawyer or lawyers performing the ser- vices; and (8) whether the fee is fixed or contingent. 4 It should be noted that this decision was based on just one complaint, as the tip of the iceberg. Sinnot was later disbarred after enter- ing into a plea agreement for felony counts aris- ing from the misappropriation of over $500,000 in client funds. See In re Sinnot, 05-337 Vt Sup. Ct, August 25, 2005; http://caselaw.findlaw.com/ vt-supreme-court/1302776.html. 5 PRB 2005-4 at https://www.vtbar.org/User- Files/files/Webpages/Attorney%20Resources/ aeopinions/Advisory%20Ethics%20Opinions/Cli- ent%20Property/05-04.pdf 6 It is possible this author was unable to fair- ly assess the real-life impact of Rule 1.5 (a) on well- intentioned practitioners, without access to the record of Disciplinary Complaints which were dismissed or otherwise resulted in no published record. It figures that the published cases such as Sinnott and Fink (see infra) involve the most egregious of fact patterns under the Rule. Sin- nott involved a debt reduction mill where clients were charged the same amount regardless of work performed or outcome, and Fink involved a particularly vulnerable client with a serious dis- ability. 7 In Re Fink, 2011 VT 42 (PRB No. 2010-164). 8 In Fink Respondent was also charged with vio- lating Rule 1.5 (c) for failing to reduce his contin- gency fee agreement to writing. The author does not address this issue in this article. 9 In Re Fink, supra at P43-44. 10 N.Y. State Op. 697 (1997). 11 The Committee noted also that in New York any hybrid fee agreements must also comply with limits established by particular Court Rule, e.g., maximum fee schedules. 12 Arnall v. Superior Ct. (Liker), 2010 190 Cal. APP. 4th 360. 13 Several of the cases cited above, like Sinnott, involve advance fee payments implicating the Rules relating to when fees must be placed in trust, and when they must not be. The author has not addressed this issue for purposes of this ar- ticle, as it does not deal with the reasonableness of the fee but rather where an advance fee is de- posited. There appears to be lack of unanimity among the jurisdictions on this point. Suggestion 1. Unless the client is very so- phisticated, then the fee agreement should be simple, straightforward and uncreative. Using a hybrid fee agreement and getting creative with the contingencies, success fees, bonuses or otherwise would appear to be imprudent in such circumstances, and may ultimately raise a Rule 1.5 (a) concern. Suggestion 2. Upon the completion of an engagement (or the termination by a client), make it standard, best practice to review the fee paid or remaining due, the work performed, and the va lue provided to the client. Consider the eight factors cited in Footnote 1, and any others not specifi- cally enumerated. Make a memo to the file of your conclusions and reasoning. Regard- less of the fee agreement, if the fee is or would be unreasonable, reduce or refund (part of) it. Suggestion 3. Except in the traditional practice areas of real estate, certain fami- ly matters, and the exceptions widely rec- ognized by the courts, avoid the fixed, advance fee payment, characterized as “earned upon receipt” and non-refund- able. 13 While the Vermont Supreme Court has suggested that in some circumstances such fees and agreements are permitted, absent a tradition in the practice area, the cases are clear that fees rendered unrea- sonable when weighed against the services and value provided, will open the door to a Rule 1.5 (a) violation. Suggestion 4. Speaking anecdotally and without authority, readers are advised do their own research, and would be well ad- vised not to merely rely upon this sugges- tion, but to seek the confidential advice of Disciplinary Counsel or other counsel. Sub- 41