Can an Illinois estate planning lawyer charge a fee based solely on a percentage of the value of the client's estate?

Plain-English summary

An attorney handling a decedent's probate estate learned that the lawyer who had done the decedent's estate planning charged a fee based solely on a percentage of the estate's assets, a figure far exceeding what hourly billing for the same work would have produced. The inquiry asked whether charging such a percentage fee is proper.

The opinion concludes it is not. It relies on case law (including the Illinois Fourth District's decision in In re Estate of Weeks, along with Estate of Painter and In re Estate of Platt) holding that a probate fee based solely on a percentage of estate value does not satisfy the requirement that a fee be reasonable. The size of the estate is one factor that may be considered, but it cannot be the sole controlling factor.

Applying Illinois Rule 1.5(a), which lists eight factors bearing on reasonableness (time and labor, novelty and difficulty, the customary local fee, the amount involved and results obtained, the nature and length of the relationship, and the lawyer's experience and ability, among others), the opinion holds that a fee set solely on a percentage of estate size, without regard to those factors, is unreasonable. The opinion declines to adopt Weeks's suggestion that time spent is always the most important factor; instead it stresses that all the Rule 1.5(a) factors must be weighed case by case.

The opinion notes that the cited cases involved probate fees rather than estate-planning fees, but concludes the distinction does not help the estate planner: if a probate attorney, whose work may involve more uncertainty, cannot charge on a percentage basis, neither can an estate planner.

In practice

The opinion holds that, under Rule 1.5(a), an estate planning lawyer may not set a fee solely as a percentage of the estate's value. Reasonableness must be assessed against the full set of Rule 1.5(a) factors weighed case by case; estate size may be one consideration but not the only one. The opinion does not bar considering estate value at all, only basing the fee solely on it.

Common questions

Q: Can an Illinois estate planning lawyer charge a flat percentage of the estate?

A: No, not as the sole basis. The opinion concludes that a fee calculated solely on a percentage of estate value, without regard to time and the other Rule 1.5(a) factors, is unreasonable and improper.

Q: Can estate size be considered at all in setting the fee?

A: Yes. The opinion treats the amount involved as one of the Rule 1.5(a) factors; what it rejects is using estate size as the sole controlling factor to the exclusion of time spent and the other considerations.

Q: Is time spent the most important factor?

A: The opinion declines to say so categorically. It disagrees with the implication in In re Estate of Weeks that time is always the most important factor, holding instead that all Rule 1.5(a) factors must be given proper weight case by case.

Background and rules framework

The opinion interprets Illinois Rule of Professional Conduct 1.5(a) (Model Rule 1.5), which requires that a lawyer's fee be reasonable and lists the factors bearing on reasonableness. The opinion reads Rule 1.5(a) together with Illinois probate-fee case law applying the same reasonableness standard, treating the case law on probate fees as persuasive for estate-planning fees.

Citations and references

Rules of Professional Conduct:

• Illinois RPC 1.5(a) (reasonable fees) / MR 1.5

Cases:

• In re Estate of Weeks, 409 Ill. App. 3d 1101, 950 N.E.2d 280 (4th Dist. 2011), percentage probate fee not reasonable
• Estate of Painter, 567 P.2d 820 (Colo. 1977), percentage probate fee improper
• In re Estate of Platt, 586 So. 2d 328 (Fla. 1991), fee may not be set solely by percentage of estate value
• Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975), reliance on fee schedules improper

See also

• ISBA Ethics Op. 13-01: Collecting a Fee in Excess of an Amount Allowed by Court Order
• ISBA Ethics Op. 12-20: Contingent Fee for Discovering and Collecting Assets
• TX Ethics Op. 701: Subscription Legal Fees, Trust, and Refund

Source

• Landing page: https://www.isba.org/ethics/opinions/1202