Can an Illinois lawyer for an estate's executor agree that the executor will personally pay fees a probate court disallowed as excessive?

Plain-English summary

A lawyer is hired by a client serving as executor of a decedent's estate, on an hourly fee paid by the estate. The fee agreement says that to the extent the probate court disallows any part of the fee for any reason (rate too high, travel or waiting time disallowed, and so on), the client will pay the disallowed portion from the client's own funds. The lawyer petitions for $10,000, the court allows $7,500, the estate pays that, and the lawyer asks the client for the remaining $2,500. The lawyer asks whether such an agreement, making the client individually responsible for fees above the court-approved amount, is permissible.

The opinion first notes that under the Illinois Probate Act an estate attorney is entitled to reasonable compensation, and that fees are not always paid solely from the estate; a probate court may disallow fees for services tied to non-probate assets and equitably apportion them to individuals (Elias, Roe v. Estate of Farrell), so an executor can sometimes be required to pay fees personally. But the inquiry concerns an agreement to make the executor pay fees disallowed for any reason, including excessiveness. On that point the opinion concludes that fees disallowed as excessive (and therefore unreasonable) are not to be paid by anyone, so the described agreement violates the Rules.

The opinion holds Rule 1.5(a) bars a lawyer from making an agreement for, charging, or collecting an unreasonable fee, and that because both Rule 1.5 and the Probate Act exist to prevent overreaching and excessive legal fees, a fee a probate court deems excessive is likewise excessive under the Rules (citing the Minnesota Dvorak decision and out-of-state ethics opinions reaching the same result). It therefore concludes that an agreement requiring the client to pay legal fees disallowed by a probate court, regardless of the reason for the disallowance, violates Rule 1.5, and a lawyer may not contract to obtain fees beyond what the court found reasonable. The opinion limits its holding to excessive legal fees for probate work and does not address other situations, such as fee-shifting-statute litigation.

In practice

The opinion holds that under Rule 1.5(a) an Illinois estate attorney may not agree to or collect a fee a probate court disallowed as excessive, and that an agreement making the executor personally pay any court-disallowed portion (including a portion cut as excessive) violates Rule 1.5. It distinguishes the separate situation where a court equitably apportions fees for non-probate-asset work to individuals, which can lawfully require an executor to pay personally. The opinion expressly limits itself to excessive probate fees and does not reach fee-shifting-statute litigation.

Common questions

Q: Can an estate lawyer bill the executor for fees the probate court refused to allow?

A: Not when the court disallowed them as excessive. The opinion holds an excessive fee is unreasonable under Rule 1.5(a) and may not be paid by anyone, so it cannot be shifted to the executor.

Q: Is a fee agreement shifting all court-disallowed fees to the client valid?

A: No. The opinion concludes such an agreement violates Rule 1.5 because it is intended to provide fees beyond the amount the court found reasonable.

Q: Can an executor ever be required to pay the estate lawyer personally?

A: Yes, in a different situation. The opinion notes a probate court may equitably apportion fees for services on non-probate assets to the individuals who received them, which can require an executor to pay out of pocket.

Q: Does this opinion cover non-probate fee disputes?

A: No. The opinion limits its holding to excessive legal fees for probate work and does not address situations such as litigation governed by a fee-shifting statute.

Background and rules framework

The opinion interprets Illinois Rule 1.5(a) (reasonableness of fees; Model Rule 1.5) and its Comment 9 on following a prescribed statutory fee procedure, read together with the Illinois Probate Act (755 ILCS 5/27-2(a)) requirement of reasonable compensation and judicial review of estate-attorney fees. It relies on Illinois probate-fee case law and on persuasive out-of-state authority holding that a fee exceeding a court-authorized amount is unreasonable.

Citations and references

Rules of Professional Conduct:

• Illinois RPC 1.5(a) (reasonableness of fees) / MR 1.5

Statutes:

• Illinois Probate Act, 755 ILCS 5/27-2(a)

Cases:

• In re Estate of Elias, 408 Ill. App. 3d 301, 946 N.E.2d 1015 (1st Dist. 2011), fees not payable exclusively from the estate; equitable contribution
• Roe v. Estate of Farrell, 69 Ill. 2d 525, 372 N.E.2d 662 (1978), apportioning fees for non-probate-asset services
• In re Estate of Bitoy, 395 Ill. App. 3d 262, 917 N.E.2d 74 (1st Dist. 2009), retainer agreement irrelevant to reasonable-fee determination
• In re Dvorak, 554 N.W.2d 399 (Minn. 1996), fee exceeding court-authorized amount is unreasonable

Other opinions cited:

• Kentucky Bar Ass'n Ethics Op. KBA E-282 (1984)
• New York State Bar Ass'n Op. 251 (1972)

See also

• ISBA Ethics Op. 12-02: Percentage-of-Estate Fee for Estate Planning
• ISBA Ethics Op. 12-20: Contingent Fees for Recovering Unclaimed Property
• NY State Bar Op. 1004: A Counter-Party Attorney's Excessive Fee

Source

• Landing page: https://www.isba.org/ethics/opinions/1301