Can a lawyer charge a contingent fee to collect on a divorce judgment after the divorce is final?

Plain-English summary

A divorce judgment required the husband to pay a $500,000 lump sum over twenty years and to maintain a life insurance policy until paid in full. After his business failed he stopped paying and let the policy lapse. The former wife retained lawyers on a contingent fee of 50% of all amounts collected, including insurance proceeds. The lawyers won the post-judgment litigation and appeal (the obligation was held non-modifiable), defeated dischargeability in his bankruptcy (the obligation was "in the nature of alimony"), and negotiated a settlement. The question was whether the contingent fee agreement was improper.

The opinion analyzed the question under Rule 1.5. It noted that Rule 1.5(c) requires contingent fee agreements to be in writing and to state the method of calculating the fee and the treatment of expenses, and that Rule 1.5(a) requires every fee to be reasonable based on eight factors. It cautioned, citing In re Gerard, that where the factors suggest a fee is unreasonable, a lawyer should use common sense to reduce or renegotiate it after consulting the client, but it expressly declined to opine on whether the 50% fee here was reasonable.

On the central question, the opinion read Rule 1.5(d)(1), which bars contingent fees in domestic relations matters tied to securing a dissolution or to the amount of maintenance, support, or property settlement, but contains an Illinois-specific proviso that the prohibition does not extend to representation in matters subsequent to final judgments. Following Fletcher v. Fletcher, the opinion concluded that contingent fees are permitted for legal matters that follow the final judgment, and that the collection, post-judgment, appeal, and bankruptcy work here fell within that exception. The opinion noted that it declined to follow two contrary appellate decisions (Licciardi v. Collins and In re Marriage of Malec).

Currency note

This opinion was issued in 1996, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in January 2010 as generally consistent with the 2010 Rules (referring to Rule 1.5), while noting the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can a lawyer charge a contingent fee in a divorce-related matter?

A: The opinion concluded that Rule 1.5(d)(1) bars contingent fees in domestic relations matters only through the final judgment. For matters subsequent to the final judgment, such as collection or enforcement, a contingent fee is permitted if written and reasonable.

Q: What makes such a fee agreement valid?

A: The opinion concluded the agreement must be in writing under Rule 1.5(c), state the method of calculating the fee and how expenses are treated, and be reasonable under the eight factors of Rule 1.5(a).

Q: Did the opinion bless the 50% fee?

A: No. The opinion expressly declined to opine on whether the 50% contingent fee in this case was reasonable, and cautioned (citing In re Gerard) that lawyers should reduce or renegotiate a fee the reasonableness factors indicate is excessive.

Background and rules framework

The opinion interpreted Rule 1.5 (fees), focusing on Rule 1.5(a) (reasonableness and its eight factors), Rule 1.5(c) (written contingent fee agreements), and Rule 1.5(d)(1) (the bar on contingent domestic-relations fees and its Illinois proviso for post-judgment matters; Model Rule 1.5). It followed Illinois case law construing that proviso.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 (fees) / Illinois Rule 1.5(a), (c), (d)(1)

Cases:

• In re Gerard, 132 Ill. 2d 507 (1989), excessive contingent fee
• Fletcher v. Fletcher, 227 Ill. App. 3d 194 (4th Dist. 1992), contingent fees for post-judgment collection enforceable
• Licciardi v. Collins, 180 Ill. App. 3d 1051 (1st Dist. 1989), declined to follow
• In re Marriage of Malec, 205 Ill. App. 3d 273 (1st Dist. 1990), declined to follow

See also

• ISBA Ethics Op. 12-20: Contingent Fee for Discovering and Collecting Assets
• CA COPRAC Op. 1994-135: Calculating Attorney Fees Under a Contingent Agreement
• ABA Formal Op. 487: Fee Division With a Client's Prior Counsel
• RI EAP Op. 2006-03: Contingent Fee Proper in Post-Divorce Contract Dispute Over Stock Option Value, Not if the Divorce Itself Is Reopened

Source

• Landing page: https://www.isba.org/ethics/opinions/9516