Can a California lawyer charge a former client for the lawyer's own time and out-of-pocket attorney's fees spent collecting unpaid fees from that former client?
LACBA Ethics Opinion 535: Charging a Former Client for Fee-Collection Time and Costs
Short answer: A California lawyer may charge a former client for out-of-pocket attorney's fees incurred in collecting unpaid fees only when a written, enforceable fee agreement includes a prevailing-party fee-shifting provision and the matter is not resolved through MFAA arbitration. The lawyer's own time spent collecting (lawyer pro per) is generally not recoverable.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the Los Angeles County Bar Association's view of California's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
The opinion addresses three scenarios: (1) a written fee agreement with an explicit prevailing-party fee clause; (2) a written fee agreement silent on collection costs; and (3) no enforceable written agreement, where the lawyer relies on quantum meruit.
The committee concludes that in scenario 1, the lawyer may recover both attorney's fees paid to outside counsel for collection and out-of-pocket collection costs, subject to four limitations: clarity of the agreement (ambiguities are construed against the lawyer), the unconscionability bar in California Rule of Professional Conduct 1.5, the prohibition on contracting around the Mandatory Fee Arbitration Act fee rules in Bus. & Prof. Code section 6203, and the Trope v. Katz (1995) 11 Cal.4th 274 rule that a lawyer litigating in propria persona cannot recover his or her own time as "attorney's fees" even when a contract provides for fee-shifting.
In scenarios 2 and 3, the committee concludes the lawyer may recover the principal fees under quantum meruit but may not recover the lawyer's own time or outside-counsel collection costs. The opinion grounds this on the American rule codified in Code of Civil Procedure section 1021 and on the policy reasoning of Chodos v. Borman (2014) 227 Cal.App.4th 76, which holds that lawyers who fail to comply with the writing requirements of sections 6147 and 6148 cannot recover more than they would have recovered had they complied.
In practice
Under this opinion, a fee agreement that complies with Bus. & Prof. Code section 6147 or 6148 and that includes a clear prevailing-party fee-shifting provision will support recovery of outside counsel's fees and out-of-pocket costs incurred in litigation to collect unpaid fees, but not the lawyer's own pro per time. The committee notes that fee-shifting is unavailable in any MFAA arbitration regardless of contract language.
Where no enforceable written fee agreement exists, the lawyer's claim is in quantum meruit, which the opinion treats as not extending to collection-stage attorney's fees or costs.
Common questions
Q: Can my engagement letter say my client owes me my hourly rate if I have to chase them for unpaid fees?
A: Under this opinion, only as to outside counsel's time. The opinion applies Trope v. Katz to conclude that a lawyer who litigates in pro per cannot recover the value of the lawyer's own time as attorney's fees, even where a written fee agreement provides for prevailing-party fees.
Q: If my engagement letter is silent on collection costs, can I still recover them in a fee suit?
A: No, under scenarios 2 and 3 of the opinion. The committee reads Code of Civil Procedure section 1021 and Chodos v. Borman to mean a lawyer's collection costs are treated as overhead absent an enforceable written agreement that says otherwise.
Q: Does the prevailing-party fee provision in my fee agreement apply if the client elects MFAA arbitration?
A: No. Per the opinion, Bus. & Prof. Code section 6203(c) precludes an award of attorney's fees or costs incurred in preparation for or in the course of MFAA arbitration, except for the filing fee. Contractual fee-shifting cannot override that statute, citing Dorit v. Noe (2020) 49 Cal.App.5th 458 and Soni v. Cartograph, Inc. (2023) 90 Cal.App.5th 1.
Q: I have no written fee agreement. Can I still sue the former client and recover my time spent on the collection action?
A: No under this opinion. The committee applies the American rule of Code of Civil Procedure section 1021 and concludes a quantum meruit recovery does not include the lawyer's collection-stage time or fees.
Background and rules framework
The opinion interprets California Rule of Professional Conduct 1.5, which prohibits unconscionable or illegal fees. It also reads the Mandatory Fee Arbitration Act (Bus. & Prof. Code sections 6200 et seq., especially section 6203 on fees and costs incurred in arbitration) and the writing requirements for contingent and non-contingent fee agreements in Bus. & Prof. Code sections 6147 and 6148. The framework also relies on the American rule codified in Code of Civil Procedure section 1021 and the Trope v. Katz rule on pro per attorney's fees.
Citations and references
Rules of Professional Conduct:
- California Rule of Professional Conduct 1.5 (unconscionable or illegal fees)
Statutes:
- Bus. & Prof. Code sections 6147, 6148 (writing requirements for contingent and non-contingent fee agreements)
- Bus. & Prof. Code sections 6200 et seq., especially 6203 (Mandatory Fee Arbitration Act; bar on recovery of fees incurred in MFAA arbitration)
- Civ. Code section 1670.5 (unconscionability)
- Code Civ. Proc. sections 128.7, 425.16, 1021 (American rule and sanctions)
Cases:
- Trope v. Katz, 11 Cal.4th 274 (Cal. 1995), pro per lawyer cannot recover own time as attorney's fees
- Chodos v. Borman, 227 Cal.App.4th 76 (2014), policy bar on lawyer recovering more than he would have under a compliant fee agreement
- Pech v. Morgan, 61 Cal.App.5th 841 (2021), enforceable fee agreement controls over lodestar reasonableness
- Huskinson & Brown v. Wolf, 32 Cal.4th 453 (Cal. 2004), quantum meruit principles
- Bushman v. State Bar, 11 Cal.3d 558 (Cal. 1974), unconscionable fee standard ("shocks the conscience")
- Dorit v. Noe, 49 Cal.App.5th 458 (2020), bar on arbitrator fee awards in MFAA proceedings
- Soni v. Cartograph, Inc., 90 Cal.App.5th 1 (2023), MFAA trial de novo fee rules
- M'Guinness v. Johnson, 243 Cal.App.4th 602 (2015), ambiguities construed against the lawyer
- Berk v. Twenty-Nine Palms Ranchos, Inc., 201 Cal.App.2d 625 (1962), enforceable fee contracts bind both parties
- Carlson, Collins, Gordon & Bold v. Banducci, 257 Cal.App.2d 212 (1967), interplay of express contract and reasonable value
- Herrscher v. State Bar, 4 Cal.2d 399 (Cal. 1934), discipline for excessive fees requires fraud or overreaching
- In re Kruger's Est., 130 Cal. 621 (Cal. 1900), no compensation where services harm the client
- Lockton v. O'Rourke, 184 Cal.App.4th 1051 (2010), limited exceptions to Trope rule
- Matter of Davis, 2013 WL 3293661 (Cal. Bar Ct. 2013), excessive-fee discipline standards
Other opinions cited:
- LACBA Opinion 521: conflicts when a fee dispute arises with a current client
See also
- LACBA Opinion 521: Conflicts of Interest When a Fee Dispute Arises
- No other sibling opinions yet indexed.
Source
- Landing page: https://lacba.org/?pg=ethics-opinions
- Original PDF: https://lacba.org/docDownload/2667053