Can a lawyer bill the probate work from an estate hourly while handling or referring the related wrongful-death claim on a contingent or referral-fee basis?

Plain-English summary

The personal representative of an estate asked a lawyer to handle both the probate work and a wrongful-death/dram-shop action arising from the death. The lawyer asked about three fee arrangements: probate hourly plus the wrongful-death claim on contingency; probate hourly plus a referral of the wrongful-death matter for a percentage of the successor lawyer's fee; and probate hourly plus a referral, with the original lawyer presenting the distribution of proceeds to the probate court.

The Committee concluded a lawyer and client may limit the scope of a representation under MRPC 1.2(b), and that under R-10 the personal representative is the client in both the probate and wrongful-death matters, so the lawyer and personal representative may allocate the probate matter, the wrongful-death matter, the distribution, or any combination. The hourly probate fee is governed by the MRPC 1.5(a) reasonableness factors, and a referral fee is permitted under MRPC 1.5(e) only if the client is advised and does not object and the total fee is reasonable. It concluded the personal representative must agree to the referral and the total wrongful-death fee must be reasonable, with MCR 8.121 capping the total wrongful-death fee at one-third of the proceeds (anything beyond one-third is per se excessive).

The Committee concluded either lawyer may handle the presentation of the distribution if the agreements make clear where one lawyer's responsibility ends and the other's begins and there is no conflict, and that presenting the distribution is part of the wrongful-death representation, so the combined fee for the litigation and the distribution is also capped at one-third. Where two lawyers split that work, the total remains capped at one-third, and any split not specified in the retainer agreements is determined by quantum meruit under R-11 and the cited cases.

Currency note

This opinion was issued in 1992 and interprets the Michigan Rules of Professional Conduct as they then stood. The opinion's own headnote cautions that the analysis may be affected by Law Offices of Jeffrey Sherbow, PC v. Fieger & Fieger, PC, 507 Mich 272; 968 NW2d 367 (2021), that RI-214 addresses referral fees when acting as a fiduciary, and that RI-350 limits RI-10. MRPC 1.5 and MCR 8.121 have since been amended. Treat this page as historical context, not current guidance. Verify against current rules, the court rule, and those later authorities before relying on any specific fee cap, rule, or requirement mentioned here.

Common questions

Q: Can a lawyer charge hourly for probate but contingency for the related wrongful-death claim?

A: Yes. The opinion concluded the lawyer and personal representative may agree to bill the probate matter hourly and the wrongful-death claim on contingency, as long as the fees are reasonable and the client consents.

Q: Can the probate lawyer refer the wrongful-death case and take a referral fee?

A: Yes. The opinion concluded a referral fee is permitted under MRPC 1.5(e) if the client is advised and does not object and the total fee is reasonable, with the wrongful-death total capped at one-third under MCR 8.121.

Q: Does presenting the distribution of proceeds add to the fee?

A: No. The opinion concluded presenting the distribution is part of the wrongful-death representation, so the combined fee for the litigation and the distribution is still capped at one-third of the recovery.

Background and rules framework

The opinion interpreted MRPC 1.2(b) / Model Rule 1.2 (limiting the scope of representation), MRPC 1.5(a) / Model Rule 1.5 (reasonableness factors), and MRPC 1.5(e) / Model Rule 1.5 (fee division between lawyers in different firms), read with MCR 8.121's one-third cap on wrongful-death contingent fees. It relied on R-10's treatment of the personal representative as the client and R-11's quantum-meruit rule for unallocated splits.

Citations and references

Rules of Professional Conduct:

• MR 1.2 / MRPC 1.2(b) (limiting the objectives of representation)
• MR 1.5 / MRPC 1.5(a), (e) (reasonable fees; division between lawyers)

Court rules:

• MCR 8.121 (one-third cap on wrongful-death and personal injury contingent fees)

Cases:

• Ambrose v. Detroit Edison Co., 65 Mich App 484 (1975)
• Ecclestone, Moffet & Humphrey, PC v. Ogne Jinks, Albert & Stuart, PC, 177 Mich App 74 (1989)
• Morris v. City of Detroit, 189 Mich App 271 (1991)

Other opinions cited:

• R-10 (the personal representative as client); R-11 (quantum meruit for fee splits)

See also

• Mich Ethics Op. R-11: Contingent Fee on Appeal
• Mich Ethics Op. RI-73: Fee After Contingent Case

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=984&Type=6

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Note: For ethics advice regarding referral fees when acting as a fiduciary, see RI-214. Additionally, see RI-350 as it limits RI-10.

Please also note this analysis may be impacted by the Supreme Court's Opinion in L Offs of Jeffrey Sherbow, PC v Fieger & Fieger, PC, 507 Mich 272; 968 NW2d 367 (2021).

RI-114

January 6, 1992

SYLLABUS

A lawyer may handle a probate matter on an hourly basis and a wrongful death matter arising out of the same estate on a contingency basis, as long as the fees charged are reasonable and the client personal representative consents.

A lawyer may handle a probate matter on an hourly basis and refer the wrongful death matter to another firm for a referral fee of a percentage of the successor lawyer's fee.

A lawyer may handle a probate matter on an hourly basis, refer the wrongful death litigation matter to another firm, and handle the presentation of the distribution of any wrongful death proceeds to the probate court, as long as the client personal representative consents and the total fee charged for the wrongful death litigation plus the presentation of the distribution of the wrongful death claim proceeds does not exceed one-third of the recovery.

References: MRPC 1.2(b), 1.5(a), (e); MCR 8.121; R-10, R-11; Ambrose v. Detroit Edison Co, 65 Mich App 484 (1975); Ecclestone, Moffet & Humphrey, PC v. Ogne Jinks, Albert & Stuart, PC, 177 Mich App 74 (1989); Morris v. City of Detroit, 189 Mich App 271 (1991).

TEXT

A lawyer is contacted by the personal representative of an estate to handle the probate work and a wrongful death/dram shop action arising from the death. The lawyer asks whether there are any ethical problems in the following fee arrangement alternatives:

• The lawyer agrees to handle the probate matter on an hourly basis and to handle the wrongful death claim on a contingency fee basis.

• The lawyer accepts the probate matter on an hourly basis, and refers the wrongful death matter to another firm for a referral fee of a percentage of the successor lawyer's fee.

• The lawyer accepts the probate matter on an hourly basis, refers the wrongful death matter, and intends to handle the presentation of the distribution of any wrongful death proceeds to the probate court.

A lawyer and a client may agree to limit the objectives of a representation, MRPC 1.2(b). The scope of the lawyer's employment determines the propriety of charging a fee in a particular circumstance. In R-10 we determined that for purposes of ethics rules the personal representative is the "client" of the lawyer in the probate matter, and the personal representative is the "client" of the successor lawyer in the wrongful death matter. Thus the inquiring lawyer and the personal representative may agree that the lawyer will handle the probate matter, the wrongful death matter, the distribution of wrongful death proceeds, or any combination of those responsibilities.

The propriety of the hourly fee charged for the probate matter is determined by the factors in MRPC 1.5(a), which states:

"(a) A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee. A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee. 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 employment 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 obtained;

"(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 services; and

"(8) whether the fee is fixed or contingent."

The propriety of the probate lawyer's referral fee is determined under MRPC 1.5(e), which states:

"(e) A division of a fee between lawyers who are not in the same firm may be made only if:

"(1) the client is advised of and does not object to the participation of all the lawyers involved; and

"(2) the total fee is reasonable."

The personal representative must agree to the referral of the wrongful death case to the successor lawyer, and the total fee relating to the wrongful death matter must be reasonable. As long as these criteria are met, the referring lawyer and successor lawyer may agree to share the fee generated in the wrongful death action. MCR 8.121 limits the total fee in wrongful death actions to one-third of the proceeds; total fees in excess of one-third are per se excessive. See, MRPC 1.5(a).

Whether the distribution of the wrongful death proceeds is handled by the lawyer for the probate matter or the lawyer for the wrongful death matter is up to the client personal representative. Either lawyer may ethically handle the presentation of the distribution, as long as it is clear in the agreements with both lawyers where one's responsibility leaves off and the other's begins, and the lawyer responsible does not have conflicts of interest. See R-10 for a discussion of a lawyer's disagreement with the wrongful death proceeds distribution proposed by the client fiduciary personal representative, and the lawyer's opportunity or duty to withdraw.

The presentation of the wrongful death proceeds distribution to the court is part of the wrongful death claim representation, and thus the total fee for the wrongful death claim litigation and the presentation of the wrongful death proceeds is limited to one-third of the recovery pursuant to MCR 8.121(B). If one lawyer handles the wrongful death claim litigation, while another lawyer handles the presentation of the proceeds, the total fee is nonetheless limited to one-third of the recovery. The split between the lawyers, if not specified in the retainer agreements, is quantum meruit, R-11; Ambrose v. Detroit Edison Co, 65 Mich App 484 (1975); Ecclestone, Moffet & Humphrey, PC v. Ogne Jinks, Albert & Stuart, PC, 177 Mich App 74 (1989); Morris v. City of Detroit, 189 Mich App 271 (1991).