Can a lawyer charge a contingent fee, a percentage of what is collected, to enforce a court order for past-due child support?

Plain-English summary

A custodial parent (A) sought to enforce a court order for child support against the other parent (B), who was in arrears in a definite sum. The inquiry asked whether Lawyer L could represent A in a child-support enforcement action on a fee contract specifying an agreed percentage of the money collected.

The opinion concluded that the proposed arrangement is a contingent fee payable on collection of specific past-due payments. Rule 2.6(a) prohibits an illegal or clearly excessive fee, judged by numerous factors. Contingent fees are explicitly prohibited only in criminal cases (Rule 2.6(c)), and North Carolina also appears to prohibit contingent fees made contingent on procuring a divorce or on the amount of alimony or property awarded (Thompson v. Thompson). Many jurisdictions void contingent fees in domestic-relations actions tied to the amount of alimony, child support, or property awarded; but most that have addressed contingent fees for collecting specific past-due support owed under contract or prior order have held such arrangements do not violate that public policy. A lawyer is therefore not necessarily prohibited from a contingent fee to collect liquidated past-due support, but must keep in mind the bar on excessive fees and the factors in Rule 2.6(b). If collection appears relatively simple and assured (for example, through known assets or garnishment), a contingent fee may be excessive given the time, labor, difficulty, and skill involved, and the lawyer may need a significantly smaller percentage than in speculative cases like personal injury. Where the client cannot currently pay, the lawyer might instead defer payment with an interest charge, or use a substantially smaller contingent percentage.

Currency note

This opinion was issued in 1986, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. The provision it applies (Rule 2.6 on fees, including the bar on excessive fees and the limits on contingent fees) has since been renumbered and revised (the corresponding Model Rule is 1.5). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer take a contingent fee to collect past-due child support?

A: Yes, in principle. The opinion concluded a lawyer is not automatically prohibited from a contingent fee to collect specific, liquidated past-due support, subject to the excessive-fee limits.

Q: When would such a contingent fee be improper?

A: Where it produces an excessive fee. The opinion concluded that if collection is simple or assured (for example, via known assets or garnishment), the usual contingent percentage may be excessive under Rule 2.6.

Q: Are contingent fees allowed in other domestic-relations matters?

A: Not when tied to a divorce or the amount of alimony or property awarded. The opinion concluded such contingent fees appear prohibited in North Carolina under Thompson v. Thompson, distinguishing collection of already-fixed past-due support.

Background and rules framework

The opinion applied North Carolina Rule 2.6 on fees (corresponding to Model Rule 1.5), including the prohibition on excessive fees, the multi-factor reasonableness test, and the limits on contingent fees. The analysis turned on distinguishing collection of a fixed, past-due support amount from contingent fees tied to the outcome or amount of a divorce or support award, and on whether the usual percentage would be excessive given how easily the debt could be collected.

Citations and references

Rules of Professional Conduct:

• North Carolina Rule 2.6(a), (b), (c) (fees; excessive fees; contingent fees)
• MR 1.5 (fees)

Cases:

• Thompson v. Thompson, 70 N.C. App. 147, 319 S.E.2d 315 (1984), rev. on other grounds, 313 N.C. 313, 328 S.E.2d 288 (1985), on contingent fees in divorce matters

Other opinions cited:

• Florida, Birmingham Bar Association, and New York County Bar opinions on contingent fees for collecting past-due support (via the Lawyers' Manual on Professional Conduct)

See also

• NC Ethics Op. RPC 35: contingent fees for the collection of med-pay
• NC Ethics Op. RPC 7: using a collection agency for fees

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-2/

Original opinion text

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

Inquiry:

A and B were formerly married and are the parents of C. A has custody of C pursuant to court order. B is required by court order to make specific child support payments, but B is currently in arrears in his child support payments in a definite sum.

May Lawyer L ethically represent A in a child support enforcement action against B upon a fee contract specifying an agreed percentage of such monies collected?

Opinion:

Lawyer L's proposal for a fee arrangement with A contemplates a contingent fee payable upon collection of specific amounts of past due child support payments. Rule 2.6(a) prohibits an illegal fee arrangement or collection of an illegal or clearly excessive fee. Numerous factors are to be considered in determining whether a fee is excessive. Contingent fees are only explicitly prohibited in criminal cases. Rule 2.6(c). Contingent fees also appear to be prohibited in North Carolina, as a result of a decision of the North Carolina Court of Appeals, if the contract makes the fee contingent upon procuring a divorce or upon the amount of alimony and/or property awarded in a divorce case.Thompson v. Thompson, 70 N.C. App. 147, 319 S.E.2d 315 (1984), rev. on other grounds, 313 N.C. 313, 328 S.E.2d 288 (1985).

Many jurisdictions, like North Carolina, hold contingent fee arrangements in domestic relations actions void as against public policy where the fee is contingent upon procuring a divorce or the amount of alimony or child support payments, or property settlement in lieu thereof, to be awarded.See Speiser, Attorneys' Fees §2:6 (1973). However, most jurisdictions which have considered the issue of contingent fees for attorney efforts to collect specific amounts of past due support payments owed pursuant to contract or prior court order have concluded that such arrangements do not violate the public policy prohibiting contingent fee contracts in divorce actions based upon the amount of alimony or child support to be awarded or on a property settlement in lieu thereof. Bar organizations reaching these conclusions include Florida (See Lawyers' Manual on Professional Conduct 801:2501), the Birmingham Bar Association (See Lawyers' Manual on Professional Conduct (801:1103), and New York County Bar Organization (See Lawyers' Manual on Professional Conduct 280).

A lawyer is not necessarily prohibited from entering into a contingent fee arrangement for collection of liquidated amounts of past due support. However, the lawyer must always keep in mind the prohibition against entering into an agreement for, charging, or collecting an excessive fee and the factors listed in Rule 2.6(b). If, for example, collection of the past due child support appears to be relatively simple and assured because of known assets or garnishment procedures available to lawyer L's client, a contingent fee may be inappropriate as resulting in an excessive fee in view of the time and labor involved, novelty and difficulty or lack thereof of the questions involved, skill necessary to perform the legal service properly, likelihood or lack thereof that acceptance of the employment will preclude other employment by the attorney, fee normally charged for similar circumstances, and other factors. The attorney may need to charge a significantly smaller percentage than in cases, such as personal injury actions, where any recovery at all or the amount likely to be recovered may be highly speculative. Where a client is currently unable to pay an attorney for services in collecting child support or alimony payments, which have been reduced to a sum certain and are currently in arrears, an attorney may wish to enter into an agreement by which the client simply defers payment until a later date with an interest charge where the procedures involved are neither novel nor unduly difficult and where known assets or attachment or garnishment procedures are apparently available for collection on the past due support payments. Alternatively, a contingent fee contract might provide for a substantially smaller percentage of the amount collected than in other types of contingency cases.

Lawyer L is not automatically prohibited from entering into a contingent fee arrangement with A in a child support enforcement action against B in the action for collection of specific past due child support payments, but may wish to consider whether a contingent fee arrangement will result in or may result in an excessive fee, at least if the agreement is for the usual percentage in cases handled on a contingent fee basis where success or the amount to be obtained may be far more speculative.