Can a North Carolina lawyer require a client to sign a confession of judgment to secure the fee before doing any legal work?

Plain-English summary

The opinion addressed a lawyer who charged flat fees for certain criminal and domestic matters and required the client, before any work was done, to sign a confession of judgment under G.S. 1A-1, Rule 68, sometimes filled in with the quoted fee and sometimes left blank. In the example given, the lawyer quoted a $2,000 flat fee for a felony defense and obtained the signed confession up front; after one minor court appearance the charges were dismissed by the district attorney, the client paid nothing, the lawyer filed the confession of judgment, and the client disputed the amount.

The opinion concluded that this arrangement was unethical. A lawyer may not obtain a confession of judgment from a client before rendering services. The opinion noted that CPR 250, decided under the superseded Code of Professional Responsibility, had allowed a confession of judgment to secure a fee, and it overruled CPR 250 to the extent inconsistent. The pre-service confession violated Rule 2.6(e) because it let the lawyer bypass the State Bar's mandatory fee-arbitration program: with a confession in hand the lawyer need not file suit, has no duty to advise the client of the arbitration program, and has no motivation to arbitrate. The opinion further found the $2,000 fee excessive under Rule 2.6(a) given the minimal services performed, citing the Rule 2.6(b) reasonableness factors and RPC 158's holding that a lawyer must refund any clearly excessive portion of a fee. The result was the same whether the confession was signed in blank or filled in. By contrast, where a client does not dispute a fee already earned but cannot pay it presently, the opinion concluded the lawyer may obtain a confession of judgment, provided the lawyer explains it, because that does not undermine the fee-arbitration program.

Currency note

This opinion was issued in 1995, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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 North Carolina lawyer take a confession of judgment for the fee before starting the work?

A: No. The opinion concluded that obtaining a confession of judgment before rendering services violates Rule 2.6 and overruled the contrary prior opinion, CPR 250.

Q: Why is a pre-service confession of judgment improper?

A: It evades the mandatory fee-arbitration program and can be used to collect an excessive fee. The opinion reasoned that with a confession in hand the lawyer need not file suit, owes no duty to advise the client of fee arbitration under Rule 2.6(e), and has no incentive to arbitrate.

Q: Does it matter whether the confession was signed in blank?

A: No. The opinion concluded the answer was the same whether the confession recited the fee or was signed in blank and later filled in.

Q: Can a lawyer ever obtain a confession of judgment from a client?

A: Yes, for a fee already earned that the client does not dispute but cannot currently pay, provided the lawyer explains the confession of judgment. The opinion concluded this does not undermine the fee-arbitration program.

Background and rules framework

The opinion applied North Carolina's then-current Rule 2.6, the fee provision corresponding to Model Rule 1.5. Rule 2.6(a) prohibits charging or collecting an excessive fee, Rule 2.6(b) lists the reasonableness factors including time and labor required, and Rule 2.6(e) requires a lawyer to advise the client of the State Bar's fee-arbitration program and participate in nonbinding arbitration before initiating proceedings to collect a disputed fee. The opinion relied on RPC 158 for the duty to refund any clearly excessive portion of a fee.

Citations and references

Rules of Professional Conduct:

• MR 1.5 (fees; reasonableness)
• North Carolina Rule 2.6(a), Rule 2.6(b), Rule 2.6(e)

Statutes:

• N.C. Gen. Stat. 1A-1, Rule 68 (confession of judgment)

Other opinions cited:

• CPR 250 (allowed confession of judgment to secure a fee; overruled to the extent inconsistent)
• RPC 158 (duty to refund a clearly excessive fee)

See also

• NC Ethics Op. RPC 231: contingent fee on gross recovery and insurer claim
• No further sibling opinions yet indexed.

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-222/

Original opinion text

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

Inquiry #1:

Attorney A charges a flat fee for representation in certain criminal and domestic matters. Prior to rendering legal services, he requires the client to sign a confession of judgment, pursuant to G.S. §1A-1, Rule 68. On occasion, the confession of judgment recites the amount of the flat rate fee Attorney A has quoted to the client and, on occasion the confession of judgment is blank as to the amount. Regardless of the extent of the services actually rendered to the client, if the client fails to pay the fee, Attorney A files the confession of judgment with the clerk of court. If the confession is blank, he fills in the amount of the flat fee quoted to the client.

Attorney A agrees to represent Client X on the defense of a felony. He tells Client X he will represent him for a flat fee of $2000 which Client X must pay by the conclusion of the representation. Prior to rendering services to Client X, Attorney A obtains Client X's signature on a confession of judgment for $2000. Attorney A makes one minor court appearance on behalf of Client X but, before rendering any other services to Client X, the district attorney dismisses the charges on her own initiative due to insufficient evidence. Client X has made no payments to Attorney A. Attorney A files the confession of judgment with clerk of court and proceeds to enforce the judgment. Client X disputes the amount of the fee. Is Attorney A's fee arrangement with Client X ethical?

Opinion #1:

No, a lawyer may not obtain a confession of judgment from a client prior to the rendering of legal services to the client. CPR 250, which was adopted under the superseded Code of Professional Responsibility, allowed a lawyer to obtain a confession of judgment from a client to secure a fee for services. However, the practice of obtaining a confession of judgment prior to the rendering of legal services to a client violates Rule 2.6 of the current Rules of Professional Conduct. To the extent CPR 250 is inconsistent with this opinion, it is overruled.

The State Bar's fee dispute arbitration program was established in 1993 in order to provide an appropriate and effective vehicle for resolving fee disputes between a client and a lawyer. See "Professionalism Report," NCSB Newsletter, Volume 17, No. 4, pages 8-14. Prior to initiating legal proceedings to collect a disputed fee, a lawyer is required by Rule 2.6(e) of the Rules of Professional Conduct to notify the client of the existence of the State Bar's fee arbitration program and to participate in good faith in nonbinding arbitration of the fee dispute if the client submits a proper request for fee arbitration. Although a client who signed a confession of judgment at the beginning of the representation may subsequently contest the actual amount of the fee, a lawyer holding the confession of judgment appears to have no duty to advise the client of the existence of the fee arbitration program because the filing of a confession of judgment abrogates the need to initiate legal proceedings to collect the fee. Moreover, with a confession of judgment in hand, the lawyer has no motivation to resolve a fee dispute with the client through arbitration because he or she already has a judgment. Attorney A's fee arrangement frustrates the purpose of the State Bar's mandatory fee arbitration program and is, therefore, in violation of Rule 2.6(e).

Attorney A's fee arrangement also violates Rule 2.6(a) which prohibits a lawyer from entering into an agreement for, charging, or collecting an excessive fee. Rule 2.6(b) lists the factors to be taken into consideration in determining whether a fee is reasonable. These factors include the time and labor required to perform the legal services. In the present inquiry, Attorney A performed minimal services and the favorable outcome did not result from the work of Attorney A. Therefore, the $2000 fee for the services is unreasonable. In RPC 158, it is held that Rule 2.6(a) requires a lawyer to refund to the client at the conclusion of the representation any portion of the fee which is clearly excessive. If a confession of judgment is attained prior to the rendering of legal services, it may be used unethically to collect an excessive fee.

Inquiry #2:

Would opinion #1 be different if the confession of judgment was signed by Client X in blank?

Opinion #2:

No.

Inquiry #3:

Attorney B has rendered legal services to Client Y. Client Y indicates that he does not dispute the fee for the services rendered but he is unable to pay the fee at this time. May Attorney B obtain a confession of judgment from Client Y for the amount of the fee?

Opinion #3:

Yes, provided Attorney Y explains the confession of judgment to the client. Since Client Y does not dispute the known fee, this arrangement does not undermine the purpose of the fee arbitration program. See Rule 2.6(e).