What fee is a discharged contingent-fee lawyer entitled to in Nevada, and can the lawyer keep the client's file?

Plain-English summary

The Committee addressed how much of a contingent fee a discharged attorney may claim when the discharge follows an initial settlement offer. It assumed the agreement was in writing, the terms were reasonable, and the discharge was without cause. The answer: the attorney is entitled to recovery in quantum meruit, the rule the Nevada Supreme Court and most jurisdictions apply to contingent-fee disputes arising from an attorney's discharge.

The Committee explained that quantum meruit is a reasonable fee based on the results, time expended, and the other SCR 155 factors (citing Formal Opinions 4 and 17), and that the fee is not earned in a contingent case until there is a recovery. The first attorney must therefore wait for the case's conclusion to determine what fee, if any, is due; a later loss at trial could leave no recovery even though a settlement offer had been advanced. Once the total recovery is known, the two attorneys apportion their efforts against the single contingent fee, and NRS 18.015 lets a court settle the division if they cannot agree, with the fee held in escrow so the client can still receive distribution.

On the file, the Committee cautioned that a discharged attorney must take affirmative steps not to prejudice the client's case. NRS 18.015 authorizes a charging lien for fees but not retention of the client's papers; while SCR 166.4 lets an attorney retain papers "to the extent permitted by other law," Nevada case law condemns retaining liens and has produced sanctions where a client shows prejudice (citing In re Kaufman). SCR 166.4 requires the terminated attorney to surrender papers the client is entitled to and to protect the client's interests. The Committee declined to say whether one-third of the initial offer was reasonable, noting it depends on the facts; an offer obtained after only a few hours could yield an unreasonable effective hourly rate, while an offer secured by the lawyer's reputation or skill might justify more.

Currency note

This opinion was issued in 1994, before Nevada's 2006 adoption of the current Nevada Rules of Professional Conduct (the renumbered Rules 1.0 et seq. that replaced the former Supreme Court Rules) and the related Ethics 2000-based revisions. The fee rule is now Rule 1.5, the safekeeping-of-property rules are now Rule 1.15, and the duties on terminating representation (including surrendering the file) are now Rule 1.16. NRS 18.015's charging lien is a statute that has since been amended. Treat this page as historical context, not current guidance. Verify against current rules and the current statute before relying on any specific point mentioned here.

Common questions

Q: What can a contingent-fee lawyer recover after being fired without cause?

A: Per the opinion, the lawyer is entitled to a reasonable fee in quantum meruit, measured by the SCR 155 factors and determined at the conclusion of the case, since a contingent fee is not earned until there is a recovery.

Q: Can the discharged lawyer hold the client's file until paid?

A: No. The opinion concluded that NRS 18.015 authorizes a charging lien for fees but not retention of the client's papers, and that Nevada case law condemns retaining liens and has led to sanctions where the client shows prejudice; SCR 166.4 requires surrendering the file.

Q: Is the lawyer entitled to a share of the initial settlement offer?

A: The opinion declined to set a figure, calling it fact-specific; the initial offer is just one factor, and a large fee for a few hours of work could be unreasonable under SCR 155, while an offer secured by the lawyer's skill or reputation might justify more.

Background and rules framework

The opinion interprets former SCR 155 (reasonableness of fees, Model Rule 1.5), former SCR 165 (safekeeping and prompt delivery of client funds, Model Rule 1.15), and former SCR 166.4 (duties on terminating representation, Model Rule 1.16(d)), reading them with NRS 18.015 (attorney's charging lien) and Nevada case law on retaining liens.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 / former Nev. SCR 155 (reasonableness of fees)
• Model Rule 1.15 / former Nev. SCR 165 (safekeeping and delivery of client funds)
• Model Rule 1.16(d) / former Nev. SCR 166.4 (surrender of papers on termination)

Statutes:

• Nev. Rev. Stat. 18.015 (attorney's charging lien)

Cases:

• In re Kaufman, 93 Nev. 452, 567 P.2d 957 (1977) (sanctions for retaining lien where client shows prejudice)
• Hayes v. Secretary of Health & Human Services, 923 F.2d 418 (6th Cir. 1991) (fee presumed reasonable if not over twice the prevailing hourly rate)

Other opinions cited:

• ABA Informal Op. 86-1521 (1986) (duty to advise client of alternative fee arrangements)
• State Bar of Nevada Formal Opinions 4 and 17 (fee reasonableness; advertising fields of practice)

See also

• NV Ethics Op. 15: non-refundable retainer agreements
• NV Ethics Op. 16: contingent fees in post-divorce property settlement disputes
• NV Ethics Op. 4: percentage-of-hourly-rate fee arrangement

Source

• Landing page: https://nvbar.org/for-lawyers/ethics-discipline/ethics-opinions/
• Original PDF: https://nvbar.org/wp-content/uploads/Opinion-18_10-29-94.pdf