Can a lawyer take a contingent fee for handling a rate-increase application before an administrative agency?

Plain-English summary

The committee considered whether a lawyer may be compensated on a contingent-fee basis to process a rate-increase application before an administrative agency or other public body. It concluded that, unless prohibited by statute, rule, regulation, or ordinance, contingent fees under appropriately circumscribed circumstances are not improper (cf. Judiciary Law sec. 474). Quoting EC 2-20, the committee noted that contingent fees in civil cases have long been accepted because they often provide the only practical means for a claimant to afford competent counsel, and that EC 2-20 treats administrative-agency proceedings under the same considerations as other civil cases (while domestic-relations and criminal contingent fees are rarely justified or condemned).

The committee observed that, although the historical rationale for contingent fees was access for those who could not otherwise afford counsel, the practice has become generally accepted, and so long as the arrangement is openly arrived at by parties knowledgeable about such matters there is no impropriety. It quoted EC 5-7's caution that a lawyer generally should not acquire a proprietary interest in the client's cause, while recognizing that a reasonable contingent fee is permissible in civil cases and that a lawyer, being better positioned to evaluate a cause of action, should enter such an arrangement only where it benefits the client.

The committee added that whether a contingent fee gives rise to some other breach of professional responsibility depends on the lawyer's other conduct, not on the fee being contingent, and that in assessing the reasonableness of a fee its contingent nature should be taken into account (DR 2-106(B)(8)). If the stringent criteria of EC 2-20, EC 5-7, and DR 2-106 are met, entering the arrangement is not improper.

Currency note

This opinion was issued in 1975, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009; contingent fees are now governed by Rule 1.5, which sets writing and reasonableness requirements and prohibits contingent fees in certain domestic-relations and criminal matters. 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 Treat this page as historical context, not current guidance.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: Is a contingent fee allowed for an administrative rate-increase application?

A: Under this opinion, yes, unless a statute, rule, regulation, or ordinance prohibits it. The committee treated administrative-agency proceedings like other civil cases under EC 2-20.

Q: What conditions did the committee attach?

A: Per the opinion, the fee must be reasonable, openly arrived at by knowledgeable parties, and must not impair the lawyer's free judgment; the contingent nature is itself a factor in judging reasonableness (DR 2-106(B)(8)).

Q: Does a contingent fee by itself create an ethics problem?

A: No. The committee said whether a contingent fee leads to some other breach depends on the lawyer's other conduct, not on the fee being contingent.

Background and rules framework

The opinion applied EC 2-20 (acceptance of contingent fees), EC 5-7 (avoiding a proprietary interest in the client's cause), and DR 2-106(B)(8) (the contingent nature as a reasonableness factor) of the then-current New York Code, and referenced Judiciary Law section 474. The current analogue is Rule 1.5 (fees), which governs contingent-fee writing, reasonableness, and prohibited categories.

Citations and references

Rules of Professional Conduct:

• MR 1.5 (fees, including contingent fees)
• NY EC 2-20, EC 5-7; DR 2-106(B)(8)

Statutes:

• N.Y. Judiciary Law sec. 474 (attorney compensation by agreement)

See also

• NY State Bar Op. 412: Contingent fees in criminal cases
• NY State Bar Op. 399: Charging interest on delinquent fee accounts

Source

• Landing page: https://nysba.org/opinion-390/