Does a lawyer who habitually offers legal services for less than the minimum fee schedule violate the Canons of Professional Ethics?

Plain-English summary

The committee was asked whether an attorney who "habitually and notoriously" offers legal services for less than the fees set out as a guide in a duly adopted minimum fee schedule violates the Canons. It quoted Canon 7, which condemns efforts, direct or indirect, to encroach upon the professional employment of another lawyer as unworthy of those who should be brethren at the Bar. The committee reasoned that an attorney who habitually "underbids" his fellow lawyers is in effect soliciting business, and that this encroachment ultimately benefits neither the public nor the profession.

The committee marshaled outside authority for the proposition that minimum fee schedules reflect the considered judgment of the Bar. It quoted ABA Formal Opinion No. 302 (no lawyer should bid competitively for clients, and the profession may combat that evil through recommended minimum fee schedules), the State Bar of Wisconsin's 1957 Opinion No. 8 (the schedules were set after long study of fees adequate to let a lawyer serve the public properly), and the Idaho State Bar's Opinion No. 7 (an attorney who deliberately and habitually undercuts customary charges, where the fee cannot be justified under Canon 12's guideposts, violates the Canons).

The committee concluded that fees should be arrived at by considering all the factors in Canon 12, and that an habitual disregard of the Association's minimum fee schedule constitutes, in effect, a violation of Canons 7 and 12. It was careful to add a limit: nothing in the opinion made the schedule mandatory, lawyers must follow Canon 12 in fixing fees, and on occasion fees below the minimum would be not only proper but required. The words "habitually" and "notoriously," it said, are the key words that render the practice unethical. The opinion overruled Advisory Opinion No. 85 (Jan. 25, 1935), which had disapproved the adoption of a minimum fee schedule.

Currency note

This opinion was issued in 1962, before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. The premise underlying this opinion, that bar-promulgated minimum fee schedules are a legitimate way to discourage fee competition, no longer reflects current law: the United States Supreme Court held in Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975), that a bar association's minimum fee schedule was unlawful price-fixing under the Sherman Act, and Bates v. State Bar of Arizona, 433 U.S. 350 (1977), separately rejected categorical bans on truthful lawyer advertising. 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: Did the opinion make the minimum fee schedule mandatory?

A: No. The committee expressly said nothing in the opinion indicated the schedule was in any way mandatory, that lawyers must fix fees under Canon 12, and that fees below the minimum would on occasion be proper or even required.

Q: What turned ordinary below-schedule pricing into an ethics violation?

A: The committee identified "habitually" and "notoriously" as the key words. A single or occasional below-minimum fee was permissible; chronic, conspicuous underbidding was what it treated as soliciting and encroachment under Canons 7 and 12.

Q: Did the opinion change Oklahoma's earlier position on fee schedules?

A: Yes. It overruled Advisory Opinion No. 85 (adopted January 25, 1935), which had disapproved the adoption of a minimum fee schedule.

Background and rules framework

The opinion applied Canon 7 of the Canons of Professional Ethics (encroaching on another lawyer's employment is unworthy) and Canon 12 (the factors governing the proper fixing of fees), both adopted in Oklahoma, to chronic fee cutting below a bar minimum fee schedule. It relied on ABA Formal Opinion No. 302 and on opinions of the Wisconsin and Idaho bars. The opinion predates the Model Rules and made no Model Rule citation.

Citations and references

Rules of Professional Conduct:

• Canon 7 (ABA Canons of Professional Ethics, adopted by the Oklahoma Bar): efforts to encroach upon another lawyer's professional employment are unworthy of members of the Bar.
• Canon 12 (ABA Canons of Professional Ethics, adopted by the Oklahoma Bar): the factors governing the proper fixing of fees.

Other opinions cited:

• ABA Formal Opinion No. 302: no lawyer should bid competitively for clients; recommended minimum fee schedules are a proper means to combat inadequate compensation.
• State Bar of Wisconsin Opinion No. 8 (1957): minimum fee schedules reflect long study of fees adequate to let a lawyer serve the public properly.
• Idaho State Bar Opinion No. 7: deliberate and habitual undercutting of customary charges, unjustifiable under Canon 12, violates the Canons.
• Oklahoma Advisory Opinion No. 85 (Jan. 25, 1935): disapproved adopting a minimum fee schedule (overruled by this opinion).

See also

• Okla. Bar Ethics Op. 210: A finance company financing a debtor's bankruptcy
• Okla. Bar Ethics Op. 219: Announcing availability to serve other lawyers
• Okla. Bar Ethics Op. 221: Trade association directing members to a retained attorney

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-220/

Original opinion text

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

Adopted October 18, 1962

INQUIRY

An attorney habitually and notoriously offers to perform legal services for less than the fees set forth as a guide in a duly adopted minimum fee schedule. Does this continual fee cutting violate the Canons of Professional Ethics?

OPINION

Canon 7 provides in part as follows:

“Efforts, direct or indirect, in any way to encroach upon the professional employment of another lawyer, are unworthy of those who should be brethren at the Bar ….”

An attorney who habitually “underbids” his fellow lawyers is, in effect, soliciting business. This encroachment upon the practice of others, in the end result, neither benefits the public nor the legal profession. It constitutes a competitive technique which is not condoned.

The American Bar Association’s formal Opinion No. 302 is as follows:

“… No lawyer should be in the position of bidding competitively for clients. It is proper for the profession to combat such evils by suggested or recommended minimum fee schedules and other practices which have a tendency to discourage the rendering of services for inadequate compensation. Such schedules represent the judgment of the local or State Bar Association as to what constitutes the minimum for reasonable charges for legal services, and should be so regarded by the lawyers and the public in the community.”

The State Bar of Wisconsin in 1957 (Opinion No. 8) pointed out that the fee schedules:

“… were made after long and continuing study as to fees customarily charged for such services and deemed to be adequate to the end that a lawyer may fairly serve the public by being able to devote sufficient time and study to the work, being equipped to do it properly and keeping himself well informed in the law.”

The Idaho State Bar (Opinion No. 7) stated the proposition thusly:

“An attorney who deliberately and habitually undercuts the customary charges of the Bar for similar services, and such fees cannot be justified under the guidepost outlined in Canon 12, is violating the Canons of Ethics.”

Fees should be arrived at by consideration of all of the factors enumerated in Canon 12, and an habitual disregard for the minimum fee schedule promulgated by the Oklahoma Bar Association constitutes, in effect, a violation of Canons 7 and 12.

Nothing in this opinion should be construed as indicating that the minimum fee schedule of the Association is in any way mandatory. Lawyers must follow the principle enumerated in Canon 12 in fixing fees, and it is apparent that on occasion fees below the minimum will be not only proper, but required. The words “habitually” and “notoriously” are the key words which render the practice unethical. Advisory Opinion No. 85, adopted January 25, 1935, reported in Oklahoma Decisions 341-343 P.2d, disapproving the adoption of a minimum fee schedule, is overruled.