Can a Virginia lawyer charge a contingent fee to a divorced client in an appeal seeking to reclassify marital property?

Plain-English summary

A divorced client living in California, unable to pay hourly or flat-rate fees, wanted to appeal an equitable-distribution order that had classified certain property of her ex-husband as non-marital. She proposed a contingent fee that would apply only to any award out of property reclassified on appeal, taking nothing from the trial court's existing monetary award. The committee was asked whether such an arrangement was proper.

The committee explained that while the mandatory rule on contingent fees, DR 2-105(C), did not specifically prohibit such arrangements in domestic-relations cases, the aspirational Ethical Consideration 2-22 indicates that contingent fees in domestic-relations matters are generally not appropriate, given the human relationships involved. It traced the policy to preserving marital harmony where reconciliation is possible: permitting contingent fees at the trial-court level might be construed as promoting divorce.

The committee reviewed its prior opinions, noting it had long treated such arrangements as improper except in rare circumstances where the impact on human relationships would clearly not be adversely affected (LE Op. 189), had allowed contingency fees for collecting spousal or child-support arrearages under those conditions (LE Op. 667, LE Op. 405), but had disallowed them for a percentage of a court-awarded lump-sum property settlement (LE Op. 423) and for a claim against a husband's military retirement pay (LE Op. 568). More recently it had permitted a contingent fee where the asset had been forgotten and left out of the settlement (LE Op. 1062).

Applying that line, the committee concluded that because the parties were in fact divorced and no human relationships appeared likely to be adversely affected, a contingent fee based only on reclassification of marital assets producing additional money for the wife above the trial court's award would not be improper for a client unable to pay reasonable fees.

Currency note

This opinion was issued in 1989, under Virginia's former Code of Professional Responsibility (the disciplinary rule and ethical consideration it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. As the committee note observes, current Rule 1.5(d)(1) and Comment [3a] now address when lawyers may handle family-law matters on a contingent-fee basis. 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: Are contingent fees in domestic-relations cases generally allowed in Virginia?

A: Under this 1989 opinion, no. The committee said that, although DR 2-105(C) did not specifically prohibit them, EC 2-22 indicates contingent fees in domestic-relations matters are generally not appropriate, and the committee had long treated them as improper except in rare circumstances.

Q: Why was the contingent fee allowed here?

A: The committee concluded that, because the parties were already divorced and no human relationships would be adversely affected, the arrangement did not implicate the policy against promoting divorce, and the client could not pay customary fees.

Q: What exactly could the fee be based on?

A: The committee said the fee could be based only on reclassification of marital assets producing additional money for the wife above the trial court's existing award, not on the trial court's monetary award itself.

Background and rules framework

The opinion interpreted former Virginia DR 2-105(C) (contingent-fee arrangements) and the aspirational Ethical Consideration 2-22, which counseled against contingent fees in domestic-relations matters because of the human relationships involved. The fee rules now appear as Virginia Rule 1.5, and the committee note points to Rule 1.5(d)(1) and Comment [3a] for the current treatment of contingent fees in family-law matters.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 2-105(C) (contingent-fee arrangements)
• Former Virginia EC 2-22 (aspirational; contingent fees in domestic-relations matters)
• ABA Model Rule 1.5 (fees; contingent-fee limits in domestic-relations matters)

Other opinions cited:

• Virginia LE Op. 189: contingent fees in domestic-relations cases proper only where human relationships are clearly not adversely affected.
• Virginia LE Op. 667; LE Op. 405: contingency fees for collecting spousal or child-support arrearages.
• Virginia LE Op. 423; LE Op. 568: contingent fees disallowed for a lump-sum property settlement and for a military-retirement claim.
• Virginia LE Op. 1062: contingent fee permitted for a forgotten asset left out of the settlement.

See also

• VA LEO 1606: Fees Compendium (Retainers, Fixed, Contingent)
• VA LEO 1766: Mixed Contingent-Plus-Hourly Fees
• VA LEO 1812: Termination of a Contingent-Fee Agreement
• VA LEO 1732: Departing-Lawyer Contingency-Fee Split

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1298.pdf

Original opinion text

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

Committee Opinion
October 25, 1989
LEGAL ETHICS OPINION 1298

CONTINGENT FEE AGREEMENTS –
DIVORCE: PROPRIETY OF
CONTINGENCY FEE IN
REPRESENTATION OF EX-WIFE IN
APPEAL OF PROPERTY
CLASSIFICATION.

You have advised that your client is a divorced woman, now living in California, who wishes to appeal the court's equitable distribution order classifying certain of her ex-husband's property as non-marital, thereby eliminating any partial distribution to her. You indicate that the woman is unable to pay customary (hourly or flat-rate) legal fees and wishes for you to pursue the appeal of the property classification on a proposed contingency fee arrangement which would apply only to any award out of any reclassified property. You indicate that no contingency fee would be taken from the trial court's monetary award.

You have asked the Committee to opine on the propriety of such a contingency fee arrangement based strictly upon any reclassification of the marital assets which would benefit your client above the existing trial court's monetary award.

Although the specific mandatory disciplinary rule applicable to contingent fee arrangements, DR:2-105(C), would not specifically prohibit such arrangements in domestic relations cases, the aspirational nature of Ethical Consideration 2-22 [EC:2-22] indicates that, because of the human relationships involved and the unique character of the proceedings, contingent fee arrangements in domestic relations cases are not appropriate. The Committee believes that the disfavor with which contingent fees in domestic relations matters are viewed is based upon the public policy intent to assist in the preservation of marital harmony where reconciliation is possible. Were contingent fees permissible at the original trial court level, such arrangements might be construed as promoting divorce.

It has been the longstanding opinion of this Committee that such arrangements are improper except in rare circumstances. L E Op. No. 189 sets forth the reluctance of this Committee to approve contingent fees in domestic relations cases and finds that such fees are only appropriate in those situations where the impact on human relationships will clearly not be adversely affected. The Committee has in the past opined that contingency fees for the collection of spousal or child support arrearages were not improper if the special conditions set forth in L E Op. No. 189 were present. (See L E Op. No. 667, L E Op. No. 405). The Committee has conversely found that no such special circumstances existed to permit contingent fee arrangements based upon a percentage of the court-awarded lump sum property settlement (LE Op. 423) or for representation of a divorced spouse's claim against her husband's military retirement pay (L E Op. No. 568). More recently, however, the Committee has opined that a contingent fee arrangement was permissible for an attorney's representation of a divorced spouse with regard to a valuable asset that belonged to the parties but had been neither contemplated nor included in the settlement agreement since its very existence had been forgotten by the client at the time the property settlement had been negotiated. (See LE Op. 1062)

If the client is unable to pay reasonable fees, the Committee is of the opinion that, since the parties are in fact divorced and it does not appear that any human relationships would be adversely affected, a contingent fee arrangement would not be improper if based only upon any reclassification of the marital assets which would result in additional monies available to the wife above the trial court's award.

Committee Opinion
October 25, 1989

Legal Ethics Committee Notes. – Rule 1.5(d)(1) and Comment [3a] codify the circumstances in which lawyers may handle family law matters on a contingent fee basis.