Do fee-arbitration committee members have to report a lawyer's misconduct they learn about, and does the lawyer's joining arbitration affect that?

Plain-English summary

A local bar association ran a Fee Arbitration Committee that heard fee disputes between attorneys and clients by mutual consent. A client called a committee member and reported that, after a "Final Bill" omitted a $700 payment, the attorney issued a "Revised Final Bill" that credited the $700 but added other charges so the total stayed the same, charged for preparing the bill at $150/hour, was unreachable by phone, and had a secretary insist the client pay; there was no written fee agreement beyond an oral $150/hour rate for a divorce. The committee was asked whether a lawyer's consent to fee arbitration means his fitness should not be challenged, whether explaining fees to the arbitration committee satisfies DR 2-105(A) and (B), what should be reported as an ethical violation, and whether committee members who fail to report violate DR 1-103(A).

The controlling rules were DR 1-103(A) (duty to report misconduct raising a substantial question as to honesty, trustworthiness, or fitness), DR 2-105(A) (fees must be reasonable and adequately explained to the client), and DR 2-105(B) (the basis or rate of the fee furnished on the client's request).

The committee answered that a lawyer's agreeing to submit to fee arbitration does not, by itself, justify concluding that an established violation fails to raise a substantial question about fitness, and conversely that refusing to participate does not by itself raise such a question. It held that adequately explaining fees to the arbitration committee does not satisfy DR 2-105(A)'s requirement to explain fees to the client (citing EC 2-21), and that it lacked facts to decide any DR 2-105(B) violation. As to reporting, if committee members conclude, to a substantial degree of certainty, that misconduct raising a substantial question occurred, the chair and members are required by DR 1-103(A) to report it to the Virginia State Bar without unreasonable delay (citing LE Op. 1338, 1528, 1545), and a failure to do so by members who know of the case would itself violate DR 1-103(A).

Currency note

This opinion was issued in 1994, under Virginia's former Code of Professional Responsibility (the disciplinary rules and ethical considerations it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. 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: Must fee-arbitration committee members report a lawyer's misconduct they learn about?

A: Under this 1994 opinion, yes, if they conclude to a substantial degree of certainty that a violation occurred raising a substantial question about the lawyer's fitness; the chair and members must then report it to the bar without unreasonable delay, and failing to do so violates DR 1-103(A).

Q: Does a lawyer's agreeing to fee arbitration shield his fitness from question?

A: No. The committee held that consenting to arbitration does not by itself mean an established violation fails to raise a substantial question, and that refusing to arbitrate does not by itself raise such a question.

Q: Does explaining fees to the arbitration committee satisfy the duty to explain fees?

A: No. The committee held that explaining fees to the Fee Arbitration Committee does not satisfy DR 2-105(A)'s separate requirement that the lawyer adequately explain the fees to the client.

Background and rules framework

The opinion interpreted former Virginia DR 1-103(A) (duty to report misconduct) and DR 2-105(A) and (B) (reasonable, adequately explained fees; basis or rate on request), with EC 2-21. The reporting duty is now carried forward in Virginia Rule 8.3, and the fee-explanation duties in Rule 1.5.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 1-103(A); DR 2-105(A), (B); EC 2-21 (Code of Professional Responsibility)
• ABA Model Rule 8.3 (reporting misconduct); Model Rule 1.5 (fees)

Other opinions cited:

• Virginia LE Op. 1338, 1528, 1545: report misconduct without unreasonable delay once both reporting prongs are met.

See also

• VA LEO 1646: Reporting Misconduct in a Civil Case
• VA LEO 1571: Refusing to Itemize a Fee Lien
• VA LEO 1606: Fees Compendium (Retainers, Trust)

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1562.pdf

Original opinion text

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

Committee Opinion
February 8, 1994
LEGAL ETHICS OPINION 1562

FEES: ARBITRATION OF FEE DISPUTE;
DUTY TO REPORT MISCONDUCT.

You have presented a hypothetical situation in which a local bar association operates a
Fee Arbitration Committee which hears fee disputes between attorneys and clients with
the consent of both parties. As part of the process, Committee members take telephone
calls from the public and, if the caller requests, he/she is sent an application for fee
arbitration.
You indicate that a client calls a member of the Fee Arbitration Committee and reports
the following conduct of an unnamed attorney:
Client received a "Final Bill" from the attorney. Upon review of the bill, Client
noticed that a $700.00 payment was not credited to her account. Client sent a copy
of her $700.00 check and subsequently received a "Revised Final Bill" crediting her
account with the $700.00 payment, but revising and adding other charges so that the
amount due remained the same. Client then called attorney on several occasions but
was unable to speak to him. The attorney's secretary insisted that the client pay the
revised bill.
Client made monthly payments on the bill but was charged for the preparation of the
bill at the attorney's hourly rate of $150.00 per hour. Client has objected to the
charges, but the secretary has said that it is a normal charge.
There is no written fee agreement. To the best of the client's recollection, the only
agreement was to pay $150.00 per hour to process a divorce.
You have asked the committee to opine whether, under the facts of the inquiry, (1) if
the above attorney consents to fee arbitration, is it reasonable to assume that his [honesty,
trustworthiness, or] /1 fitness should not be challenged; (2) if the attorney adequately
explains his fees to the Committee as a part of arbitration and if the fees are reasonable,
does that satisfy the attorney's requirements under DRs 2-105(A) and (B); (3) what, if
anything, should be reported by the Committee to the bar as an ethical violation; and (4)
if the Committee (or members who know about the case) fail to report the misconduct,
are they in violation of DR:1-103(A).
The appropriate and controlling Disciplinary Rules related to your inquiry are DR:1103(A) which states in pertinent part that a lawyer having information indicating that
another lawyer has committed a violation of the Disciplinary Rules that raises a
substantial question as to that lawyer's honesty, trustworthiness, or fitness to practice law
in other respects shall report such information to the appropriate professional authority;
DR:2-105(A) which states that a lawyer's fees shall be reasonable and adequately
explained to the client; and DR:2-105(B) which provides that the basis or rate of a
lawyer's fee shall be furnished on request of the lawyer's client.

Committee Opinion
February 8, 1994
The committee responds relative to your inquiries as follows.
As to your first inquiry, the committee is of the opinion that if members of the Fee
Arbitration Committee conclude, based upon a substantial degree of certainty, that a
lawyer has committed a violation of the Disciplinary Rules, the fact that the lawyer has
agreed to submit to fee arbitration would not in and of itself justify the members of the
Fee Arbitration Committee in concluding that the violation fails to raise substantial
questions as to that lawyer's honesty, trustworthiness, or fitness to practice law.
Conversely, the committee is of the further opinion that the attorney's refusal to
participate in the arbitration process would not in and of itself raise a substantial question
as to the lawyer's honesty, trustworthiness, or fitness to practice law.
Regarding your second inquiry, the committee is of the opinion that an adequate
explanation by the attorney of his fees to the Fee Arbitration Committee would not satisfy
the requirement of DR:2-105(A) that the attorney provide an adequate explanation of the
fees to the client. Ethical Consideration 2-21 [ EC:2-21] provides helpful guidance: "As
soon as feasible after a lawyer has been employed, it is desirable that he reach a clear
agreement with his client as to the basis of the fee charges to be made." This committee is
without sufficient facts to determine whether or not there has been a violation of the
requirement set forth in DR:2-105(B), i.e., whether the basis or rate of a lawyer's fee was
furnished on request of the lawyer's client.
As to your third inquiry, the committee is of the opinion that if the members of the Fee
Arbitration Committee conclude, based upon a substantial degree of certainty, that
misconduct has occurred which raises a substantial question as to the attorney's honesty,
trustworthiness, or fitness to practice law in other respects, the chair of the committee and
its members are required by DR:1-103(A) to report, without unreasonable delay, such
misconduct to the Virginia State Bar. See LE Op. 1338, LE Op. 1528, LE Op. 1545.
Finally, as to your fourth inquiry, the committee is of the opinion that failure of the Fee
Arbitration Committee chair or committee members (who know about the case) to report
the attorney's misconduct, without unnecessary delay, would be improper and violative of
DR:1-103(A).
Committee Opinion
February 8, 1994
Legal Ethics Committee Notes. – If information about the ethics violation is a client
confidence, a lawyer may report the other lawyer’s misconduct only if the client consents
under Rule 1.6(c)(3); the lawyer considering whether to report must consult with the
client under that Rule.