May a Vermont lawyer include litigation expenses in a quoted hourly rate?

Plain-English summary

A prospective client asked a lawyer to quote an hourly rate covering all disbursements. The lawyer presented three versions: all costs within the rate, general expenses within the rate with litigation expenses billed separately, or a later surcharge designed to recover recorded disbursements.

The committee applied former DR 2-106's reasonable-fee requirement and DR 5-103(B)'s rule that a client remain ultimately liable for litigation expenses. It preferred separate billing of litigation expenses. An inclusive rate was not inherently forbidden, but it would conflict with DR 5-103(B) if litigation expenses exceeded the fee and the client was not liable for the difference. The committee also identified a concern that an inclusive rate might discourage necessary expenses and affect competent service.

Currency note

This opinion was issued in 1997 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history states that the Rules of Professional Conduct applied to lawyer conduct after September 1, 1999. Later amendments or opinions may have changed the analysis. Treat this opinion as historical context and verify current rules before relying on it.

Common questions

Q: Is an all-inclusive hourly rate automatically prohibited?

A: No. The committee said it did not violate the former rules per se if the fee was reasonable and either covered litigation expenses or left the client liable for any difference.

Q: Which of the three billing proposals did the committee prefer?

A: It preferred separately billing litigation expenses while including anticipated general disbursements in the hourly rate.

Background and rules framework

The opinion quoted former DR 2-106 on excessive fees and DR 5-103(B) on advancing litigation expenses. It cited ABA Formal Opinion 93-379 concerning disbursements and described the lawyer's competence duty when setting an inclusive fee.

Citations and references

Rules of Professional Conduct:

• Vermont Code of Professional Responsibility DR 2-106 and DR 5-103(B)

Other opinions cited:

• ABA Formal Opinion 93-379

See also

• Vermont Ethics Op. 98-04: Litigation costs
• Vermont Ethics Op. 95-12: Support collection fees

Source

• Landing page: Vermont Bar Association fees opinions
• Original PDF: Opinion 97-13
• Vermont Supreme Court rules history, “These rules apply to lawyer conduct after September 1, 1999.”