Can a lawyer charge a collection agency a contingent fee measured as a percentage of what the agency itself recovers?

Short answer The committee concluded that the proposed contingent fee agreement, giving the lawyer 50% of whatever the collection-agency client received, is not precluded by RPC 1.5 so long as the rule's other requirements are met.
Bar
WSBA
Issued
1986

Apply this to your situation

This page answers the general question as of 1986. Ask about yours and see what the current Washington Rules of Professional Conduct says for your facts, with citations.

Currency note: this opinion is from 1986
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

A law firm represented a collection agency that was entitled to 25% of the amount collected, or 50% if the case went to trial. The lawyer's proposed agreement with the collection agency gave the lawyer a 50% contingency fee in whatever amount the collection agency received.

The committee was of the opinion that the proposed contingent fee agreement is not precluded by RPC 1.5, so long as the requirements of that rule are otherwise complied with. The committee did not flag the arrangement as improper in itself; it conditioned its conclusion on compliance with RPC 1.5's other requirements.

Currency note

This opinion was issued in 1986, before the 2006 revisions to the Washington Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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: Can a lawyer's fee be a percentage of what a collection-agency client recovers?

A: Under this 1986 opinion, yes. The committee concluded the proposed contingent fee, set at 50% of whatever the collection agency received, was not precluded by RPC 1.5.

Q: Was the approval unconditional?

A: No. The committee conditioned its conclusion on the agreement otherwise complying with the requirements of RPC 1.5.

Background and rules framework

RPC 1.5 (Washington's version of ABA Model Rule 1.5) governs lawyers' fees, including the reasonableness of fees and the requirements for contingent fee agreements. The committee applied RPC 1.5 to a contingent fee measured as a percentage of a collection-agency client's recovery and found it was not precluded.

Citations and references

Rules of Professional Conduct:

  • ABA Model Rule 1.5 (fees; contingent fees)
  • Washington RPC 1.5

See also

Source

Original opinion text

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

[A law firm represented a collection agency that was entitled to 25% of the amount collected, or 50% if the case went to trial. The lawyer's agreement with the collection agency gave the lawyer a 50% contingency fee in whatever amount the collection agency received.] The Committee was of the opinion that your proposed contingent fee agreement is not precluded by RPC 1.5, so long as the requirements of that rule are otherwise complied with.

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