Can a lawyer charge a fee in a collection case that is partly a fixed amount and partly contingent on the recovery?

Plain-English summary

The inquiring lawyer asked three questions about a collection matter: whether a fee arrangement may be partly fixed and partly contingent; whether such an arrangement must be disclosed to a court when presenting a fee petition; and whether the arrangement may specify which portion of the judgment the contingent component applies to (the contract damages, or the damages plus court-awarded attorney fees).

The committee concluded that a part-fixed, part-contingent fee is permitted in a collection matter under RPC 1.5 and RPC 1.8(j)(2). On disclosure, it said the extent of any disclosure depends on the particular rules applicable to lawyer fee applications in the court concerned; if disclosure is required, the lawyer must make it under RPC 3.3, and if the lawyer is requested to provide or volunteers fee information, the lawyer must comply with RPC 8.4(c). The committee added that although RPC 1.5 would permit the contingent component to apply to particular elements of the total judgment, the requirements of RPC 1.5(c)(2) also apply if the judgment is to be collected over time. It noted the lawyer is not necessarily required to agree that the client gets the first dollars paid; the money collected may be divided between lawyer and client under the fee agreement, provided the agreement complies with RPC 1.5.

Currency note

This opinion was issued in 2000, before the Washington State Bar Association's adoption of the 2006 revisions to the 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 Treat this page as historical context, not current guidance.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. Note that Washington's contingent-fee provisions were renumbered in the 2006 revisions; confirm the current citation for the rule cited here as RPC 1.8(j)(2).

Common questions

Q: Is a mixed fixed-and-contingent fee allowed in a collection case?

A: The committee concluded such an arrangement is permitted under RPC 1.5 and RPC 1.8(j)(2).

Q: Must the lawyer disclose the arrangement to the court?

A: The committee said disclosure depends on the rules for fee applications in the particular court; if disclosure is required, it must be made under RPC 3.3, and a lawyer asked to provide or volunteering fee information must comply with RPC 8.4(c).

Q: Can the contingent part apply to only part of the judgment?

A: Yes, the committee said RPC 1.5 would permit the contingent component to apply to particular elements of the total judgment, with RPC 1.5(c)(2) also applying if the judgment is collected over time.

Background and rules framework

The opinion applied Washington RPC 1.5 (fees, ABA Model Rule 1.5) and RPC 1.8(j)(2) (then governing contingent fees in collection matters, ABA Model Rule 1.8) to a mixed fixed-and-contingent fee. It tied any required court disclosure to RPC 3.3 (candor toward the tribunal, ABA Model Rule 3.3) and RPC 8.4(c) (conduct involving dishonesty, ABA Model Rule 8.4), and pointed to RPC 1.5(c)(2) for judgments collected over time.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.5 (fees); Washington RPC 1.5, 1.5(c)(2)
• ABA Model Rule 1.8 (current clients: specific rules); Washington RPC 1.8(j)(2)
• ABA Model Rule 3.3 (candor toward the tribunal); Washington RPC 3.3
• ABA Model Rule 8.4 (misconduct); Washington RPC 8.4(c)

See also

• WSBA Ethics Op. 1911: Advancing Costs, Contingent Repayment
• WA Ethics Op. 1024: Contingent Fee for Collections
• WSBA Ethics Op. 1074: Contingent Fee, Domestic Split

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1108

Original opinion text

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

Advisory Opinion: 1914
Year Issued: 2000
RPC(s): RPC 1.5; 1.8
Subject: Part contingent and part fixed fee

The inquiring lawyer asks three questions:

1. May a lawyer use a fee arrangement with a collection client that is in part fixed and in part contingent?

2. If the lawyer uses such and arrangement, must he disclose it to a court when presenting his fee petition?

3. May the arrangement specify the portion of the judgment to which the contingent component applies, i.e., just the contract damage awarded to the plaintiff or the damages plus the court’s additional attorney fees awarded?

A fee arrangement that is part fixed and part contingent is permitted by RPC 1.5 and 1.8(j)(2) in a collection matter. The extent of any disclosure of such arrangement will depend on the particular rules applicable to lawyer fee applications in the court concerned. But, if such disclosure is required, then the lawyer must make that disclosure under RPC 3.3. If the lawyer is requested to provide or volunteers information about fees, the lawyer must comply with 8.4(c]. Although RPC 1.5 would permit the contingent fee component to apply to particular elements of the total judgment, if the judgment is to be collected over time, the requirements of RPC 1.5(c)(2) also apply.

You are not necessarily required to agree that your client gets the first dollars paid in. The monies collected from the debtor may be divided between you and the client pursuant to the fee agreement, provided that the fee agreement complies with RPC 1.5.