Can a lawyer keep a 'non-refundable availability retainer' as the lawyer's own property if it credits the client future hours, and can hourly-rate work be called pro bono?

Plain-English summary

A lawyer billing $195 per hour asked two questions. First, whether the lawyer could charge and receive a "non-refundable 'availability' retainer," treat it as the lawyer's own property, and in exchange credit the client ten hours of future legal services, without violating RPC 1.5(f)(1). Second, in the alternative, whether the lawyer could bill $1,950, treat it as the lawyer's own property, and in exchange promise the client ten hours of "pro bono" legal services.

The committee answered both no. On the first, the arrangement is not a retainer under RPC 1.5(f)(1) because it contemplates crediting the amounts received as compensation for legal services; therefore the advance payment of $1,950 must initially be deposited into a trust account under RPC 1.15A(c)(2). On the second, performing legal services in exchange for compensation at the equivalent of normal hourly billing rates would not properly be considered "pro bono publico" service, and characterizing it as such would violate RPC 7.1.

In practice

Under the Washington rules as they stood at the time of the opinion, the committee distinguished a true availability retainer, which compensates the lawyer for being available and may be the lawyer's property, from an advance fee that buys a block of future hours. The opinion holds that because the proposed "availability retainer" credits the payment toward future legal services, it is an advance fee that must initially be deposited in trust under RPC 1.15A(c)(2), not treated as the lawyer's own property. On the alternative framing, the committee holds that paid work billed at normal hourly rates is not "pro bono publico," so describing it that way is a misrepresentation that violates RPC 7.1.

Common questions

Q: Can a lawyer keep a "non-refundable availability retainer" as the lawyer's own money if it credits the client future hours?

A: No. The committee concluded that crediting future legal services means the arrangement is not a true retainer under RPC 1.5(f)(1), so the advance payment must initially be deposited into trust under RPC 1.15A(c)(2).

Q: Where must an advance payment for future hours be held?

A: In a trust account under RPC 1.15A(c)(2), because the committee treated it as an advance fee for legal services to be performed, not as earned-on-receipt property of the lawyer.

Q: Can legal work billed at the lawyer's normal hourly rate be called "pro bono"?

A: No. The committee concluded that work compensated at the equivalent of normal hourly billing rates is not "pro bono publico," and characterizing it as such would violate RPC 7.1.

Background and rules framework

The opinion interpreted Washington RPC 1.5(f)(1) (Model Rule 1.5, the limited category of true retainers a lawyer may treat as earned on receipt), RPC 1.15A(c)(2) (Model Rule 1.15, advance fees deposited into trust), and RPC 7.1 (Model Rule 7.1, false or misleading communications about a lawyer's services). The committee read the crediting of future hours as converting the payment into an advance fee subject to the trust-deposit requirement, and read the "pro bono" label as misleading where the work is paid at normal rates.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 / Washington RPC 1.5(f)(1) (retainers treated as earned on receipt)
• Model Rule 1.15 / Washington RPC 1.15A(c)(2) (advance fees deposited into trust)
• Model Rule 7.1 / Washington RPC 7.1 (false or misleading communications)

See also

• WA Ethics Op. 2179: irrevocable fee agreements for a Medicaid spend-down
• WA Ethics Op. 2176: keeping uncashed trust-account funds

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1645

Original opinion text

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

Advisory Opinion: 2197
Year Issued: 2009
RPC(s): 1.5(f)(1), 1.15A(c)(2), 7.1
Subject: non-refundable availability retainer

I. Questions Proposed:

1. Lawyer’s hourly billing rate is $195.00/hour. Can lawyer charge, and receive from a client a “non-refundable ‘availability’ retainer”, treat the fee as lawyer’s own property, and in exchange “credit” the client ten hours of future legal services without violating RPC 1.5(f)(1)?

2. In the alternative, can lawyer bill $1950.00, treat the fee as lawyer’s own property, and in exchange promise to provide the client ten hours of “pro bono” legal services?

II. Response:

1. The arrangement described is not a retainer under RPC 1.5(f)(1) because it contemplates crediting amounts received as compensation for legal services. Therefore, the advance payment of $1,950 must initially be deposited into a trust account under RPC 1.15A(c)(2).

2. The performance of legal services in exchange for compensation at the equivalent of normal hourly billing rates would not properly be considered “pro bono publico” service, and to characterize it as such would violate RPC 7.1.