Ethics Opinions
Iowa Supreme Court Board of Professional Ethics and Conduct
Date of Opinion:
09/25/2001
Opinion Number:
01-02
Title:
FEES: APLAND
Opinion:
The chair of a local bar association ethics committee and the chair of a local bar association fee arbitration committee have sought guidance concerning requirements for handling advance flat fee payments in light of
Iowa Sup. Ct. Bd. of Prof’l Ethics & Conduct v. Apland
, 577 N.W.2d 50 (Iowa 1998). Their committees are seeing a number of flat fee cases, especially criminal cases, that share the following facts:
a. The client and the attorney agree to a flat fee for specific services;
b. The fee is reasonable, based upon the factors set forth in Iowa Code of Professional Responsibility for Lawyers DR 2-106(B);
c. The fee is paid in advance;
d. The fee is held in the lawyer’s trust account from the time of receipt until conclusion of the client’s legal matter;
e. The services are performed in a timely fashion;
f. The attorney fails to maintain contemporaneous time records; and
g. The attorney does not provide a billing or notice of any kind to the client at the time the fees are withdrawn from trust.
The board has been asked the following specific questions concerning the foregoing factual pattern:
1. Is it mandatory that contemporaneous time records be maintained in all cases?
2. Is the failure to maintain contemporaneous time records a per se violation of the Code of Professional Responsibility as interpreted in
Apland
even if the fee is reasonable and is predicated on other than a time-charge basis?
3. Must an attorney notify his client in writing of the “time, amount and purpose of any withdrawal of the fee,”
see Apland
, 577 N.W.2d at 59,
where the fee is reasonable, has been maintained in the lawyer’s trust account and is not withdrawn until the conclusion of the work?
In response to the first two questions, it is the opinion of the board that it is not mandatory to keep contemporaneous time records in a flat fee case and that failure to do so is not a per se violation. A lawyer should not charge more than a reasonable fee and should be able to demonstrate the reasonableness of the fee charged, whether by time records or some other recognized means.
See
EC 2–19 and EC 2–20; DR 2–106(B). Though not mandatory, it is advisable to maintain contemporaneous time records in a flat fee case. If controversy arises as to the amount of a reasonable fee (for example, when the attorney-client relationship ends before the case is completed), such records could assist in resolving the matter.
See
generally
EC 2–25 (“A lawyer should be zealous in efforts to avoid controversies over fees with clients and should attempt to resolve amicably any differences on the subject.”).
In response to the third question, it is the opinion of the board that
Apland
does not make exception for the circumstances mentioned. All clients should receive written notification pursuant to
Apland
when the fee, or any part thereof, is withdrawn from trust.