ABA clarifies fee guidelines

Listen to this article

An American Bar Association committee is spelling out when it’s reasonable for lawyers to change a client’s fee terms during representation.

This month, the ABA’s standing committee on ethics and professional responsibility issued an advisory opinion to help reduce confusion and potential billing disputes.

“What the rule suggests is: You can’t change your billing structure midstream without agreement from the client,” said Dean Dietrich, former chairman of the State Bar of Wisconsin’s Professional Ethics Committee. “I don’t think anyone would disagree with that.”

Wisconsin already has rules that require lawyers issue written communication to a client about fee arrangements, but the ABA’s advice on the subject wasn’t spelled out so clearly before.

According to the ABA Rules for Professional Conduct, any changes in the rate of the fee or expenses shall also be communicated to the client.

But, according to the ABA committee’s formal opinion, “this single reference does not mean that lawyers are free to change existing fee arrangements simply by giving notice to clients.” Lawyers, according to the opinion, should explain why a change is reasonable, and the client should accept the change in fee terms.

A lawyer generally may not threaten to withdraw if the client does not agree to the increase in fee, according the ABA committee opinion.

Changes that alter “the basic nature of a fee arrangement or significantly increase the lawyer’s compensation absent an unanticipated change in circumstances ordinarily will be unreasonable,” according to a summary of the ABA committee’s opinion.

While the opinion is purely advisory, Dietrich said, it should provide additional guidance to lawyers who take shortcuts on billing arrangements.

Christine Simmons of Missouri Lawyers Media, which, like Wisconsin Law Journal, is owned by The Dolan Co., also contributed to this report.