A non-refundable fee should be a simple concept; it seems to be a fee that, once its paid, won't be returned. When it comes to attorneys who charge "non-refundable" fees, the reality is a bit more complicated. I have come across an increasing number of attorney-client agreements that describe certain fees paid by the client as "non-refundable." Often times, the lawyers themselves aren't aware that in several states the Rules of Professional Responsibility severely limit when non-refundable fees can be charged.  In most states, a lawyer may charge a non-refundable fee if the lawyer is simply being hired to be available to do work. Sometimes this arrangement is called a "pure retainer." The client isn't asking the lawyer to work on a specific project, just to be available to do the work. This situation rarely takes place. A vast majority of the time, clients are hiring lawyers to do something specific.

The law in an increasing number of states provides that lawyers must return a "non-refundable fee" if they don't do any of the work they were hired to do. A 2005 article describing the law in Washington State exemplifies how lawyers can be disciplined for not returning non-refundable fees:

The [Washington State] Supreme Court, in an October 21, 2004, disciplinary decision, rejected the argument that a lawyer is entitled to keep a nonrefundable fee whether or not services are performed. The Court distinguished a "retainer" to secure a lawyer's availability over a period of time, as discussed in WSBA Formal Opinion 186, from a flat fee for legal services in a specific matter. Because the lawyer failed to provide the contracted services, his failure to return unearned money violated RPCs 1.5 and 1.15(d).

Different states treat non-refundable fees differently. But if you paid a non-refundable fee and the lawyer did no work or an unreasonably small amount of work relative to he size of the fee, not only may you be able to get your "non-refundable fee" back, your lawyer could be disciplined for failing to return that fee. That's why non-refundable fees aren't as straightforward as they first appear.

Posted by Gideon on 05/16 at 03:48 PM
Categories: Attorney Discipline | Categories: Attorney Fees | Categories: Washington State Lawyers | Permalink