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Obligations When Receiving Flat Fees and Other Fees Paid in Advance

Document Type

Article

Language

English (en)

Publication Date

2024

Publication Title

Criminal Justice Magazine (ABA Criminal Justice Section)

Abstract

Formal Opinion 505 clarifies the proper handling and disposition of fees paid in advance for legal work to be performed in the future and states that fees paid in advance, including flat fees, have to be deposited in a client trust account until the fee is earned.

Model Rule 1.15(a) states that client property, which includes fees paid in advance, must be held separately, kept in a separate account, or placed elsewhere with the client’s consent.

The opinion recognizes that a minority of jurisdictions have not taken the Model Rule approach to flat fees or fees labeled “nonrefundable” or “earned upon receipt,” either through variations in their ethics rules or through advisory ethics opinions.

Keywords

American Bar Association, Attorney Ethical Obligations, Flat Fees, Professional Responsibility

Publication Citation

Peter A Joy & Kevin C. McMunigal, Obligations When Receiving Flat Fees and Other Fees Paid in Advance, Winter 2024 Crim. L. Mag. (2024)

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