A fixed fee agreement is utilised to give legal services to persons who cannot afford an attorney.
A fixed fee agreement is utilised to give legal services to persons who cannot afford an attorney. This form of agreement cannot be utilised to bypass the fundamental client-attorney connection. Fixed fee agreements should be identified as earned on receipt, nonrefundable, or both to prevent any problems.
If these phrases are used, the agreement must follow the ethical guidelines when it is formed and when choosing the account where monies will be placed. If fixed fee agreements already exist, they should be evaluated at the start of the year to ensure they comply with the most recent requirements.
A mandatory written fee agreement must contain the following items:
The fee’s rate or base. This is used to determine the cost that the customer will bear and to prevent misunderstandings.
A list of services that will be provided as part of the contract.
Additional services that are not covered by the agreement may be mentioned with an hourly charge.
Lawyers that use a fixed fee agreement are expected to offer professional representation, to have the abilities required for the matter at hand, to be diligent in their work, and to be completely prepared. It is also required that the customer follows the terms of the agreement, including the allocation of time for calls and meetings.
Oregon Professional Conduct Rule
Lawyers are not permitted to engage into an earned on receipt fee or nonrefundable agreement under Oregon Rule of Professional Conduct 1.5(c)(3) unless the following conditions are met:
The funds will not be held in a lawyer trust account.
Clients have the right to terminate their connection and agreement with the lawyer at any time. As long as the services have not been finished, they may be entitled for a full or partial refund of the sum paid at this point.
A lawyer’s dishonesty or deception is likewise prohibited under Oregon law. Also, although the term “refundable” is permitted, it should be used with care to prevent misconceptions. If a set fee is levied but it is not indicated as nonrefundable or earned upon receipt, the fee is considered client property. The money must be deposited in a lawyer trust account since it is client property. According to Oregon RPC 1.15-1, it can only be removed after the case is finished (c). The amount of the fixed fee agreement must not be considered exorbitant. The cost must be proportionate to the amount of time, staff, and abilities necessary to finish the case.
There should be no terms in the agreement that refer to the charge altering without notice. If there are any changes in the agreement that benefit the lawyer, a clear explanation must be supplied, and it is anticipated to be recognised as fair.
The Benefits and Drawbacks of Fixed Fee Agreements
The following are some of the benefits of fixed-fee agreements:
The attorney has the authority to determine the monetary worth of the service.
At the outset of the case, the client has the option of limiting the cost of legal services.
Fee conflicts are reduced by establishing them in advance.
The representation’s expectations are defined upfront, limiting potential difficulties.
Fees may be charged at the moment the agreement is signed.
Fixed fee agreements may be an effective approach to attract new customers.
The following are some of the disadvantages of fixed-fee agreements:
If the case is more complicated and takes longer than anticipated because the contents of the case were not thoroughly scrutinised at the outset.
After signing and paying the retainer, the client adds key information to the case that are relevant.
The customer violates the contract by demanding services at all times.
The client expects legal guidance to be supplied on a variety of legal issues, not simply the case specified in the agreement.
To minimise the drawbacks, expectations should be established in the agreement and directly with the customer. This might include when they are allowed to call for updates, how many and when meetings will be held, and that any more information provided by the customer will result in additional hours and money.