About three weeks ago, the Florida Supreme Court adopted some changes to the state's rules to provide better definitions of some concepts related to fees. See In re Amendments to Rule Regulating the Fla. Bar 4-1.5—Fees &
Costs for Legal Servs., 2015 BL 300826, Fla., No. SC14-2112, 9/17/15.
According to the new text in Rule of Professional Conduct 4-1.5, a “retainer” is a sum paid to guarantee a lawyer's future availability, not payment for past or future legal services, while a “flat fee” is money paid for all legal services to be provided and may be termed “non-refundable.” An “advance fee” is a payment against which the lawyer will bill the client as legal services are provided. Note that what Florida calls "advance fees" is what most other jurisdictions know as a "security retainer."
In addition to the new text of the rule, Florida amended the rule's comment to make clear that a nonrefundable retainer or nonrefundable flat fee should not be held in trust and that advance fees must be held in trust until earned. The comment also says that nonrefundable fees, like all fees, are subject to the
prohibition against excessive fees.
I find it interesting that the Court decided to allow non refundable flat fees. Whether flat fees can be non refundable has been the subject of different (and often confusing) approaches by many courts. See my previous comments on the subject here, here and here.
My own view on this topic is that it is not unreasonable to collect a non refundable flat fee if the task is completed in less time than originally expected. In such a case, the
attorney should be allowed to keep the value of the time saved. If the task is not completed, however, as when a client dismisses the
attorney before the task is completed, the attorney should refund the
portion of the fee that is "unearned."
If that is what Florida has in mind in its new rules, I am OK with it.
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