Non-refundable Retainers: a Minefield of Trouble

• Citation: Vol. 73 No. 2 Pg. 0009
• Publication year: 2024
• Pages: 0009
• Year: 2024

Non-Refundable Retainers: A Minefield of Trouble Vol. 73 No. 2 Pg. 9 Rhode Island Bar Journal September/October 2024

October 2024

Jane Howlett, Esq.

Howlett Law, Inc.

Bristol

"The funds paid to the attorney by the client do not belong to the attorney immediately; rather, the attorney must earn the funds for services performed for the client."

A number of attorneys in the State of Rhode Island ask for non-refundable retainers, and often this leads them down the road to the Office of Disciplinary Counsel, a place where attorneys don't want to hear their name mentioned. In this article, I will address the different types of "retainers" as well as outlining the position taken by the Rhode Island Disciplinary Counsel on this issue. Rhode Island Rule 1.5 of the Rules of Professional Conduct states as follows:

(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

(8) whether the fee is fixed or contingent.

(b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client. Where the fee is not fixed or contingent, billings regarding the fees, costs, and expenses shall be provided to the client on a quarterly basis or as otherwise provided in the agreement.

(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of...