$2,500 Minimum Fee Earns IA Lawyer a 30-Day Suspension

An Iowa criminal defense lawyer with a $2,500 minimum fee was suspended for 30 days. After two weeks and only 3.7 hours of work, the state dropped the case when federal authorities filed similar charges.

A $2,500 flat fee (or an availability retainer, for that matter) is not necessarily unreasonable, even if it only results in 3.7 hours of work. A minimum fee — meaning the lawyer wanted to bill by the hour but get at least $2,500, no matter what — is another story.

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  • Harry

    About 20 years ago we had a Florida Bar president who practiced family law. His non-refundable retainer was $10,000.00. He announced this in “The Florida Bar Journal” and made no bones about it. He seemed to recommend the practice. A partner in the firm I worked for told me that he once took over a case where the future Bar president had only filed an answer. The client asked him to try and get a partial refund of the $10,000 retainer. The future Bar president flatly refused to refund a dime. His reply “That’s my money. That’s the deal.” I don’t believe he was ever disciplined. Guess it pays to have friends in high places.

    Frankly, in this day and age of big firm fees of $600 an hour and up and PI fees runing to the many thousands of dollars per hour, I have no problem with a lawyer who charges a non-refundable retainer. Where are the Bar disciplinary authorities when this guy gets stiffed by clients after the $2,500 runs out? They bemoan the lack of professionalism while making it difficult for the average lawyer to do anything but scramble to bill as many hours as possible to make a living. A little noblesse oblige was possible when everyone charged the same minimum fee and you got .5% of a house sale or business deal. The Bar disciplinary authorities can’t have it both ways.

    • I think this lawyer’s problem was the way he structured his retainer. I think he could have called all or a portion of that money an availability retainer, for example, and it would have passed muster.

      In other words, if the client isn’t buying anything with that minimum, then it’s not an appropriate fee.

  • It’s only another story in Iowa. I find that decision bizarre. There’s nothing per se unreasonable about a minimum fee. We don’t have the retainer agreement from the Iowa case, but reading the decision closely, it looks like the attorney did not end up doing anything at all for the money – he entered an appearance, but the dismissal may have come without the lawyer doing any real work. Getting paid for doing nothing can cause problems.

    It is a reminder to know the laws of your jurisdiction regarding advance and flat fees. It’s one area that varies substantially from place to place.

    The lawyer also represented himself. You can see where that got him.

  • NC

    I agree with Sam. Semantics?

  • shg

    In NY, non-refundable fees have been held unethical. In re Cooperman, 83 N.Y.2d 465, 633 N.E.2d 1069, 611 N.Y.S.2d 465 (1994). The burden on the attorney to comply with the State’s DRs isn’t excused because some clients stiff their lawyers.

    Frankly, I disagree with Cooperman and think that a lawyer should be capable of contracting whatever terms he requires in accepting a matter, but since the courts disagree, that’s life. On the other hand, with some semantics by calling it a general retainer (or, as Sam calls it, an availability fee), it’s suddenly ethical again. Whatever makes the judges happy.