The Florida Bar
PROFESSIONAL ETHICS OF THE FLORIDA BAR
April 7, 1961
April 7, 1961
The question whether a lawyer on yearly retainer is ethically entitled to collect and pay over to the client the attorney's fees allowed in eminent domain proceedings depends for its answer on several factors, including whether the condemnation proceeding was contemplated by the parties in setting the retainer and whether full disclosure of the lawyer-client fee arrangement has been made to the court.
Canons: 34, 35, 38
Chairman Holcomb stated the opinion of the committee:
A member of The Florida Bar has submitted to the Committee the question of whether a lawyer on a yearly retainer is ethically entitled to collect and pay over to the client attorney's fees allowed in eminent domain proceedings which are required to be paid by the condemnor to the attorneys representing the condemnee.
Mr. Drinker, in his work on Legal Ethics at page 97, under the chapter on “The Lawyer's Obligations to His Client,” says:
Also, whatever he receives from others in the service of his client properly belongs to the client, to be payable to the client or credited against the lawyer's retainer or fee, whether he is employed only for the particular service, on an annual retainer, or on a full-time salary.
And again on page 182, Mr. Drinker has the following comment:
The only situations in which a lawyer may properly permit a client to receive and retain fees paid by others on account of his legal services are when such payments are to reimburse the client in whole or in part for the client's legal expenses actually incurred in the specific matter for which they are paid.
In addition, there is a rather extensive analysis of the entire question of splitting fees with clients on pages 181 through 186.
The comments from the various members of the Committee on this proposition are as follows:
The attorneys' fees provided for by Section 73.11, Florida Statutes, are for the benefit of the client and not the attorney. If the attorney has obligated himself to perform all legal services required by his client it is his duty to perform those services for the agreed compensation. The client should not be permitted to make a profit out of the condemnation proceeding, nor is the attorney entitled to additional fees if the services performed in the condemnation proceedings were in contemplation of the parties when the retainer contract was made. It is suggested that the facts should be disclosed to the Court and the attorneys' fees awarded in the light thereof. If the retainer contract was made without contemplation of eminent domain proceedings, it would be entirely proper for the attorney and client to negotiate a new contract embracing that phase of the attorney's services and the attorney should then be compensated accordingly.
It is suggested that the attorney receive and credit the fees on the yearly retainer fee. If the retainer has been paid in advance, then it would be proper for the attorney to give credit and refund to the extent of the fees awarded in the condemnation action. A retainer as such is only to insure the continued representation by the attorney of the client and services are credited against the retainer. It should not be used as a fixed fee basis, since the amount of work done each year would vary and the total fees paid each year should vary. It would be unethical for the attorneys to perform the services for nothing and then turn the fees over to the land owner.
It would be unethical for the attorney to testify as to his legal services and prove the reasonable value of such services if he is to pay over to his client other than the amount necessary to reimburse the client for the client's legal expenses actually incurred. If the entire amount is to be paid to the client, it is the attorney's duty to divulge the same in the condemnation proceedings and prove and claim only so much of his retainer and the expenses actually attributable to the condemnation proceedings.
Another opinion is that it would not be unethical for the attorney to collect and pay over to his client the attorney's fees paid by the condemnor, provided the end result as between the attorney and client is that the attorney has been reasonably compensated for services performed, including the services in the condemnation action, and the collection of attorney's fees by the client does not leave him with having received the benefit of a substantial amount of legal services for which he is not compensating the attorney. No question of ethics could be raised if the Court and jury are advised of the nature of the retainer agreement and the agreement between the attorney and client that the entire attorney's fees should be paid over to the client.