Fixed Fees Are Earned When Paid in Louisiana

In an interesting opinion decided today (September 24, 2009), the District of Columbia Court of Appeals held that fixed fees “are an advance of unearned fees that belong to the client until earned by the lawyer (unless other reasonable arrangements have been made).” See In re Mance, No. 06-BG-890 (Sep. 24, 2009). As a result, a fixed fee payment must be deposited in the lawyer’s trust account.

Money StackIn stark contrast, under Louisiana Rule 1.5(f)(2) “when the client pays the lawyer all or part of a fixed fee . . . with services to be rendered in the future, the funds become the property of the lawyer when paid . . . . Such funds need not be placed in the lawyer’s trust account, but may be placed in the lawyer’s operating account.” Note, however, if a dispute arises as to a fixed fee, the lawyer must place the amount of the disputed portion in trust until the dispute is resolved. See Louisiana Rule 1.5(f)(5). Also, to the extent any of the fees are “unearned,” the lawyer must return them. Id.

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