Under Washington State laws, what is an attorney’s contingency fee? Here’s my point of view.
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WASHINGTON STATE COURT RULES: RULES OF PROFESSIONAL CONDUCT
The Washington State Rules of Professional Conduct (RPC) guide attorneys in their practice of law by, inter alia, regulating their ethical conduct. According to the RPC — Fundamental Principles of Professional Conduct:
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The Rules of Professional Conduct point the way to the aspiring lawyer and provide standards by which to judge the transgressor. Each lawyer must find within his or her own conscience the touchstone against which to test the extent to which his or her actions should rise above minimum standards. But in the last analysis it is the desire for the respect and confidence of the members of the legal profession and the society which the lawyer serves that should provide to a lawyer the incentive for the highest possible degree of ethical conduct. The possible loss of that respect and confidence is the ultimate sanction. So long as its practitioners are guided by these principles, the law will continue to be a noble profession. This is its greatness and its strength, which permit of no compromise.
RPC, Fundamental Principles of Professional Conduct. One of the primary topics under the RPC is “Fees,” and one common type of fee is the contingency fee.
RPC 1.5: THE CONTINGENCY FEE
The contingency fee is regulated by RPC 1.5. Accordingly, an attorney’s fee “may be contingent on the outcome of a matter for which the service is rendered.” See id. The relevant portions of that RPC describe the contingency fee in detail, as follows:
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(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. If a fee is contingent on the outcome of a matter, a lawyer shall comply with the following
(1) A contingent fee agreement shall be in a writing signed by the client;
(2) A contingent fee agreement 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 settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable, whether or not the client is the prevailing party;
(3) upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination; and
(4) a contingent fee consisting of a percentage of the monetary amount recovered for a claimant, in which all or part of the recovery is to be paid in the future, shall be paid only
(i) by applying the percentage to the amounts recovered as they are received by the client; or
(ii) by applying the percentage to the actual cost of the settlement or award to the defendant.
RPC 1.5(c).
CONTINGENCY FEE LIMITATIONS
The contingency fee has limitations. One limitation prohibits lawyers in Washington from entering into contingency fee agreements for domestic relations and criminal defense cases under certain circumstances. The relevant rule follows:
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(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a dissolution or annulment of marriage or upon the amount of maintenance or support, or property settlement in lieu thereof; or
(2) a contingent fee for representing a defendant in a criminal case.
RPC 1.5(d)
CONCLUSION
Under RPC 1.5 (Fees), an attorney may charge a contingency fee: meaning, one that is “contingent on the outcome of a matter for which the service is rendered.” See RPC 1.5. However, an attorney may not charge a contingency fee for domestic relations and criminal defense cases under certain circumstances.
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