Contingent Fees In Massachusetts

The Massachusetts Supreme Judicial Court vacated the order of a single justice and directed Bar counsel to issue an admonition in connection with charges relating to the attorney’s contingent fee agreements. The attorney operates a high-volume personal injury practice. The court’s opinion summarizes its holding:

“Bar counsel appeals from the decision of the single justice dismissingthe petition for discipline of an attorney. Principally at issue is thepropriety of certain provisions in the attorney’s form contingent feeagreement that go beyond the terms of the model contingent feeagreement set out in the Massachusetts Rules of Professional Conduct.Bar counsel also challenges the attorney’s conduct in misrepresentingthe existence of a statutory lien pursuant to G.L. c. 221, § 50, infailing to notify one client promptly of his receipt of personal injuryprotection (PIP) funds, and in refusing to provide another client’s successor counsel with a statement of his reasonable time and expenses after his discharge by the client.

We conclude that the attorney committed professional misconduct inknowingly misrepresenting on several occasions to insurers theexistence of a statutory lien under G.L. c. 221, § 50, in his favor,and in failing to notify and inform his client promptly about hisreceipt of PIP funds for the client. We further conclude that anadmonition is the appropriate discipline for this misconduct.

In the circumstances of this case, we disagree with bar counsel’sclaims that discipline should be imposed because of the challengedterms of the attorney’s contingent fee agreement. However, looking tothe future, we doubt whether it is appropriate for a contingent feeagreement to contain a provision–as the attorney’s agreement did inthis case–giving a lawyer, on discharge by the client beforetermination of the matter for which representation was sought, a rightto recover an amount greater than the fair value of the lawyer’sservices and expenses up to the date of discharge. In addition, to theextent that a lawyer includes terms in a contingent fee agreement thatmaterially depart from those in the model contingent fee agreementincluded in Mass. R. Prof. C. 1.5(f), as amended, 432 Mass. 1302(2000), [FN1] we conclude that the lawyer should explain those termsspecifically to the client, and should obtain the client’s written consent to them. We referthese issues to the standing advisory committee on the rules ofprofessional conduct.”

The opinion also holds that contingent fee agreement do not implicate Rule 1.8(a)(business transaction with client) rule. The case is In the Matter of the Discipline Of An Attorney, No. SJC-09757, decided April 11, 2008. (Mike Frisch)