Can a lawyer charge interest on a note for the unpaid balance of an agreed fee?

Plain-English summary

A lawyer had agreed with a client to perform stipulated services for a stated sum. The client planned to pay part up front and the remainder over an agreed period, and was willing to secure the balance with a second mortgage on real estate backing a note for the unpaid amount. The lawyer asked whether the note could bear interest.

The committee was aware of no reason such a note could not bear interest under the circumstances, provided the rate was lawful and comparable to what a lending institution would charge the client. A minority suggested that charging interest would be proper only if the fee had already been earned. The majority concluded that qualification was unnecessary in the circumstances described, which contemplated agreed services rendered over a period of time under a fee agreed in advance.

Currency note

This opinion was issued in 1969, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. (The opinion carries a 68-series number under the bar's numbering, but its printed date is February 14, 1969.) It applied the former Canon 12 on fixing the amount of a fee. Fees and costs are now addressed by Rule 4-1.5. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer charge interest on the unpaid balance of a fee?

A: Under this opinion, yes, where the balance is evidenced by a note and the interest rate is lawful and comparable to what a lending institution would charge the client.

Q: Did the fee have to be already earned before interest could run?

A: A minority of the committee thought so, but the majority concluded that qualification was unnecessary in the circumstances described, which involved agreed services over time at a fee fixed in advance.

Background and rules framework

The opinion applied the former Canon 12 on the considerations governing the amount of a lawyer's fee. Fees and the terms of payment are now addressed by Rule 4-1.5 of the Rules Regulating The Florida Bar; the Model Rule analogue is Rule 1.5.

Citations and references

Rules of Professional Conduct:

• Canon 12 [Code of Professional Responsibility; fees now in Rule 4-1.5]

See also

• FL Bar Ethics Op. 69-9: Withdrawing Over Low Appeal Fees

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-68-61/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-68-61-1.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 68-61
February 14, 1969
Advisory ethics opinions are not binding.
A note evidencing the balance of an agreed fee may bear lawful interest comparable to that which would be charged the client by a lending institution.
Canon: 12
Chairman MacDonald stated the opinion of the committee:
A member of The Florida Bar has agreed with a client to perform stipulated services for a stated sum. The client plans to pay a portion of this stated sum, and to pay the remainder over an agreed period. The client is willing to secure the balance of the fee by executing a second mortgage on certain real estate securing the note evidencing the balance of the indebtedness. We are asked whether this note may bear interest.
The Committee is aware of no reason that such a note, under the circumstances stated, may not bear interest provided, of course, that the rate of interest is not only lawful, but is comparable to that rate of interest which would be charged the client by a lending institution. A minority of the Committee suggests that a practice of charging interest would be proper so long as the fee had in fact already been earned. The majority concludes that such a qualification is not necessary in the particular circumstances stated, which apparently contemplate the rendition of agreed services over a period of time with an agreement in advance as to the particular fee for the service.