Can a lawyer charge a collection agency a contingent fee measured as a percentage of what the agency itself recovers?
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This page answers the general question as of 1986. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
A law firm represented a collection agency that was entitled to 25% of the amount collected, or 50% if the case went to trial. The lawyer's proposed agreement with the collection agency gave the lawyer a 50% contingency fee in whatever amount the collection agency received.
The committee was of the opinion that the proposed contingent fee agreement is not precluded by RPC 1.5, so long as the requirements of that rule are otherwise complied with. The committee did not flag the arrangement as improper in itself; it conditioned its conclusion on compliance with RPC 1.5's other requirements.
Currency note
This opinion was issued in 1986, before the 2006 revisions to the Washington Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer's fee be a percentage of what a collection-agency client recovers?
A: Under this 1986 opinion, yes. The committee concluded the proposed contingent fee, set at 50% of whatever the collection agency received, was not precluded by RPC 1.5.
Q: Was the approval unconditional?
A: No. The committee conditioned its conclusion on the agreement otherwise complying with the requirements of RPC 1.5.
Background and rules framework
RPC 1.5 (Washington's version of ABA Model Rule 1.5) governs lawyers' fees, including the reasonableness of fees and the requirements for contingent fee agreements. The committee applied RPC 1.5 to a contingent fee measured as a percentage of a collection-agency client's recovery and found it was not precluded.
Citations and references
Rules of Professional Conduct:
- ABA Model Rule 1.5 (fees; contingent fees)
- Washington RPC 1.5
See also
- WA Ethics Op. 1025: Contingent Fee in a Civil Forfeiture Case
- ABA Formal Op. 94-389: Contingent Fees
- ABA Formal Op. 93-373: Reverse Contingent Fees
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=135
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
[A law firm represented a collection agency that was entitled to 25% of the amount collected, or 50% if the case went to trial. The lawyer's agreement with the collection agency gave the lawyer a 50% contingency fee in whatever amount the collection agency received.] The Committee was of the opinion that your proposed contingent fee agreement is not precluded by RPC 1.5, so long as the requirements of that rule are otherwise complied with.
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