Can a non-client who paid a retainer for a client's benefit get back the unused portion of that retainer?

Plain-English summary

The committee was asked whether a non-client who paid a retainer to a lawyer for the benefit of a client may obtain a refund of the unused portion of that retainer. The committee was of the opinion that, under the circumstances, the non-client is entitled to a refund because the money belongs to the non-client.

The committee read the facts as showing that the payor was helping to pay the lawyer for services rendered, not gifting the funds directly to the client. Because the funds are trust funds, and their ownership remains the payor's property until earned by the lawyer, the committee concluded the lawyer is obligated under RPC 1.14 to return the unused funds to the payor. The committee pointed to RPC 1.14(b)(1), which requires prompt notice of receipt of funds and prompt delivery of funds the recipient is entitled to receive.

Currency note

This opinion was issued in 1994, before the Washington State Bar Association's adoption of the 2006 revisions to the 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 Treat this page as historical context, not current guidance.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: Who is entitled to the unused part of a retainer paid by someone other than the client?

A: The committee said the non-client payor is entitled to a refund, because under the circumstances the money belongs to the payor.

Q: Why didn't the funds belong to the client?

A: The committee said nothing in the facts showed the payor was gifting the funds to the client; the payor was helping to pay the lawyer for services rendered, so the trust funds remained the payor's property until earned.

Q: What rule requires the lawyer to return the funds?

A: The committee relied on RPC 1.14, citing RPC 1.14(b)(1)'s requirement to promptly notify of receipt of funds and promptly deliver funds the recipient is entitled to receive.

Background and rules framework

The opinion applied RPC 1.14 (Washington's safekeeping-of-property and trust-account rule, corresponding to ABA Model Rule 1.15 under Washington's pre-2006 numbering). The committee treated ownership of the trust funds as remaining with the third-party payor until the lawyer earned them, which made the unused balance refundable to the payor rather than the client.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.15 (safekeeping property); Washington RPC 1.14, 1.14(b)(1)

See also

• WA Ethics Op. 1032: Trust Funds Received by a Lawyer as Fiduciary
• WA Ethics Op. 1029: Trust Funds for Multiple Clients With No Distribution Instructions

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=656

Original opinion text

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

Advisory Opinion: 1575
Year Issued: 1994
RPC(s): RPC 1.14
Subject: Disposition of unearned fees paid by a nonclient held in lawyer's trust account

You ask whether a non-client who has paid a retainer to a lawyer for the benefit of a client, may obtain a refund of the unused portion of that retainer.

The Committee was of the opinion that the non-client, under the circumstances is entitled to a refund because the money belongs to the non-client. RPC 1.14 requires an attorney to promptly notify a client of the receipt of funds (RPC 1.14(b)(1)) and "promptly pay or deliver to the client as requested by a client the funds . . . In the possession of the lawyer, which the client is entitled to receive." There is nothing in the facts presented which indicates that the payor was gifting the funds directly to the client. Rather, third party/payor was helping to pay the lawyer for services rendered. Because the funds are trust funds, and the ownership of those funds are the property of the payor until the funds are earned by the lawyer, the lawyer is under an obligation pursuant to RPC 1.14 to return them to the payor.