Are flat fees allowed in Washington, where should a flat fee be deposited, and what if the work isn't finished?

Plain-English summary

The inquirer asked whether flat fees violate the Rules of Professional Conduct, into what account a flat fee should be deposited, and what guidance applies when a client has paid a flat fee but the lawyer did not complete the agreed work.

The committee concluded that a flat-fee agreement does not violate the Rules of Professional Conduct. It noted that, as with any fee, a flat fee must be reasonable as required by RPC 1.5, and gave as an example that, on an early termination of the relationship before the agreed work is completed, the agreed flat fee may be unreasonable.

On where to deposit a flat fee, the committee cited Formal Opinion 186, which provides in part that any fee the client has agreed is not refundable and is earned upon receipt for handling the client's case shall not be deposited in the lawyer's trust account.

Currency note

This opinion was issued in 2001, 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, including the treatment of advance fees and trust-account deposits. Treat this page as historical context, not current guidance.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: Do flat fees violate the ethics rules?

A: No. The committee concluded that a flat-fee agreement does not violate the Rules of Professional Conduct, so long as the fee is reasonable under RPC 1.5.

Q: Where does a nonrefundable flat fee get deposited?

A: The committee cited Formal Opinion 186 for the point that a fee the client has agreed is nonrefundable and earned upon receipt is not deposited in the lawyer's trust account.

Q: What if the lawyer does not finish the agreed work?

A: The committee said that, on an early termination of the relationship before the agreed work is completed, the agreed flat fee may be unreasonable.

Background and rules framework

The opinion applies Washington RPC 1.5 (fees; the requirement that a fee be reasonable; corresponding to Model Rule 1.5) to flat fees, and relies on the prior Formal Opinion 186 for the trust-deposit point. The opinion reflects Washington's pre-2006 rule numbering.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 / Washington RPC 1.5 (fees; reasonableness)

Other opinions cited:

• WSBA Formal Opinion 186: a fee the client agrees is nonrefundable and earned upon receipt is not deposited in the trust account

See also

• WSBA Ethics Op. 1838: Nonrefundable Flat-Fee Retainer vs. Advance Deposit
• WSBA Ethics Op. 1347: Nonrefundable Retainers Not Per Se Unethical
• WSBA Ethics Op. 1957: Client Trust Funds Must Be Insured

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1208

Original opinion text

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

Advisory Opinion: 1966
Year Issued: 2001
RPC(s): RPC 1.5; Formal Opinion 186
Subject: Deposit of flat fees; refund of flat fees

The inquirer asks whether flat fees violate the Rules of Professional Conduct and into what account should a flat fee be deposited. The inquirer also asks for ethical guidance when a client has paid a flat fee but the agreed legal work was not completed by the lawyer.

The committee opined that a flat fee agreement does not violate the Rules of Professional Conduct. As with any fee, a flat fee must be reasonable as required by RPC 1.5. For example, in the event of an early termination of the lawyer-client relationship before the agreed legal work has been completed, the agreed flat fee may be unreasonable. Finally with regard to deposit of a flat fee, Formal Opinion 186 provides, in part, that any fee paid to a lawyer that the client has agreed is not refundable and is earned upon receipt for handling the client’s case shall not be deposited in the lawyer’s trust account.