OBA Ethics Counsel
Ethics Opinion No. 275
Adopted July 27, 1973
(1) When the attorney for the plaintiff has been paid a retainer fee by the client, and then in the petition requests an order for temporary attorney fees to be paid by defendant, should plaintiff's attorney advise the court that plaintiff has paid him a retainer for instituting the proceedings?
(2) In the event the attorney for the plaintiff has been paid a retainer for instituting the proceedings, and thereafter the defendant pays the amount of temporary attorney fees as ordered by the court, is there any obligation on plaintiff's attorney to refund to plaintiff the retainer?
It is apparent from the wording of the two questions set out above that both have reference to situations where a court having jurisdiction in a divorce proceeding orders the payment of "temporary" attorney fees by defendant. It is therefore necessary to examine the nature and status of such orders under the applicable Oklahoma law. 12 O.S.1971, § 1276, provides in pertinent part as follows:
"After a petition has been filed in an action for divorce and alimony, or for alimony alone, the court, or a judge thereof in vacation ... may ... make such order relative to the expenses of the suit as will ensure an efficient preparation of the case ...."
Under this provision, the Oklahoma Supreme Court has held that the trial court is empowered to order the payment of "reasonable and necessary" temporary attorney's fees. Burr v. Burr, 207 Okla. 357, 249 P.2d 722 (1952).
It therefore appears that under the quoted statutory provision, the court is required to make a determination as to the amount of money which will be required to permit a plaintiff properly to prepare her case. At the point of time in question, the court is not purporting to finally determine the amount or allocation of legal fees and expenses between the parties.
The Committee is not aware of any previous opinion by it which would control this question. It is therefore necessary to resort to the Code of Professional Responsibility and the opinions of the Standing Committee on Professional Ethics of the American Bar Association interpreting the Code, as well as its predecessory [sic] Canons of Professional Ethics.
A lawyer should not charge more than a reasonable fee, Ethical Consideration (hereinafter cited "EC") 2-17, and the determination of a reasonable fee requires consideration of all relevant circumstances. EC 2-18. It is also most desirable that a lawyer should have a clear agreement with his client as to the basis of the fee charges to be made. EC 2-19.
More specifically, Disciplinary Rule 2-106 (a) provides that "a lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee."
In Wise, Legal Ethics 242 (2d ed. 1970), the pertinent considerations are summarized as follows:
"In summary, a lawyer is in a fiduciary relation to his client and, in fixing fees, he must make a full disclosure of all facts having a bearing on the fairness of the fee and be guided by the canons in dealing honestly and fairly with his client. A lawyer is an officer of the court and where the court has an interest in the fixing of the fee, a lawyer must conduct himself accordingly."
Earlier, the author cites more specific instances where this rule would be applicable:
"When a lawyer seeks a fee from the court in a matter in which a court has an interest such as a court assignment to serve indigent persons, a guardian case, executors, administrators, trustees, curators of incompetents, and the like, and indeed in any situation in which an application must be made to a court for a fee, such as reorganizations and receiverships, the attorney must make a complete disclosure of all the circumstances. He must disclose the nature and content of the agreement for fees, if any, whether or not he received or will receive compensation or other direct or indirect benefits of any kind from the client or from others, and any other facts which have a bearing on the propriety of the compensation he seeks." Id. at 241-42.
Although no formal ABA Professional Ethics Committee opinion has been found dealing with this issue, in Informal Opinion No. 1013, issued February 19, 1968, the case was presented of a contested divorce action where the wife retained an attorney who stated that his fee for handling the case would be $500, which she then paid to him. Thereafter, when the case was heard by the court, the judge awarded the wife alimony and directed the husband to pay the attorney for the wife a fee of $500. The husband paid $500 to the wife's attorney as directed by the court, and the question was presented of whether the wife's attorney was required to return the $500 which he had earlier been paid by her. The Committee stated that its answer would be controlled by whether the court's order determined that the total compensation of the attorney should be only $500. In such case, the attorney would be ethically obligated to refund the $500 to the wife. However, the Committee went on to state as follows:
"Even if the Court's intention is not clear, it is our opinion that the attorney would be obligated to refund $500.00 to her, unless there was an actual agreement between him and his client that he would retain any amounts received by him from the husband and would not be obligated to refund to her what she paid. Obviously, of course, the attorney would be entitled to any amount recovered from the husband for the wife's attorney fees in excess of what fee she had paid."
In the ABA Committee's earlier Informal Decision No. C733, issued March 12, 1964, the situation was presented of the defense of an indigent whose mother had previously paid the lawyer fees totaling $1,060. However, the attorney also submitted a request to the court for a fee for representing the defendant as an indigent, and the court ordered payment of $420 to the lawyer. The Committee noted that the attorney did not state in his request for an opinion whether he had informed the mother of the defendant that he would be allowed a fee by the court for representing the defendant. The Committee stated:
"Utmost frankness is required of an attorney when he applies for allowance of attorney's fees and also in his dealings with clients in money matters.
"We think that you should have fully informed the court what sums you had received and what expectation you had for further compensation. You should also, if you did not, inform the mother of the defendant and the common-law wife of the defendant that you would make application to the court for allowance of attorney's fees."
In Opinion No. 369, issued May 4, 1936, by the Ethics Committee of the Association of the Bar of the City of New York, it was held that an attorney filing for alimony and counsel fees in a divorce action must inform the court fully about any fee already received from his client. The Committee also stated that while a lawyer retained by a wife in a divorce action may ask her for an attorney's fee and necessary disbursements prior to instituting the action, before accepting the fee he should inform her of the law concerning the allowance of counsel fees against the defendant in such cases.
Applying the Ethical Considerations discussed above, we conclude as follows with respect to the first question. It is the court's intention and purpose in ordering the payment of temporary attorney's fees to ensure the availability of sufficient funds to permit the proper preparation and presentation of the client's case. The court should therefore be fully informed by the attorney of the amount of all fee and cost advances already received by the attorney from any source for his representation of his client. Only then can the court arrive at a reasonable judgment as to the amount of any additional temporary fees which might appropriately be allowed to ensure that the lawyer is able to properly prepare and prosecute his client's case. Or, if an appropriate showing is made, the court may determine that the client's financial condition is such that the other party should be required to bear the entire amount of any temporary fees with any amounts previously advanced to be returned to the client.
With reference to the second question, if the attorney has complied with his obligation to reveal to the court the amount of any retainer which he has already received prior to the allowance of the temporary attorney's fee, then the order would presumably state whether the temporary fee allowed was in addition to that already collected, or whether it was intended to constitute the entire temporary fee to the attorney, in which latter instance the attorney should refund the original retainer to the client. If the court's order is not clear in this regard, a supplementary order clarifying its intention should be obtained, or the attorney should assume that the amount allowed was intended to constitute the entire temporary compensation for his services, and the retainer should be refunded to the client.
In summary, whenever an attorney invokes the jurisdiction of a court in a domestic relations matter to order the payment to him of a fee which is intended to be reasonable compensation, on a temporary or interim basis, for his services to be rendered in the preparation and trial of the case, the attorney is obligated to make known to the court the existence and amount of any compensation previously received by him from his client.