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July 29, 2003

Professor Continues to Battle New Model Rule 1.5 and Standard Contingency Fees

Filed under: pre-06-2006,Uncategorized — David Giacalone @ 12:45 pm

Lester Brickman, ethics professor at Cardozo Law School, has taken his fight to improve New Model Rule 1.5 and its treatment of contingency fees to the Rule-making authority of each State.  Over the past few months, Prof. Brickman has sent a Letter to each presiding justice urging “you and your fellow justices to decline to adopt the proposed changes to Model Rule 1.5.” (Letter posted at ethicalEsq? by permission of the author)

Brickman is a longtime foe of the use of “standard” contingency fees — because they are frequently unrelated to the risk taken and work performed by an attorney in a particular case, and therefore often overcompensate the lawyer at the expense of the injured client.  In his Testimony to the ABA Ethics 2000, Brickman argued that current ethical standards and ethics opinions concerning the use of contingency fees were universally ignored, and that the new model rule on fees must explicitly require that contingency fees be linked to the lawyer’s risk and must inform clients of their right to be fully informed, so that they could make informed choices among fee options (such as hourly, flat or mixed fees), and negotiate the level of a contingency fee.

Brickman and other consumer advocates (such as your Editor) lost this fight before Ethics 2000.  The Commission instead proposed a Rule 1.5, later adopted by the ABA in its New Model Rules, that — according to Brickman — “trashed fiducial rights in favor of simple self-interest.”   (emphasis added)

To explain his argument in detail, Prof. Brickman enclosed with each Letter a copy of the page proofs of his soon-to-be published law review article, The Continuing Assault on the Citadel of Fiduciary Protection: Ethics 2000’s Revision of Model Rule 1.5, by Lester Brickman, 2003 Univ. Ill.L.Rev. No. 5 (forthcoming).  Brickman notes in the Letter that:

[The Article spells] out in sad detail how the ABA has abused the bar’s self-regulatory status by urging upon courts the elimination of one of the few remaining fiducial fee protections in the codes of ethics. (underscore added)

The battle over the new model rule governing contingency fees is being fought right now across the country, on the state level.  As reported in our Posting 6/30/03, Arizona recently adopted a version of Rule 1.5 that considerably improves upon the Ethics 2000 proposal, while North Carolina became the first state to adopt the new rule without changes.   Your Editor gave his version of the problems with New Model Rule 1.5 in an Open Letter to the FTC (HALT Forum, “Protecting Fees Rather than Injured Clients: The ‘Standard’ Contingency Fee and the ABA,” April 11, 2002).

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