{"id":4495,"date":"2003-06-30T10:30:10","date_gmt":"2003-06-30T14:30:10","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/formerlyknownas\/2003\/06\/30\/new-arizona-rules-reject-the-"},"modified":"2011-08-05T15:00:52","modified_gmt":"2011-08-05T19:00:52","slug":"new-arizona-rules-reject-the-ethics-2000-fee-conspiracy","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/2003\/06\/30\/new-arizona-rules-reject-the-ethics-2000-fee-conspiracy\/","title":{"rendered":"New Arizona Rules Reject the Ethics 2000 Fee Conspiracy"},"content":{"rendered":"

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In a major victory for p\/i clients and foes of the standard contingency fee<\/B>, the Arizona Supreme Court adopted new Rules of Professional Conduct earlier this month that include fee provisions significantly different from those recommended by the ABA’s Ethics 2000 Commission and incorporated in the ABA’s New Model Rules of Professional Conduct.  The new AZ Rules<\/A>, <\/B>were adopted on June 6, 2003, and will be effective as of December 01, 2003.<\/FONT><\/P>
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As I have argued here<\/A><\/B>, <\/B>the Ethics 2000 process constituted concerted action to restrain competition over contingency fee levels. The changes made by the ABA and Ethics 2000 in Rule 1.5 of the Model Rules “make it clear that the ABA has capitulated<\/STRONG> to defenders of the ‘standard’ contingency fee. The approved Rule changes reverse recent attempts within the ABA, and by client advocates across the nation, to apply traditional ethical and fiduciary duties to the use of contingency fees.”<\/FONT><\/P>
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The most dramatic improvement<\/STRONG> in the new Arizona version of Rule 1.5 is its change to the traditional 8th factor<\/STRONG> to be considered in determining the reasonableness of a fee. Rule 1.5(a)(8) no longer has the cryptic phrase “whether the fee is fixed or contingent.” As of Dec. 1, 2003, the factor to be considered is “the degree of risk assumed by the lawyer<\/B>.” Combined with factor (1)’s consideration of “the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly,” it is now clear in Arizona that the reasonableness of a contingency fee will depend on how much risk the lawyer assumed of working extensive hours without adequate pay, and how much skill and exertion it will take to perform the task.   That makes applying a “standard” fee to each client unethical.<\/STRONG><\/FONT><\/P>
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In addition, the new AZ Rule restores the clause “including consideration of the degree of risk assumed by the lawyer at the outset of the representation” to a new Commentary section [3], which discusses the reasonableness standard as applied to contingency fees. The final version of Ethics 2000’s proposal removed the clause, which had been part of previous drafts.<\/FONT><\/P>
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