Can You Really Have It Both Ways?: Why Flat Fees Should Not Be Considered Earned and Unearned at the Same Time

Abstract

Last month, the Board of Professional Conduct of the Ohio Supreme Court released an advisory ethics opinion discussing the propriety of flat fee agreements. In it, the Board reiterates the principles contained in the Ohio Rules of Professional Conduct on whether a lawyer may enter into an agreement requiring a client to pay a flat fee in advance of representation and whether a lawyer must deposit such a fee into a client trust account. Because these questions are addressed in the applicable Rules of Professional Conduct or their comments, the Opinion does not actually add much to the current state of the law. Unfortunately, however, that state of the law is based on a confusing and indefensible inherent contradiction within the applicable rules.

By simply repeating that confused doctrine without criticizing it, the Board missed the opportunity to take a stand against the wrongheaded state of the law and to propose a much needed change in the applicable rules. As a result, the Board’s opinion merely reiterates a faulty analysis that leads to confusion and defeats the purpose of providing clear guidance to lawyers. This short essay will discuss the issues and will provide an alternative approach to help Ohio lawyers better understand the issues they face when handling flat fees paid in advance.