collecting “ an illegal or clearly excessive fee .” 17 The rule lists eight nonexclusive factors for considering the propriety of the fee . 18 Applying Rule 1.5 to the facts , the committee was concerned that it was unknown how much money would be raised and , if that amount was substantial , whether the lawyer would receive an unacceptably large fee . The committee stated , “ Without knowing how much was raised , it would therefore be difficult to determine whether or not the fee would be clearly excessive . Add the fact that the inquirer has asked the client to assign any award of attorney ’ s fees to the inquirer , the possibility of a clearly excessive fee is truly an issue .” 19
Under the Rule 1.5 analysis , the committee also was concerned the fee agreement might improperly restrict the client ’ s ability to terminate the representation . 20 Because the fee was considered earned by the lawyer upon receipt , the arrangement “ established a de facto non-refundable retainer , even though the actual amount is unknown .” 21 The committee cautioned that great care is required before accepting non-refundable retainers because “ such a fee arrangement can be clearly excessive if it interferes with a client ’ s ability to meaningfully discharge the lawyer with or without cause .” 22
Under this third inquiry , the committee concluded the fee arrangement would violate Rule 1.5 if it “ is simply an arrangement whereby the fee consists of whatever is raised with no other undertakings .” 23 To avoid these and other difficulties , the committee suggested the fee agreement with the client should address the lawyer ’ s obligation to remain in the case until conclusion of the matter ( or at least until the lawyer ’ s time on the matter equaled or exceeded the lawyer ’ s normal hourly rate ); a requirement that fees collected from crowdsourcing be placed in a trust account maintained under rule 1.15 ; and that the arrangement address duties owed to non-clients . 24
The Philadelphia committee concluded by noting , “ There is nothing inherent in such a plan to suggest that the inquirer in any way is violating any Rule by doing so . 25 However , it [ is ] important to make sure that those who contribute to the crowdfunding not feel that they have been misled in any way .” 26
1 . Phila . Bar Ass ’ n Prof ’ l Guidance Comm . Op 2015-6 , ( December2015 ) available at http :// www . philadelphiabar . org / WebObjects / PBAReadOnly . woa / Contents / WebServerResources / CMSResources / Opinion2015-6 . pdf
2 . See N . D . R . Lawyer Discipl . 1.2 ( B ) “ A lawyer who acts with good faith and reasonable reliance on a written opinion or advisory letter of the ethics committee of the association is not subject to sanction for violation of the North Dakota Rules of Professional Conduct as to the conduct that is the subject of the opinion or advisory letter .”
3 . http :// www . merriam-webster . com / dictionary / crowdfunding
4 . https :// www . fundable . com / learn / resources / guides / crowdfunding-guide / what-is-crowdfunding
5 . Phila . Bar Ass ’ n Prof ’ l Guidance Comm . Op 2015- 6 at 1 .
6 . Id . 7 . Id . 8 . Id . 9 . Id .
10 . ABA Model Rule Prof . Conduct 1.7 cmt . 13 . Please note that for purposes of uniformity the citations in this piece are to the ABA Model Code . The Model Rules quoted here are identical or very similar to the comparable Rules of Professional Conduct in Pennsylvania and North Dakota .
11 . ABA Model Rule Prof . Conduct 1.8 ( f ).
SSTEVEN A . STORSLEE
EXPERIENCED MEDIATION
� 40 years as a civil litigator
� 20 years as a mediator
� Substantial experience in mediating oil field cases
12 . Id . at 2 . 13 . Id .
14 . http :// www . philadelphiabar . org / WebObjects / PBAReadOnly . woa / Contents / WebServerResources / CMSResources / Opinion2015-6 . pdf
15 . Id . 16 . ABA Model Rule Prof . Conduct 1.5 ( a ). 17 . ABA Model Rule Prof . Conduct 1.5 ( a ) ( 1 ) - ( 8 ). 18 . Id . at 3-4 . 19 . Id . at 4 . 20 . Id .
NEW CONTACT INFORMATION
Storslee
Law Firm , P . C .
Phone : ( 701 ) 226-3550 steve @ storsleemediation . com P . O . Box 996 , Bismarck , ND 58502-0996 www . storsleemediation . com
21 . Id . 22 . Id . at 5 ( citing PA Bar Ass ’ n Formal Op . 95-100 ). 23 . Id . 24 . Id . 25 . Id . at 5 . 26 . Id .
FALL 2016 23