ABA Formal Opinion 11-458 Explores Modification Nuances.
We would like to thank the Orange County Bar Association’s Professionalism and Ethics Committee for a summary of ABA Formal Opinon 11-458, which is discussed in greater depth in the January 2012 edition of the Orange County Lawyer.
The ABA Opinion does indicate that fee agreement modifications are permissible within certain parameters, as long as the modifications are “reasonable” in nature. (Applies, does it not, to most fee awards?) Reasonableness, in this context, will often depend on whether the lawyer explained the proposed modification to the client, including an explanation that the modified fee does not necessarily need to be paid absent consent. (Again, consent and an opportunity to review, key indicia.) Periodic hourly rate increases are generally permissible if they are reasonable and the client is notified of the increases. (This absolutely is in synch with California law on the subject.) Even modification of an hourly arrangement to a contingency fee arrangement is permissible, again subject to informed consent and getting the deal in writing. (Makes sense, doesn’t it?)
See also the article by Peter H. Geraghty entitled, “New ABA ethics opinion: Modification of fee agreements.”