New York State Bar Association Outlines Rules About Minimum Fees

An attorney may charge a minimum fee for a defined legal service as long as certain conditions are met, according to the New York State Bar Association Committee on Professional Ethics.

A lawyer asked the bar if a proposed “minimum fee” in an engagement letter constituted a “nonrefundable fee” that is disallowed under the rules in the state. The proposed fee was for drafting and finalizing a separation and severance agreement, and the lawyer said the minimum fee would be partly based on a states hourly rate, according to an opinion filed Nov. 17.

The committee said that the proposed retainer letter didn’t contain sufficient facts to determine whether the proposed minimum fee satisfied the requirements of Rule 1.5(d)(4) of the New York Rules of Professional Conduct, which would make it a prohibited nonrefundable fee.

The committee looked at whether the requesting attorney was required to act expeditiously, which might preclude her from providing legal services to other clients, and whether she had the “ability, experience and skill” to negotiate and draft employment-related filings.

The commission clarified that an attorney may charge a minimum fee for a defined legal service as long as the service is performed as agreed, the engagement letter says in plain language how the minimum fee will be calculated, and the minimum fee is reasonable and not excessive.