Opinion #75. Contingent Fees in Certain Divorce Cases

Issued by the Professional Ethics Commission

Date Issued: December 3, 1986

Question

The Ethics Commission has been asked whether counsel undertaking pro‑bono representation in divorce cases would violate the code of Professional Responsibility by charging a fee if the parties owned a marital asset that was sold at the end of the proceeding, presumably yielding proceeds payable to the client previously accepted pro‑bono or quasi‑pro‑bono. It appears from the inquiry that the possibility of paying a fee in this fashion would be disclosed to and accepted by the client at the outset. (A surprise bill to the client would raise questions not discussed in this opinion.) The Committee has also been given the hypothetical case of an attorney in private practice undertaking representation in a domestic relations matter with the understanding that the fee will be paid when a marital asset is sold, but apparently without any understanding that no fee will be charged otherwise.

The question has been posed by an organization engaged in making pro‑bono referrals and not by an attorney directly concerned with the hypothetical case.

Opinion

Rule 8 of the Maine Bar Rules defines “contingent fee agreement” as an agreement “express or implied, for legal service . . . under which compensation, contingent in whole or in part upon the successful accomplishment or disposition of the subject matter of the agreement, is to be in an amount which is either fixed or is to be determined under a formula.” Excluded from the definition are agreements “in any event to pay to the attorney the reasonable value of his services.” Rule 8 expressly prohibits contingent fee agreements “in respect of the procuring of divorce, annulment of marriage or legal separation.” Opinion No. 11 of the Grievance Commission declined to express an opinion whether this prohibition applied to post decree proceedings, e.g., to collect support arrearages.

Rule 8, which was simply a redesignation of former Rule 88 of the Maine Rules of Civil Procedure, thus prohibits any agreed fee for representation in a divorce proceeding, express or implied, that is contingent in whole or in part upon “successful . . . disposition of the subject matter.” Apparently the effect of the proposal described in the question would be to compensate the attorney if, but only if, he or she were successful in obtaining for the client a share in the proceeds of salable marital assets. That must be accounted successful disposition of the subject matter. Consequently, the arrangement described in the question would be a contingent fee within the meaning of Rule 8 of the Maine Bar Rules, and since it would be an agreement in respect of the procuring of a divorce, would be barred by subparagraph (c) of that rule. For a similar conclusion, see Opinion No. 10 of the Grievance Commission dated April 2, 1980.

Because Rule 8 appears to cover the matter fully, we will not discuss whether the described arrangement would amount to acquisition of a proprietary interest in the cause of action or subject matter of litigation, in violation of Rule 3.7(c), if the attorney were not given by agreement a defined share of the asset in question, but merely understood a bill could be submitted in case a sale of the asset generated disposable proceeds.

The inquiring organizations suggest that Rule 3.6(i) “avoiding adverse interest” might be pertinent. Like the question about the applicability of Rule 3.7(c), this suggestion raises the question whether the attorney has actually acquired any kind of property interest as a result of the arrangement described in the question. Based on the limited facts given to the Commission, that would not seem to be the case.

To the extent the inquiring organization seeks advice as to the propriety of supposedly similar arrangements undertaken by individual private practitioners, the Commission declines to respond for the reasons stated in Opinion No. 67.


Enduring Ethics Opinion