What NOT to Put In A Retainer Agreement

As we at MyShingle have said many times, a retainer agreement is one of the most important tools that we lawyers have to protect ourselves from unscrupulous or troublesome clients.  It should be obvious though that lawyers can’t use the retainer agreement to protect themselves by cutting off their clients’ rights to file a grievance.  And yet, as reported in  Legal Ethics Panel Votes to Disbar Richard Lee, Rob Perez, Star Bulletin (2/25/05), that’s what a Hawaii attorney did in at least 160 of his retainer agreements – and then tried to justify his action by claiming that the bar’s prohibition of this practice constituted unjustified intervention in fee practices, tantamount to price fixing.

According to the article, attorney Richard Lee (also a former state judge), included a standard provision in retainer agreements that required clients to pay Lee $2000 if the disciplinary committee became involved in a fee dispute before an attempt was made to resolve the dispute via arbitration.  The bar believed that the purpose of the provision was to intimidate clients from filing an ethics action against Lee.  Apparently, Lee kept the provision in his retainer agreements for at least a year after the bar ordered it removed.

It’s hard to imagine how an attorney could believe that a provision in a retainer agreement cutting off clients’ rights to file an ethics complaint would ever withstand scrutiny.  And it’s even harder still to imagine that an attorney would keep the provision in after receiving warning from the bar.  But Lee apparently tried to defend his retainer agreement, saying (according to the article), that the bar’s interference in fee disputes is unwarranted and amounts to price fixing.

There’s so much wrong with Lee’s retainer agreement that I hardly know where to begin.  The agreement attempts to extract an unreasonable $2000 fee, punishes clientsfor exercising legal rights and places the attorney’s interest over that of the individual client as well as the public at large, which is entitled to learn about a lawyer’s unethical actions through the grievance process.  The only lesson here is that if you think Lee’s retainer agreement is appropriate, then you should probably leave the legal profession now, while you can do so voluntarily – because with judgment like that, it’s only a matter of time before you’ll be ordered to go.