Do you know what lawyers and orthodontists have in common?  Well, they both work on retainers.  But retainers for lawyers have just run into serious trouble and if a lawyer tells you his fee or retainer is nonrefundable, you can tell him or her to take a hike.  Several State Bar Ethics Committees have recently announced it’s misleading and unethical for lawyers to characterize a fee or retainer as being nonrefundable.  The old rules allowed nonrefundable retainers provided the fee was fully explained to the client and was not excessive.  The new rules say a lawyer must refund any advanced payment of a fee that has not been earned.  The only exception is where a retainer is intended to insure the attorney is exclusively available to the client and cannot represent the opposing side, such as where a husband retains the best divorce lawyer in town so his wife can’t.  So while orthodontists can still work on retainers, lawyers can’t work and, by the way, the new rules have teeth in them.

THIS IS NEIL CHAYET LOOKING AT THE LAW™

Alaska Bar Association Ethics Committee, Op. 2009-1, May 5, 2009, U.S. Law Week, Vol. 77, No. 48

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