Multistate Professional Responsibility Examination (MPRE) Fees, Client Property, and the Lawyer as Fiduciary Syllabus

Fees, Client Property, and the Lawyer as Fiduciary syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Fees, Client Property, and the Lawyer as Fiduciary in Multistate Professional Responsibility Examination (MPRE), not a summary of it.

1. 1

   Legal Fees

   4 topics

   • Reasonableness of fees (Rule 1.5)
     • Factors bearing on reasonableness
     • Communicating the basis or rate of the fee
   • Contingent fees
     • Writing and signature requirements
     • Prohibited contingent fees in domestic relations and criminal matters
   • Fee types and special arrangements
     • Hourly, flat, and fixed fees
     • Advance fees, retainers, and nonrefundable fees
   • Division of fees among lawyers
     • Proportional division or joint responsibility
     • Client agreement and writing requirements
2. 2

   Safekeeping Property and Trust Accounting

   3 topics

   • Holding client and third-party property (Rule 1.15)
     • Separate trust accounts and prohibition on commingling
     • Record-keeping requirements
   • Handling disputed funds and prompt delivery
     • Keeping disputed property separate until resolution
     • Prompt notice and delivery of funds owed
   • Misappropriation and conversion
3. 3

   Other Fiduciary and Financial Duties

   3 topics

   • Acquiring interests adverse to clients
   • Restrictions on the right to practice (Rule 5.6)
     • Noncompete restrictions in partnership and employment agreements
     • Restrictions in settlement of client controversies
   • Fee disputes, arbitration, and quantum meruit

Fees, Client Property, and the Lawyer as Fiduciary flashcards for Multistate Professional Responsibility Examination (MPRE)

25 of 50 cards from the Fees, Client Property, and the Lawyer as Fiduciary deck — real questions with worked answers.

1. Under Model Rule 1.5(a), what is the basic standard governing a lawyer's fees and expenses?

   A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.

2. List several of the factors used to determine whether a fee is reasonable under Rule 1.5(a).

   Time and labor required and difficulty of the question; likelihood the work precludes other employment; fee customarily charged locally; amount involved and results obtained; time limitations imposed; nature and length of the professional relationship; experience, reputation, and ability of the lawyer; and whether the fee is fixed or contingent.

3. When must the basis or rate of a fee and expenses be communicated to a client under Rule 1.5(b)?

   Before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis as previously. Communication is preferably in writing (writing is required for contingent fees).

4. Does Rule 1.5(b) require a written fee agreement for ordinary (non-contingent) fees?

   No. For non-contingent fees a writing is 'preferably' but not required; only the basis/rate must be communicated. A writing IS required for contingent fees under Rule 1.5(c).

5. What three formal requirements must a contingent fee agreement satisfy under Rule 1.5(c)?

   (1) It must be in a writing signed by the client; (2) it must state the method of calculating the fee, including percentages that accrue at each stage (settlement, trial, appeal) and how expenses are handled and whether they are deducted before or after the fee; and (3) at conclusion the lawyer must give the client a written statement of the outcome and the remittance/method of determination.

6. In what two categories of cases are contingent fees prohibited under Rule 1.5(d)?

   (1) Domestic relations matters where the fee is contingent on securing a divorce or on the amount of alimony, support, or property settlement; and (2) representing a defendant in a criminal case.

7. May a lawyer charge a contingent fee to collect past-due alimony or child support already owed?

   Yes. The Rule 1.5(d) ban applies to contingent fees in the underlying divorce/support determination; collecting amounts already due and owing under an existing judgment is generally permitted.

8. What is a 'fixed' or 'flat' fee?

   A single set amount charged for a defined service or matter, regardless of the number of hours actually spent (e.g., $1,500 to prepare a will).

9. What is an 'hourly' fee and what duty accompanies it?

   A fee based on time actually expended at an agreed rate. The lawyer must bill honestly for time actually and reasonably spent, and may not double-bill or pad hours.

10. What is a 'general (classic) retainer'?

    A fee paid to secure a lawyer's availability over a period of time, compensating the lawyer for being on call. It is generally earned when paid and need not be deposited in trust.

11. What is an 'advance fee' (special retainer) and how must it be handled?

    Money paid in advance for services not yet performed. It belongs to the client until earned, so it must be deposited in the client trust account and withdrawn only as fees are earned.

12. What is the rule on 'nonrefundable' retainers?

    A lawyer may not charge a truly nonrefundable advance fee for unperformed work; any unearned portion must be refunded upon termination (Rule 1.16(d)). Labeling a fee 'nonrefundable' does not make it earned.

13. May a lawyer accept property (e.g., stock or an interest in the business) instead of money as a fee?

    Yes, but it may amount to a business transaction with the client subject to Rule 1.8(a) safeguards, and the value must still be reasonable. A lawyer may not acquire a proprietary interest in the litigation itself except a lien to secure fees and a contingent fee.

14. Under Rule 1.5(e), what three conditions must be met to divide a fee between lawyers who are NOT in the same firm?

    (1) The division is proportional to the services each lawyer performs, OR each lawyer assumes joint responsibility for the representation; (2) the client agrees in writing, including to the share each lawyer will receive; and (3) the total fee is reasonable.

15. Is fee splitting between lawyers in the SAME firm subject to Rule 1.5(e)?

    No. Rule 1.5(e) governs only division of fees between lawyers not in the same firm. Splits among members of one firm are not restricted by this rule.

16. May a lawyer share legal fees with a nonlawyer?

    Generally no (Rule 5.4(a)), with limited exceptions: payments to a deceased lawyer's estate, profit-sharing/retirement plans for nonlawyer employees, court-awarded fees shared with a nonprofit that employed/recommended the lawyer, and sale-of-practice proceeds.

17. What is the core requirement of Rule 1.15 regarding client and third-party property?

    A lawyer must hold property of clients or third persons separate from the lawyer's own property, keeping funds in a separate client trust account and other property identified and safeguarded.

18. Where must client funds be deposited under Rule 1.15, and what is the prohibition against commingling?

    In a separate client trust account in the state where the office is located (or as the client/third party consents). The lawyer may not commingle client funds with the lawyer's own funds.

19. What is the only purpose for which a lawyer may deposit the lawyer's OWN funds into the client trust account?

    Solely to pay bank service charges on that account, and only in an amount necessary for that purpose (Rule 1.15(b)).

20. How long must a lawyer keep records of client trust account funds and property under Rule 1.15(a)?

    Complete records must be kept and preserved for a period of (typically) five years after termination of the representation, per the rule and applicable jurisdiction requirements.

21. What is an IOLTA account?

    Interest on Lawyers' Trust Accounts: a pooled trust account for client funds that are nominal in amount or held short-term; the interest is remitted to a state foundation (usually for legal aid). Funds large enough to earn net interest for the client should be in a separate interest-bearing account for that client.

22. Under Rule 1.15(d), what must a lawyer do upon receiving funds or property in which a client or third person has an interest?

    Promptly notify the client or third person, promptly deliver any funds or property the client/third person is entitled to receive, and upon request render a full accounting.

23. How must a lawyer handle funds in the trust account that are DISPUTED between the lawyer and the client (e.g., over a fee)?

    Under Rule 1.15(e), the disputed portion must remain in the trust account until the dispute is resolved. The lawyer may withdraw only the undisputed portion to which the lawyer is entitled and must promptly distribute undisputed portions.

24. If a third party (not the client) claims an interest in funds the lawyer holds, what is the lawyer's obligation?

    The lawyer must safeguard the disputed funds and may not unilaterally disburse them to the client if the third party has a matured legal/contractual claim (e.g., a perfected lien or doctor's lien). The lawyer keeps the disputed amount in trust until the claim is resolved.

25. What does 'prompt delivery' under Rule 1.15(d) require when only part of the funds is disputed?

    The undisputed portion must be promptly delivered to the person entitled to it; only the genuinely disputed amount may be withheld and held in trust.

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