Concept
The Reasonableness Standard
Reasonableness of the fee
Reasonableness of Lawyer Fees
The Reasonableness Standard
Rule 1.5(a) of the Model Rules of Professional Conduct rests on one command: a lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.1 That sentence sets a single standard, reasonableness, and applies it to three acts and two subjects. The acts are agreeing, charging, and collecting; the subjects are fees and expenses. The rule then lists factors for deciding what is reasonable, and the sections after this one take them in turn. Some authorities impose a higher threshold before a fee draws discipline, and the next section turns to those.
The standard is objective. Rule 1.5(a) measures the size of a lawyer's fee for a matter, or a segment of a matter, against a basic, objective yardstick, and it supplies a customary set of factors for applying that yardstick.2 The question is whether the fee is reasonable for the work the matter involved and for what lawyers in the community customarily charge for it. Whether the client was willing to sign, or the lawyer thought the price fair, does not answer it. Each alternative test fails for its own reason. A test built on the client's signature would measure only how much the client understood about legal pricing. A test built on the lawyer's belief would let the person with the financial stake grade his own price. A later section returns to how client consent fits the analysis.
Reasonableness does not mean the lowest price. The court in Wunschel Law Firm, P.C. v. Clabaugh gave a rationale that cuts in both directions. An excessive fee would deter ordinary people from using the legal system to protect their rights, and it abuses the relationship between lawyer and client. Yet adequate compensation is necessary so that the lawyer can serve the client effectively and preserve the integrity and independence of the profession.3 A rule demanding the cheapest price would fail the second concern, and a rule tolerating any price a client accepted would fail the first.
The three verbs matter because they mark three moments at which a fee can go wrong. A lawyer who signs an unreasonable agreement has violated the rule at the signing. A lawyer who bills an unreasonable amount has violated it by charging, even if no payment follows. A lawyer who takes payment of more than the work justifies has violated it by collecting. A price written into a contract therefore does not cure itself, because the prohibition follows the fee through each stage.
The disciplinary cases confirm that a signed agreement offers no shelter. In re Kutner, the court found the reasoning of Greer and Bushman persuasive and agreed that, where an attorney-client agreement fixes an unconscionable fee, the matter is subject to action by the Attorney Registration and Disciplinary Commission.4 The court's word is unconscionable, a harsher threshold that the next section examines. The point here is narrower: the fee's origin in a contract did not remove it from discipline.
The amount did not separate the two lawyers. The match between price, work, and market did.
Passing the reasonableness test does not end the inquiry. A lawyer charging a fee must also comply with any restriction imposed by other law, and a fee that looks reasonable in amount is still improper if charged or collected in violation of a provision regulating fees for particular services.5 Statutory or court-rule limits on the timing and amount of fees in probate matters are the standard example. A lawyer who administers an estate for a fee within the local range, and who did the work to justify it, has still violated the rule if a probate statute caps the fee below that figure. The rule applies the same word, unreasonable, to expenses, which a later section takes up.