The Supreme Court rendered an Opinion in the matter of Attorney Grievance Commission v. Gregory Wayne Jones, AG No.: 1, September Term 2021. In that Opinion the Court expounds at length on the propriety of engagement fees, or as more appropriately defined by the Court, general Retainer Agreements; the use of flat fees; and, the issue of whether fees must be held in Trust or may be deposited into an attorney’s operating account. The Jones case involved a matter in which a lawyer allegedly violated a Conditional Diversion Agreement in addition to encountering a new problem with another client.
Judge Biran, speaking for a unanimous Court, delineates at length the Court’s views on the propriety of engagement fees. An engagement fee is typically charged to compensate the attorney in situations where the acceptance of a matter would preclude the lawyer from accepting other matters on that date, or would require that the attorney engage additional staff to deal with such a complex case. In Attorney Grievance Commission v. Stinson, the Court in a per curium Opinion, expressed great dissatisfaction with engagement agreements and as a result they have fallen into disfavor in Maryland. The Supreme Court in Jones indicated that a general Retainer would function as an engagement fee. The Court sets forth the legitimate basis for charging a general retainer fee, but points out that notwithstanding the fact that the fees from a general Retainer Agreement are earned, and thus, may be placed in a lawyer’s operating account, those funds are nonetheless subject to refund under certain circumstances.
With regard to flat fees commonly used in criminal matters, the Court discussed in detail the issue of when a flat fee is earned, and strongly suggested the use of milestones. The Court even provides a set of “reasonable” milestones for a hypothetical criminal case. In the Courts’ set of milestones, the bulk of the fee is earned at the back end of the case as opposed to the front end. In addition, the Court delineates the type of informed consent required before a lawyer would be able to hold such funds in an operating versus a Trust account.
Anyone who is practicing in the field of criminal law is urged to very closely review Judge Biran’s Opinion as well as the materials he cites, including a number of ethics opinions which are favorably cited by the Court.