The State Bar seeks public comment on Proposed Formal Opinion Interim No. 20-0005 (Conversion Clauses in Contingency Fee Agreements).
Deadline: November 17, 2022
Comments should be submitted using the online Public Comment Form. The online form allows you to input your comments directly and can also be used to upload your comment letter and/or other attachments.
The State Bar Standing Committee on Professional Responsibility and Conduct (COPRAC) is charged with the task of issuing advisory opinions on the ethical propriety of hypothetical attorney conduct. In accordance with applicable State Bar policy and procedure, the committee shall publish proposed formal opinions for public comment (See, State Bar Board of Trustee Resolutions July 1979 and December 2004. See also, Board of Trustee Resolution November 2016).
On May 10, 2018, the California Supreme Court issued an order approving 69 new Rules of Professional Conduct, which went into effect on November 1, 2018. Information about the new rules is available here. Proposed Formal Opinion Interim No. 20-0005 interprets the new Rules of Professional Conduct.
Proposed Formal Opinion Interim No. 20-0005 considers:
Under what circumstances, if any, are “conversion clauses” in contingent fee agreements ethically permissible?
The opinion interprets rules 1.2, 1.5, and 1.16 of the Rules of Professional Conduct of the State Bar of California.
The opinion digest states: Conversion clauses are not ethically prohibited per se, but require careful ethical scrutiny, and the circumstances where a conversion clause is ethically permissible are rare. They are ethically prohibited where their use may improperly interfere with important client rights or may violate an attorney’s ethical duties, primarily the client’s right to discharge the lawyer or the client’s right to determine whether to settle and where they would result in an unconscionable fee.
At its July 29, 2022, meeting, and in accordance with their procedures, COPRAC tentatively approved Proposed Formal Opinion Interim No. 20-0005 for a 90-day public comment distribution.
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Committee on Professional Responsibility and Conduct
November 17, 2022
Proposed Formal Opinion Interim No. 20-0005 (Conversion Clauses in Contingency Fee Agreements)