[Editor’s note: this is another in a series of blog posts discussing how specific ABA Model Prof. Conduct Rules that all lawyers must follow impacts how lawyers can and cannot bill clients.]
In this blog piece, I will discuss how Rule 1.2 Scope of Representation and Allocation of Authority between Client and Lawyer affects how lawyers ethically can bill for their services.
In setting out the allocation of authority between the client and lawyer, Rule 1.2 provides that the big picture items in a representation such as deciding on the “objectives” of the representation including whether to settle or arbitrate or go to trial are the client’s responsibility whereas the details in a representation such as deciding upon the “means” or the steps that need to be taken to carry out the strategy to achieve the objective are the lawyer’s responsibility.
But in deciding upon the steps involved to carry out the objectives of the representation, Rule 1.2 at Comment  provides that “lawyers usually defer to the client regarding such questions as the expense to be incurred.” As a result, lawyers have a duty to discuss the costs of carrying out any proposed strategy with the client and get the client’s consent to the proposed costs.
In an “independent counsel” situation in an insurance context, a lawyer’s statement to a client that the “insurance company will pay my fees and costs” may not be an accurate statement. This would especially be the case if the lawyer has not actually reached an agreement with the insurance company as to the costs of the planned defense. Continue reading