Have Questions? Contact Us.
Since its inception, NYCLA has been at the forefront of most legal debates in the country. We have provided legal education for more than 40 years.
ETHICS OPINION 648-1975 FEES; DISBURSEMENTS; ADDITIONAL CHARGE FOR BOOKKEEPING.
NUMBER 648
QUESTION.
May a lawyer, in billing a client, add a percentage to disbursements charged to defray costs of bookkeeping in connection with such disbursements? If so, must the bill list such additional charge separately? If the answer to either question is in the negative, would it be different if the charge close.lv approximated the bookkeeping cost?
ANSWER.
EC 2-17 states in part:
“A lawyer should not charge more than a reasonable fee, for excessive costs of legal service would deter laymen from utilizing the legal system in protection of their rights. Furthermore, an excessive charge abuses the professional relationship between lawyer and client. On the other hand, adequate compensation is necessary in order to enable the lawyer to serve his client effectively and to preserve the integrity and independence of the profession.”
EC 2-19 states in part:
“As soon as feasible after a lawyer has been employed, it is desirable that he reach a clear agreement with his client as to the basis of the fee charges to be made. Such a course will not only prevent later misunderstanding but will also work for good relations between the lawyer and the client.”
When a lawyer fixes his fee, a number of factors are taken Into account including a fair share of the cost of conducting his office. As long as the total amount of the fee is reasonable in amount there can be no objection to including the bookkeeping and overhead cost of handling disbursements. This can be done either by including it in the fee without designation or by setting it forth on the bill as an extra charge. The disbursements themselves, however , must be stated at their actual or reasonably estimated cost. In view of the fact that an extra charge for handling disbursements is unusual, the practice should be explained to the client at the time of discussion of fee arrangements in order to avoid misunderstanding as to the purpose of the charge.
June 20, 1975