"Nonrefundable" Fee Subjected Lawyer to Discipline
In Cluck v. Commission for Lawyer Discipline, the Third Court of Appeals has affirmed a summary judgment disciplining a lawyer who deposited $20,000 from a client into his operating account rather than his trust account. The fee agreement described the money as "a nonrefundable retainer" against which the lawyer would bill at his hourly rate.
Lawyers considering charging their clients "nonrefundable" fees should study this case closely to appreciate the difference between what the Court calls a "true retainer" and a mere "advance fee." Here, contractual language labeling the money "nonrefundable" was not enough to qualify it as a "true retainer," which the Court defined as a payment "to secure a lawyer's services, and remunerate him for loss of the opportunity to accept other employment" (quoting Tex. Comm. on Prof'l Ethics, Op. 431, 49 Tex. B.J. 1084 (1986)).
