Regarding fees, which statement is correct?

• A. No non-refundable fees are permitted, though minimum fee arrangements may be allowed if clearly explained
• B. Non-refundable fees are always permitted to secure services
• C. Minimum fee arrangements are never allowed under any circumstance
• D. All fees must be fully refundable if the client terminates the engagement

Answer: (A)

Fees must be reasonable and clearly disclosed to the client, and you can’t rely on a nonrefundable payment as a blanket rule. The principle is that a lawyer should be compensated for the work performed, and unearned funds should be refundable. A minimum fee arrangement, however, is permissible if it’s explained in writing and understood by the client, because it sets a predictable base for the engagement while still allowing the lawyer to be paid for the work actually done beyond that minimum. The idea is to protect the client’s ability to review and challenge fees while giving the lawyer a fair compensation structure for taking on and handling the matter. The other statements go too far in either allowing nonrefundable fees in all cases or denying the possibility of minimum fee structures, or asserting full refunds of all fees on termination, which isn’t consistent with how reasonable, disclosed fee arrangements are handled.