Reporter's Explanation of Changes
1. Paragraph (a): Substitute Model Code standard
The current Rule requires that a lawyer's fee be reasonable, but it does not state a corollary prohibition of a fee that is larger than reasonable. The omission thus makes it harder than necessary to impose discipline for excessive fees. The Commission substituted the language of the Model Code prohibition for the current first sentence of (a). No change in substance is intended.
2. Paragraph (a): Add explicit prohibition on unreasonable expenses
Although ethics committee opinions have assumed that lawyers are prohibited from charging unreasonable expenses, as well as unreasonable fees, the current Rule does not say so explicitly. The Commission added language clarifying the lawyer's obligation, in order both to better educate lawyers as to their duties and to facilitate the imposition of discipline, where applicable. No change in substance is intended.
3. Paragraph (b): Require lawyers to communicate fees, scope and expenses in writing
Few issues between lawyer and client produce more misunderstandings and disputes than the fee due the lawyer. The current Rule says that the lawyer must communicate the basis or rate of the fee, preferably in writing. The Commission believes that the time has come to minimize misunderstandings by requiring the notice to be in writing, except where the lawyer will charge a regularly represented client on the same basis or rate or where the fee is de minimis.
4. Paragraph (b): Add scope of representation and expenses to written notice
As a practical matter, a statement about fees is rarely complete without a corresponding statement of what the lawyer is expected to do for the fee. Further, the Commission believes that issues about expenses are often at least as controversial as those about fees. Indeed, clients often do not distinguish between fees and expenses. Thus, proposed paragraph (b) includes statements about the scope of the representation and client responsibility for expenses as well as fees in the requirement of a written agreement. Changes in the basis or rate of the fee or expenses must also be communicated in writing but not changes in the scope of the representation, which may change frequently over the course of the representation.
5. Paragraph (b): Addition of de minimis exception to writing requirement
The Commission is recommending that there be a de minimis exception to the writing requirement. Also, providing such an exception makes clear that there is no requirement that the scope of the representation be communicated in writing when there will be no fee at all, as is the case not only in pro bono matters but also in matters where the lawyer is salaried, e.g., an in-house or government lawyer. The Commission recommends putting an amount in brackets in an acknowledgment that the size of the de minimis exception is a matter that is likely to vary among the states. The Commission is recommending a fairly low amount for the exception on the ground that it is middle and lower income clients who are most in need of the protection offered by this requirement.
6. Paragraph (c): Clarify that contingent fee agreement must be signed by client
The Commission is proposing a number of revisions to the Rules that would require the lawyer to document certain communications or agreements in writing. The Commission believes that it should be clear in all instances what type of writing is required, particularly whether the writing needs to be signed by the client. Certain terms are defined in Rule 1.0, including "writing." Because there are only a few instances in which a client's signature is required, the Commission is recommending that those instances be clearly stated in the text of the Rule. Thus, while the Commission believes that paragraph (c) already requires that a contingent fee agreement be signed by the client, this requirement is now being made explicit. No change in substance is intended.
7. Paragraph (c): Additional notification regarding expenses in contingent fee agreements
Unlike the Model Code, the Model Rules permit lawyers to advance litigation expenses, with repayment contingent on the client prevailing. Nevertheless, lawyers are not required to make such repayment contingent. The Commission believes that clients may be misled without a clear statement, in the contingent fee agreement, that there are expenses for which the client will be liable whether or not the client is the prevailing party.
8. Paragraph (e): Division of fees
The Commission recommends retaining the current text of this Rule, with the sole exception that the client must agree, and the agreement must be confirmed in writing, to the participation of each lawyer, including the share of the fee that each lawyer will receive.
 This Comment is entirely new. It introduces paragraph (a) by stating that lawyers must charge both fees and expenses that are reasonable under the circumstances. It explains that the factors set forth in paragraphs (a)(1) through (8) are not exclusive and that not all factors will be relevant in each instance. It further states the method by which lawyers may properly charge for services performed or incurred in-house, along the lines suggested in ABA Standing Committee on Ethics and Professional Responsibility Formal Opinion 93-379 (Billing for Professional Fees, Disbursements and Other Expenses).
 This Comment has been revised to refer to the new requirements set forth in paragraph (b), including a statement about the nature of the required writing. The last sentence clarifies that when the service provided is brief, prompt submission of a written bill is sufficient to meet the requirements of this Rule. The Commission is proposing to delete existing material in order to streamline the Comment in light of the material that has been added.
 This Comment is entirely new. It confirms that contingent fees, like other fees, are subject to the reasonableness standard of paragraph (a), including consideration of all of the factors that are relevant under the circumstances. It further refers to applicable law, which may impose limitations on contingent fees or require a lawyer to offer clients an alternative basis for the fee. (This is a revision of the last sentence in current Comment , revised to include an additional reference to ceilings on the percentage allowable under law.) It also refers to applicable law that may govern situations other than a contingent fee.
 This amendment to current Comment  eliminates the vague "special scrutiny" language and substitutes a cross-reference to the Rule 1.8(a) requirements for business transactions with a client when a fee is to be paid in property instead of money. Rule 1.8(a) treatment is not stated in absolute terms, but the possibility is strongly suggested. The recent ABA Business Law Section report on alternative billing practices agreed that Rule 1.8(a) treatment should be given to fees paid in stock or property.
 The Commission proposes to delete the next to the last sentence of current Comment  because the statement is merely advisory, given that the requirement of offering an alternative type of fee is not stated or implied in any textual provision. If the contingent fee is reasonable, then lawyers need not offer an alternative fee nor need they inform clients that other lawyers might offer an alternative.
 A number of ethics committee opinions have interpreted the current Model Rule to permit contingent fees in post-decree family law matters, i.e., collecting arrearages that have been reduced to judgment, because such fee arrangements do not implicate the same policy matters that are implicated when fees are contingent upon securing a divorce or on the amount of alimony, support or property order. The Commission proposes adding this new Comment to clarify that this is the intended interpretation of paragraph (d)(1).
 The changes reflect the changes made to paragraph (e). The Commission proposes revising the explanation of "joint responsibility" to entail legal responsibility, including financial and ethical responsibility, as if the lawyers were associated in a partnership. This is the interpretation that has been given to the term according to ABA Informal Opinion 85-1514, as well a number of state ethics opinions.
 This new Comment seeks to eliminate a misunderstanding that might arise about whether the requirements of paragraph (e)(1) must be satisfied when a lawyer leaving a law firm and the firm agree to share some part of a fee to be received in the future. Technically, the future division would be between lawyers who were no longer members of the same law firm. None of the usual reasons for requiring the client's agreement to the arrangement apply to such fee divisions, however, and this Comment is intended to make that clear.
 The proposed change highlights that lawyers must comply with fee arbitration or mediation procedures in jurisdictions where they are mandatory.