Conflict and Solidarity: The Legacy of Evans v. Jeff D.

Reprinted from

Volume 17, Number 3 Spring 2004

THE GEORGETOWN JOURNAL OF

LEGAL ETHICS

Conflict and Solidarity: The Legacy of Evans v. JeffD.

Daniel Nazer

NOTES

Confct and Solidarity: The Legacy of Evans v. Jeff D.

DANIEL NAZER*

Suppose that you are a lawyer for a small public interest organization. Youhave just defeated a summar judgment motion in your biggest case and youthink that your opponent wil finally be interested in negotiating a goodsettlement. Soon your opponent makes an offer that includes all the injunctiverelief your clients sought. There is a problem, however. The offer is conditioned onyour client waiving any clai to statutory attorney's fees. You have been workigon ths case for two years and a fee award could provide much neeed financial relieffor your cash-strapped employer. Do you advise your clients to accept the offer?

Suppose instead that the case involved monetary damages. Rather than

conditioning settlement on a complete fee waiver, the defendant offers to pay$400,000 dollars to settle the case. The defendant tells you that he doesn't carehow you divide the money between fees and relief for your clients. How shouldyou respond to this offer?

After the SupremeCourts decision in Evans v. Jeff D., public interest lawyersmust be prepared to face situations such as these.l In Jeff D., the Supreme Courtheld that defendants may ask a plaintiff to waive his or her right to statutoryattorney's fees as a condition of a settlement offer? The Court also concluded thatit is acceptable to conduct simultaneous negotiation of attorney's fees andliabilty on the merits? This leaves plaintiffs' lawyers vulnerable to fee-related

conflicts of interest. The attorney's duty to her client suggests that she shouldcounsel him to accept any offer that includes sufficient relief on the merits. If theoffer is conditioned on a fee waiver then the attorney wil miss out on a fee awardif the client follows her advice. Moreover, even without a fee waiver request, ifthe defendant is solely concerned with minimiing overal liabilty, then any increasein a fee agreement may come at the cost of decreasing the damages for the client.4

* J.D., Yale Law School (expeted 200). I would like to thank Professor Le Brilmayer for helpful advice andcomments. I would also like to thank the busy public interest lawyers who generously partcipated in this study.

i. Evans v. Jeff D., 475 u.s. 717 (1986).

2. See id. at 741-43.3. See id. at738 n.30.4. See Prandini v. Natl Tea Co., 557 F.2d 1015, 1020 (3d Cir. 1977).

499

500 GEORGETOWN JOURNAL OF LEGAL ETHICS (VoL. 17:499

Many commentators have argued that Jeff D. would frustrate the policy of theCivil Rights Attorney's Fees Awards Act of 1976 ("Fees Act").s In paricular,commentators have claimed that Jeff D. wil discourage attorneys from acceptingcivil rights cases and wil cause plaintiffs' attorneys to regularly miss out oncollecting statutory attorney's fees.6 Empirical research, however, suggests thatJeff D. did not have as dire an effect as was anticipated.?

This Note considers the practical and ethical consequences of JeffD. I focus onthe challenges faced by public interest attorneys in the non-profit sector. As theyare usually unable to charge fees, these attorneys are most vulnerable to feewaiver requests.s The Note is divided into three parts. Part I reviews Jeff D. indetaiL. Part II considers the options that Jeff D. left open for public interestlawyers. I argue that some of these options are in tension with ethical rules pro-tecting the client's control of litigation. Thus, lawyers pursuing these strategiesmust exercise considerable care to avoid breaching ethical duties to their clients. Iconsider ways in which bar associations and cours can regulate attorney behaviorto ensure ethical conduct while protecting lawyers' abilty to pursue statutory fees.

Part II reviews the results of structured interviews conducted with ten publicinterest lawyers in the non-profit sector. These lawyers are from diverse regionsand practice areas.9 The interviews examined how public interest lawyersactually respond to fee-related conflicts and whether such conflicts cause publicinterest lawyers significant ethical and financial difficulties. I found that publicinterest lawyers have developed some common techniques for responding to fee. related conflicts. The main strategies are careful client selection and "clienteducation." First, the attorney selects clients who are sympathetic to the overallgoals of the attorney's organization. Second, the attorney explains how importantfee awards are to the continuing success (or even existence) of the lawyer'sorganization. Clients wil then be sympathetic to the pursuit of fee awards. Thisapproach has mitigated the worst effects of JeffD.

5. See, e.g., Alan B. Morrson, Must the Interests of the Client Always Come First?, 53 ME. L. REv. 469, 478

(2001); Note, Fee as the Wind Blows: Waivers of Attorney's Fees in Individual Civil Rights Actions Since Evansv. Jeff D., 102 HARV. L. REV. 1278, 1292-94 (1989) (arguing that, without increased vigilance from district COUltjudges, feilD. wil lead to aggressive and bad faith tactics from the defendants' bar); Randy M. Stedman, Note,Evans v. Jeff D.: Putting Private Attorneys General on Waiver, 41 VAND. L. REV. 1273 (1988) (arguing that alegislative response is needed to prevent feilD. from imperiling plaintiffs' abilty to vindicate their civil rights).

6. See, e.g., Morrson, supra note 5, at 478.

If I know that the defendant at the end can offer my client everything, and I have no choice as anethical lawyer but to agree to that settlement and lose all of my fees, I know how to answer thequestion when I am asked to take on such a case. I wil not do it.

Id.7. See discussion infra Part II; Julie Davies, Federal Civil Rights Practice in the 1990's: The Dichotomy

Between Reality and Theory, 48 HASTINGS LJ. 197,211-22 (1997).

8. See Davies, supra note 7, at 216.9. See the attached Appendix for a description of the interview methodology and a brief description of each

interviewee.

2004) THE LEGACY OF EVANS V. JEFF D. 501

i. EVANS V. JEFF D.

A. BACKGROUND

In the United States, the default rule is that the prevailing party in not entitledto collect attorney's fees from the 10ser.lO Exceptions to this default rule werevirtually non-existent until the late 1960s.11 Since then, Congress has includedfee-shifting provisions in a variety of statutes. Such provisions are found in civilrights laws, employment laws and environmental laws, among others.12 Feeawards are intended to promote the practice of law in the public interest.13

When a case goes to judgment, the court wil calculate the attorney feeaward.14 This means that a lawyer is unlikely to face any difficult ethicalquestions after judgment is entered. After judgment, the attorney can advocatevigorously for a large fee award without endangering the relief that has alreadybeen awarded to his or her client. Fee-related conflicts might arise in settlementnegotiations, however. Prior to judgment, the parties usually try to settle both theissue of relief for the plaintiff as well as the fee award.

is Defendants pursue this

strategy because they are concerned with their total liabilty and fees can be asignificant component of liabilty.16 Plaintiffs' lawyers can ask the defendant toleave the fee award to the court, but in practice defendants are very reluctant to dothis.

I? Thus, settlement usually requires that parties simultaneously negotiate

both fees and relief. This generates potential conflicts of interest between

10. See, e.g., Buckhannon Bd. & Care Home, Inc. v. W. Va. Dept. of Health & Human Resources, 532 U.S.598, 602 (2001). This default rule is often called the "American Rule." See id. A system of automaticfee-shifting is called the "English Rule." See Herbert M. Kritzer, Legal Fees: The English Rule, A.B.A. 1., Nov.1992, at 54.

II. See Evans v. Jeff D., 475 U.S. 717, 746 (1986) (Brennan, J., dissenting).12. See,e.g., 42 U.S.c. § 1988 (2003) (from the Civil Rights Attorney's Fees Awards Act of 1976)

(hereinafter Fees Act); 29 U.S.C. § 216(b) (2003) (from the Fair Labor Standards Act) (hereinafter FLSA); 42U.S.c. § 7604(d) (2003) (from the Clean Air Act). State statutes often have similar provisions. See, e.g., N.Y.LAB. LAW § 198(1-a) (Consol. 2003).

13. See, e.g., Newman v. Piggie Park Enter., 390 U.S. 400, 402 (1968).14. The court is usually given discretion over whether to award fees. See, e.g., 42 U.S.C. § 1988 (2003); 42

U.S.C. § 7604(d) (2003). Sometimes statutes say that the court shall award attorney's fees to the prevailingplaintiff. See 29 V.S.C. § 216(b) (2003).

15. See, e.g., Prandini v. Natl Tea Co., 557 F.2d 1015, 1020 (3d Cir. 1977).16. This wil be paiticularly true when the fee award is significantly more than damages. See, e.g., Rivera v.

Riverside, 763 F.2d 1580, 158 i -83 (9th Cir. i 985) (total liabilty of $245,456.25 with only $33,350 awarded indamages); Copeland v. Marshall, 641 F.2d 880,887,891 (D.C. Cir. 1980) (en bane) ($160,000 liability for feesfor $33,000 damages).

17. Interviewees reported that they regularly ask defendants to settle the merits first and then allow the courtto determine the fee award. Defendants rarely, if ever, accept this suggestion. See Telephone Interview withAttorney i (Oct. 3, 2002) (on file with author); Telephone Interview with Attorney 2 (Oct. 7, 2002) (on file withauthor); Telephone Interview with Attorney 3 (Oct. 8,2002) (on file with author); Telephone Interview withAttorney 4 (Oct. 10, 2002) (on file with author); Telephone Interview with Attorney 5 (Oct. 15 2002) (on filewith author); Telephone Interview with Attorney 6 (Oct. 16, 2002) (on file with author); Telephone Interviewwith Attorney 7 (Nov. 1,2002) (on file with author); Telephone Interview with Attorney 8 (Nov. 13,2002) (onfile with author); Telephone Interview with AttOiney 9 (Nov. 13,2002) (on file with author). One attorney had


plaintiffs and their counseL. If defendants are concerned with total liabilty then

any increase in fees may come at the expense of reduced relief on the merits.Similarly, improvements in relief on the merits may come at the expense of alower fee offer. This leads to a conflict of interest as clients do not necessarilyshare their attorneys' interest in maximizing the fee award.

Prior to Jeff D., the United States Courts of Appeals were divided on how toapproach these fee-related conflicts of interest. The Ninth and Third Circuitsdisapproved of the simultaneous negotiation of fees and merits.

is Other Courts of

Appeals allowed paries to negotiate fees and merits together.19 In Prandini v.National Tea Co., the Third Circuit expressly prohibited simultaneous negotia-tion?O The court stated that "(t)his would eliminate the situation. . . having, inpractical effect, one fund divided between the attorney and client.,m The courthoped that this would reduce the conflict between attorney and client and helpprevent "sweethear" contracts.22 In contrast, the Distrct of Columbia Circuitallowed at least some simultaneous negotiation of fees and merits.23 The courtnoted the importance of encouraging settlement and the difficulty of monitoringsettlement negotiations between private parties?4

The issue of fee-related conflicts also divided bar association ethics commit-tees. The Association of the Bar of the City of New York ("NYC Bar") prohibitedsimultaneous negotiation of relief on the merits and fees.2s The District ofColumbia Bar ("D.C. Bar") allowed some simultaneous negotiation but prohlb-ited defendants from asking plaintiffs to completely waive their rights to statutoryfees.26 The State Bar of Georgia ("Georgia Bar") rejected both positions andallowed all simultaneous negotiation of fees and relief on the merits??

The bar associations, like the courts of appeals, were divided over how toresolve the tension between encouraging settlement and reducing the potentialfor conflicts of interest. The NYC Bar emphasized the link between fee waiversand conflicts of interest.2s The NYC Bar argued that fee waiver requests have"the effect of placing the plaintiff's lawyers in conflict with their clients and

more success with this tactic. He reported that defendants accepted the suggestion as frequently as they rejectedit. See Telephone Interview with Attorney 10 (Nov. 15,2002) (on file with author).

18. See Mendoza v. United States, 623 F.2d 1338, 1352-53 (9th Cir. 1980) (disapproving simultaneousnegotiation); Prandini, 557 F.2d at 1021 (prohibiting simultaneous negotiation offee awards and damages).

19. See, e.g., Moore v. NatlAss'n of Sec. Dealers, Inc., 762 F.2d 1093, 1104 (D.C. Cir. 1985).20. See Prandini, 557 F.2d at 1021.

21. Id.22. See id.23. See Moore, 762 F.2d at 1104.24. See id. at iioi n.13.25. See N.Y.C. Bar Ass'n Comm. on Prof' & Judicial Ethics, Formal Op. 80-94 (1980) (hereinafter N.Y.C.

Op. 80-94).26. See D.C. Bar Legal Ethics Op. 147 (1985) (hereinafter D.C. Op. 147).27. See State Bàr of Ga., Advisory Op. 39 (1984) (hereinafter Ga. Op. 39).28. See N.Y.C. Op. 80-94, supra note 25.


undercutting the policies of the civil rights statutes which provided for fees andthat accordingly the demands were prejudicial to the administration of justice.,,29Accordingly, the NYC Bar reached the same result as the Prandini Court, andprohibited fee waiver requests.

The Georgia Bar emphasized the importance of settlement.3o The Georgia Barclaimed that "(t)o force a defendant into proposing a settlement offer wherein

plaintiffs (sic) statutory attorney fees are not negotiated . . . leaves a defendant ina position of exposure that is at best, uncertain, and at worst so tenuous thatmeaningful settlement proposals might never be made.',) On this basis, theGeorgia Bar declined to prohibit the simultaneous negotiation of fees and merits.

B. THE MAJORITY OPINION

Evans v. Jeff D. resolved the split within the courts of appeals. In Jeff D., theSupreme Court considered a Ninth Circuit decision that had invalidated a feewaiver contained in a settlement of a class action?2 Jeff D. was a class actionbrought on behalf of disabled children in the care of public entities in Idaho.33The plaintiffs sought injunctive relief intended to improve conditions of care, butthey did not seek damages?4 During settlement negotiations the defendantsoffered almost all of the injunctive relief sought by the plaintiffs.3s The NinthCircuit noted that this offer was "more than the district court in earlier hearingshad indicated it was wiling to grant.',36 Clearly, the plaintiffs' lawyer would wishto accept such an offer. The problem, however, was that the defendants madetheir offer conditional on a complete waiver of statutory attorney's fees andcosts??

The plaintiffs' lawyer signed the settlement agreement but filed a motionasking the district Court not to approve the agreement's provision on costs andfees.3s The distrct court denied this motion and the plaintiffs appealed.39 The

Ninth Circuit invalidated the fee waiver and left the remainder of the settlementagreement standing.40 The court of appeals remanded to the district court for thepurpose of the determination of a reasonable fee.4I

29. Id.30. See Ga. Op. 39, supra note 27.3 i. Id.

32. See Evans v. Jeff D., 475 U.S. 717 (1986).

33. See id. at 720.34. See id. at 721.35. See id. at 722.36. JeffD. v. Evans, 743 F.2d 648, 650 (9th Cir. 1984).

37. SeeJeffD., 475 U.S. at 722.38. See id. at 723.39. See id. at 724.40. See id.41. See id.


The Ninth Circuit held that the defendants' settlement offer had created á"paricularly severe conflict when important interests of class members are atstake."42 The court noted that conflicts between clients and class counsel morecommonly involve allegations that counsel has obtained a large fee at the expenseof adequate relief for his or her clients.43 The court held that there is also aconflict of interest when counsel is "asked to choose between forgoing anycompensation while obtaining a favorable settlement on behalf of the class, ordeclining the benefit for the class in hope of eventually receiving a fee award.,,44The court held that, absent special circumstances, defendants should not be ableto place lawyers in such a position.4s

The Supreme Court began its analysis by holding that the Ninth Circuit shouldnot have accepted some elements of a settlement agreement while rejectingothers.46 The Court noted that the result might be a settlement package to whichthe parties would not have agreed.4? Thus, the Court concluded that the

settlement should have been upheld or rejected as a whole.4s Next, the Courtturned to the issue of whether the fee waiver provision provided cause for

invalidating the settlement.

1. ETHICAL CONSIDERATIONS

The Court held that the "strictures of professional ethics" do not create a dutyto invalidate negotiated fee waivers.49 The majority stated that it did "not believethat the 'dilemma' was an 'ethical' one in the sense that Johnson (the plaintiffs'attorney) had to choose between conflicting duties under the prevailng norms ofprofessional conduct."so The Court claimed that there was no "dilemma" becauseJohnson had an ethical duty to serve the interests of his clients but had no"ethical" duty to seek attorney's fees.si This conclusion is based on a verynarow, and unsympathetic, understanding of what can constitute an "ethical"dilemma. The Court assumed that an ethical conflict only arises when there is adirect conflict between courses of action required by the rules or duties of legalethics. For example, the Court would probably accept that a lawyer faced an"ethical" conflict if one rule of ethics directed her to withdraw from representa-tion and another rule directed her not to withdraw. In Jeff D., however, the

42. Jeff D. v. Evans, 743 F.2d 648,652 (9th Cir. 1984).43. See id.44.Id.45. See id. The Court of Appeals did not offer much guidance as to what could qualify as "special

circumstances." See id.46. SeeJeffD., 475 U.S. at 726-27.

47. See id. at 726.48. See id. at 727.49.Id. at 727.

50. Id. at 728.51. See feffD., 475 U.S. at 728.


plaintiffs' attorney could only obey an ethical rule at great financial cost tohimself. Here the "dilemma" was between the attorney's self-interest and fol-lowing an ethical rule. The Court would not consider this an "ethical" dilemma.

The Court's analysis is inadequate. The dilemma of choosing betweenself-interest and a client's interest is certainly "ethical" in a non-technical sense.Moreover, attorneys are much more likely to have to choose between self-interestand obeying an ethical rule than they are to come face to face with two directlyconflicting rules. Most importantly, "the prevailng norms of professionalconduct" do address this kind of ethical conflict. Model Rule 1.7 of the ModelRules of Professional Conduct ("Model Rules") addresses situations where thereis a conflict between a client's interest.and the lawyer's interest. Under Rule 1.7,the attorney must reasonably believe that representation wil not be affected byany conflicts of interest.s2 The attorney must also get client consent to continuerepresentation.

53

The Court's analysis brushes over the fact that Johnson did face a conflict ofinterest. The conflict is between his interest in securing a fee and his duty to hisclients. Two ethically proper courses of action appear to be open to Johnson.First, he could advise his clients to accept the settlement offer and forgo a feeaward. Second, if he determined that he was no longer able to offer imparialadvice, he could withdraw from representation. The Supreme Court onlyconsiders the first option. Moreover, the Court simplistically ignores the dangerthat, unlike Johnson, other lawyers wil be tempted to do the wrong thing and puttheir own interest above their clients. By ignoring these issues, the Court missesan opportunity to apply the Model Rules to the case.

Model Rule 1.7 can be extended to situations where one pary causes the otherto face a conflict of interest. If it is inappropriate to create a conflict by acceptingrepresentation it may also be inappropriate to create a conflict for other lawyers.This is the basic reasoning behind the decision from the Ninth Circuit.s4 TheSupreme Court was too hasty in dismissing the possibilty of an ethically baseddecision in Jeff D.

2. A NEW VISION OF FEE-SHIFTING POLICY: FEE-SHIFTING AS A "WEAPON"

Having rejected the idea that legal ethics could be dispositive, the Court turnedto the Civil Rights Attorney's Fees Awards Act of 1976.55 The Court found that

52. See MODEL RULES OF PROFESSIONAL CONDUCT Rule 1.7(b) (2002) ("A lawyer shall not represent a client

if the representation of that client may be materially limited by the. . . lawyer's own interests, unless: (I) thelawyer reasonably believes the representation wil not be adversely affected; and (2) the client consents afterconsultation.") (hereinafter MODEL RULES).

53. Id.54. The Court of Appeals did not explicitly invoke Rule 1.7, however. See JeffD. v. Evans, 743 F.2d 648 (9th

Cir. 1984).

55. See Jeff D., 475 U.S. at 730-39.


the Act provided no support for overturning the fee waiver. First, the Court notedthat the text of the statute does not support a prohibition on fee waivers.S6 Thestatute merely states that the trial court "in its discretion, may allow the prevailngpary. . . a reasonable attorney's fee."S? The statutory text gives little guidance on

the extent of the trial court's discretion and it does not address the issue ofwhether the prevailng pary can waive eligibilty for a fee award.

Finding no guidance from the statutory text, the Court turned to the purpose ofthe Fees Act.sS The Court stated that, by passing the Fees Act, Congress added "tothe arsenal of remedies available to combat violations of civil rights."s9 TheCourt stated that "the Fees Act has given victims of civil rights violations apowerful weapon that improves their abilty to employ counsel, to obtain accessto courts, and thereafter to vindicate their rights by means of settlement ortrial.,,60 This broad understanding of the Fees Act forms the basis of the Court'sdecision. Of paricular importance is the Court's view that the Fees Act isintended to help plaintiffs secure favorable settlements. The Court correctlynoted that a plaintiff might be able to secure a better settlement by agreeing toforgo a fee award.6I Consequently, the Court upheld fee waivers as a valid use ofa "weapon" provided by the Fees Act. 62

By permitting fee waiver requests, the Court also upheld the simultaneous

negotiation of relief and fee awards.63 The Court upheld simultaneous negotia-tion for the same reason that it supported the fee waiver. The Court argued thatsimultaneous negotiation could allow plaintiffs to achieve better settlementresults.64 Plaintiffs can use simultaneous negotiation as a "weapon" becausedefendants have an interest in controllng their total liabilty. The Court assumedthat, by allowing a defendant to establish his or her total liabilty, a plaintiffmakes settlement more attractive.6s Moreover, faciltating settlement has theadded benefit of reducing pressure on judicial resources.66

It is important to note that the majority's opinion has a very wide scope.Although the Court based its decision, at least in part, on the statutory languageand history of the Fees Act, this has not meant that the holding of JeffD. is limited

56. See id. at 730-32.57. 42 U.S.C. § 1988(b) (2003).

58. See Jeff D., 475 U.S. at 732-39.59. Id. at 732.60. Id. at 74 i.61. See id. at 741-43. The majority noted that the case before it proved this point because the plaintiffs

secured a better result than they were likely to achieve at triaL. See id. at 743.62. See id. at 737-38.63. A fee waiver provision is the extreme example of simultaneous negotiation.64. SeeJeffD., 475 U.S. at 733.65. See id.66. See id. at 736-37 ("It is. . . not implausible to anticipate that parties to a significant number of civil rights

cases wil refuse to settle if liabilty for attorney's fees remains open, thereby forcing more cases to trial,

unnecessarily burdening the judicial system, and disserving civil rights litigants." (footnote omitted)).


to the Fees Act. First, the Court rejected all ethical arguments against fee

waivers.67 This par of the holding effectively overrules cases involving other

fee-shifting statutes, such as Prandini, which were based on ethical consider-ations.6s Thus, Jeff D. undercuts the main basis for prohibiting fee waiverrequests and simultaneous negotiation of fees and merits. Second, the languageof the Fees Act is very similar to that of many other fee-shifting statutes.69 Thus,Jeff D. can be applied directly to most, if not all, federal statutes allowing forfee-shifting.70

C. THE DISSENT

Justice Brennan, joined by Justices Marshall and Blackmun, wrote a dissentingopinion arguing that the majority reached the wrong result because theymischaracterized the purpose of the Fees Act.71 Justice Brennan claimed that theprimary purpose of the Fees Act was "to ensure that there would be lawyersavailable to. plaintiffs who could not otherwise afford counsel, so that theseplaintiffs could fulfill their role in the federal enforcement scheme as 'privateattorneys general,' vindicating the public interest.,m Unlike the majority, JusticeBrennan did not see fee awards as a "weapon" for individual plaintiffs to use tosecure better settlements.73

Justice Brennan argued that, as fee waivers wil discourage lawyers fromrepresenting plaintiffs in civil rights cases, they conflict with the primary purposeof the Fees Act. 74 The court was sharply divided over this prediction. The dissentclaimed that "(t)he conclusion that permitting fee waivers wil seriously impairthe abilty of civil rights plaintiffs to obtain legal assistance is embarrassinglyobvious."7s The majority claimed that, in the absence of any documentation tosupport such a view, this conclusion was premature?6 Moreover, the majoritybelieved that it was unlikely that fee waivers would impair the abilty of civilrights plaintiffs to obtain legal assistance?7

67. See id. at 727-28.68. See Prandini v. Natl Tea Co., 557 F,2d 1015, 1020-21 (3d Cir. 1977).

69. See, e.g., Bandera v. City of Quincy, 220 F, Supp. 2d 26, 44 (D. Mass. 2002) (noting that under JeJI D.,"the abilty to apply for attorney's fees under section 1988 and, by analogy, under the same language in section2000e-5(k) of Title VII, belongs to the client and not his attorney").

70. See Jeff D., 475 U.S. at 732 n.22. State supreme courts, however, can take a different approach to

fee-shifting provisions found in state statutes. See Flannery v. Prentice, 28 P.3d 860, 872 (CaL. 2001) (Kennard,J., dissenting) (noting that the majority opinion "ignores the plain language of the statute as well as persuasiveUnited States Supreme Court precedent (including Jeff D.) construing virtually identical language in the federalcivil rights law" (emphasis added)).

71. See Jeff D., 475 U.S. at 743-66 (Brennan, J., dissenting).72. Id. at 745 (Brennan, J., dissenting).73. See id. at 752 (Brennan, 1., dissenting).74. See id. at 758-59 (Brennan, J., dissenting).75. Id. (Brennan, 1., dissenting).76. SeeJeffD., 475u'S. at 742 n34.

77. See id.


Justice Brennan supported his view with a story about how the Court's holdingwould influence future settlement negotiations. Justice Brennan's horror storyruns as follows. "(O)nce fee waivers are permitted, defendants wil seek them asa matter of course, since this is a logical way to minimize liabilty."78 Such anoffer is not less attractive to the plaintiff and it reduces the exposure of thedefendant.79 Moreover, plaintiffs' lawyers must place the interests of their clientsfirst and wil advise their clients to accept fee waiver offers.so Thus, we can.expect settlement offers to routinely contain fee waiver demands.si This wilmake it harder for plaintiff's lawyers to secure fee awards. Thus, they wil bemuch more reluctant to take civil rights cases.S2

In response to this story, the majority claimed that there was no "reason ordocumentation to support such a concern at the present time."s3 In support, themajority simply cited a footnote from Judge Wald's concurrence in Moore v.National Ass'n of Security Dealers, Inc.s4 In this footnote, Judge Wald claimedthat:

(M)y belief is that most public interest counsel explain the financial detaiisofthe litigation well in advance to their clients, and that few clients wil againstthe advice of counsel leap to accept a settlement that deprives counsel of faircompensation and themselves of any provision for costs. In my experience,respected counsel do not and should not undertake public interest representa-tion until an understanding is had with clients as to the range of appropriatesettlements. On balance, I do not believe the likelihood that irresolvableproblems between counsel and clients may occur is high enough to justify sobroad-ranging a rule as would cover the present case. S5

Unlike Justice Brennan, Judge Wald assumes that it is acceptable to advise clientsto reject an otherwise advantageous offer if the offer does not include a fee award.Justice Brennan assumed that counsel must "render. . . advice free from theinfluence of his or his organization's interest in a fee."s6 This lead him toconclude that "counsel must advise a client to accept an offer which includeswaiver of the plaintiff's right to recover attorney's fees if, on the whole, the offeris an advantageous one."S7 Judge Wald assumes that, when advising clientswhether to accept an offer, counsel may take the fact that a settlement offer

78. Id. at 758 (Brennan, J., dissenting).79. See id. at 757 (Brennan, J., dissenting).80. See id. at 756 n.8 (Brennan, 1., dissenting).81. See Jeff D., 475 U.S. at 758 (Brennan, J., dissenting).82. See id. at 758-89 (Brennan, J., dissenting).83. Id. at 742 n.34.84. See id.85. Moore v. Natl Ass'n of Sec. Dealers, Inc., 762 F.2d 1093, 1112 n.l (D.C. Cir. 1985) (Wald, J.,

concurring) (emphasis added).86. Jeff D., 475 U.S. at 756 n.8 (Brennan, J., dissenting).87. Id. (Brennan, J., dissenting) (emphasis added).


deprives them of fair compensation into account. Moreover, Judge Wald suggeststhat clients wil be sympathetic to their lawyers' need for a fee.

If Judge Wald is correct, Justice Brennan's horror story may not come true.Justice Brennan assumed that plaintiffs' lawyers would be forced to counsel theirclients to accept an offer conditioned on a fee waiver. This could encouragedefendants to make such offers. This would decrease recovery for plaintiffs'lawyers and make them less likely to take civil rights cases. However, if attorneyscan ask clients to reject such offers and clients agree, then Jeff D. may not depressthe availabilty of plaintiffs' lawyers in fee-shifting cases.

In Part II infra, the prophecies offered by the majority and the dissent are

compared with the real world experience of public interest lawyers. Althoughneither prophecy was fully accurate, my interviews with practitioners suggestedthat, overall, Judge Wald was more presctent than Justice Brennan.

D. THE RESPONSE FROM BAR ASSOCIATIONS

Before discussing the options available to public interest lawyers, it is worthinvestigating the response to Jeff D. from bar associations. Jeff D. would be farless important if bar associations had maintained their ban on defendant initiatedfee waiver requests. In Jeff D., the Court rejected ethical arguments against feewaivers. ss It is not clear, however, that bar ethics opinions had to be withdrawn inlight of Jeff D. In his dissent, Justice Brennan encouraged bar associations tomaintain their opposition to defendant-initiated fee waivers.s9 He stated that"(s)ince Congress has not sought to regulate ethical concerns either in the FeesAct or elsewhere, the legality of (ethical) arguments is purely a matter of locallaw."90 This means that, to the extent that ethics opinions are based oninterpretations of state ethical rules, they can be maintained in the face ofdisagreement from the Supreme Court.91

The bar associations did not follow Justice Brennan's advice, however. Inresponse to Jeff D., both the D.C. Bar and the NYC Bar withdrew their rulings onfee awards.92 The NYC Bar withdrew its opinion sua sponte while the D.C. Barwaited until the issue was brought before it.93 Both associations decided that JeffD. had overrled their prior decisions.

The D.C. Bar stated simply that "Jeff D. in essence overruled" its prior

88. See id. at 727-28.89. See id. at 765-66 (Brennan, J., dissenting).90. Idat 766 n.20 (Brennan, 1. dissenting).91. See also Peter H. Woodin, Note, Fee Waivers and Civil Rights Settlement Offers: State Ethics

Prohibitions After Evans v. Jeff D., 87 COLUM. L. REV. 1214, 1226-30 (1987) (arguing that Jeff D. does notprevent bar associations from prohibiting defendants from requesting fee waivers).

92. See D.C. Bar Legal Ethics Op. 289 (1999) (hereinafter D.C. Op. 289); N.Y.C. Bar Ass'n Comm. on Prof'l& Judicial Ethics, Formal Op. 1987-4 (1987) (hereinafter N.Y.C. Op. 1987-4:1

93. See D.C. Op. 289, supra note 92; N.Y.C. Op. 1987-4, supra note 92.


opinion.94 The NYC Bar considered the issue in more detai1.9s The NYC Barnoted that their prior opinion had been based on the Fees Act as well as ethicalconcerns.96 The Bar claimed that the "principal underpinning" of its decision wasthe view that fee waivers were inconsistent with the Fees Act.97 As Jeff D.

undercut this basis, the NYC Bar withdrew its opinion. These actions left allpublic interest attorneys vulnerable to fee waiver requests.

II. OPTIONS AVAILABLE TO PUBLIC INTEREST LA WYERS IN THE AFTERMATHOF JEFF D.

Many commentators feared that Jeff D. would encourage defendants to useaggressive tactics against the plaintiffs' bar.9s At the very least, the decisionraised the possibilty of more settlement offers being conditioned on fee waiversand more frequent simultaneous negotiation of fees and merits. This Parconsiders ways in which public interest lawyers can work around the harshresults of Jeff D. The most promising options are discussed in detail with anemphasis on whether these options are consistent with the directives of legalethics.

Attorneys who are prepared to charge clients are able to avoid the. morediffcult ethical challenges posed by Jeff D. This is because they can give theclient a financial incentive to pursue statutory attorney's fees. Julie Davies'

empirical research suggests that this is how most attorneys have responded to JeffD.99 She writes that attorneys "very quickly developed fee agreements withclients which offer some protection from (fee) waivers in the form of financialdisincentives."1Oo These agreements include charging contingent fees andrequiring clients to pay hourly fees if statutory attorney's fees are waived.1OI

Once the client and the attorney share an interest in securing a fee, the ethicalconflict of interest should disappear.

Davies' research focused on attorneys working in the for-profit setting. 102

Public interest attorneys in the non-profit sector are less able to protect

themselves with agreements that require charging fees. Indigent clients, forexample, cannot afford to pay hourly rates in the event of a fee waiver. Also,

94. See D.C. Op. 289, supra note 92, at n.6.95. See N.Y.C. Op. 1987-4, supra note 92.96. See id.97. See id.98. See, e.g., Note, Fee as the Wind Blows, supra note 5, at 1292-94; see generally Stedman, supra note 5.99. See Davies, supra note 7.100. Id. at 215.10 i. See id.

102. See id. at 203-08. Davies' study was focused on the financial, rather than the ethical, impact of SupremeCourt decisions on civil rights lawyers. She explains that "(tJhe basic premise underlying this study is that, inmost instances, attorney compensation drives decisions about what cases wil be taken and what cases wil not

be pursued." Id. at 207.


lawyers working for non-profits rarely charge contingent fees (although perhapsthey should consider this option).103 This means that public interest lawyersworking in the non-profit sector are much less likely to use strategies that removefee-related conflicts of interest. Thus, the strategies they develop are more likelyto raise ethical issues. In this Part, I discuss these strategies in detail and

investigate how they can be pursued without violating ethical norms. I alsoconsider how bar associations and courts should respond to the ethical issuesraised by these responses to Jeff D.

The three main options for public interest lawyers in the non-profit sector areas follows. First, these attorneys can break with tradition and charge contingentfees. Second, lawyers can follow Judge Wald's advice and encourage their clientsto pursue attorney's fees even when the settlement offer is otherwise adequate.Davies' research suggests that some lawyers do pursue this option.104 Myresearch suggests that this is by far the most popular strategy for lawyers in thenon-profit sector.lOS Third, lawyers can simply ask their clients to sign retaineragreements conditioning representation on the .non-waiver of fees. 106 I shall callthis the "limited retainer" solution. Davies' research did not uncover usage of thisstrategy. A recent ethics opinion, along with other evidence, suggests that at leastsome public interest lawyers have considered this option, however.

107

A. CONTINGENT FEES

Fee-related conflicts emerge when a lawyer has an incentive to pursue a feeaward even though this pursuit clashes with the clients' interest. In Jeff D., theplaintiffs would have received no extra benefit if their àttorney had refused thesettlement offer and pursued fees. Contingent fees provide an effective solution

103. See Telephone Interview with Attorney I (Oct. 3, 2002) (on fie with author); Telephone Interview withAttorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview with Attorney 3 (Oct. 8,2002) (on file withauthor); Telephone Interview with Attorney 4 (Oct. 10, 2002) (on file with author); Telephone Interview withAttorney 5 (Oct. 152002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on filewith author); Telephone Interview with Attorney 7 (Nov. 1,2002) (on file with author); Telephone Interviewwith Attorney 8 (Nov. 13,2002) (on file with author); Telephone Interview with Attorney 9 (Nov. 13,2002) (onfile with author); Telephone Interview with Attorney io (Nov. 15, 2002) (on file with author). Of the tenattorneys I interviewed, only one worked for an organization that included a contingency fee in its retainer. SeeTelephone Interview with Attorney 8 (Nov. 13, 2002) (on file with author).

104. See Davies, supra note 7, at 215 ("Attorneys also discourage fee waivers by exercising caution in clientselection and by educating clients about the importance of fees in a civil rights practice to prepare clients in theevent of a settlement offer contingent on a waiver.").

105. See discussion infra Part II(C).106. Justice Brennan suggested this option in his dissent in Jeff D. See Evans v. Jeff D., 475 U.S. 717, 766

(1986) (Brennan, J., dissenting) ("lIlt may be that civil rights attorneys can obtain agreements from their clientsnot to waive attorney's fees.").

107. See, e.g., D.C. Op. 289, supra note 92 (responding to an inquiry from a non-profit legal organizationthat wished to use a retainer committing clients not to accept fee waivers); E. Richard Larson, Recent

Developments in the Law of Attorney's Fees, C742 A.L.I.-A.B.A. 781, 844 (1992) (suggesting that limitedretainers are the best and most common strategy for dealing with fee-related conflicts).


to this problem because they can give clients a financial incentive to pursue astatutory fee award. Attorneys can do this by offering to subtract any statutory feeaward from the contingent fee. lOS Once the client and the attorney share aninterest in securing a fee, most conflicts should disappear. The contingent feesolution does not raise difficult ethical problems apar from those ethical issuesraised by contingent fees in general. 109

Although contingent fees are a good solution to fee-related conflicts, thisoption is often not available. There are two main reasons for this. First,contingent fees are not an option when only injunctive relief is sought.11o Second,many public interest lawyers are unable, or very reluctant, to charge contingentfees. Many lawyers are employed by organizations, such as law school clinics,non-LSC funded legal services organizations and other non-profits that have nottraditionally accepted contingency fees. ll Of course, it would beg the question toend the analysis there. Perhaps these organizations should change their practiceand begin charging contingent fees.

There are number of reasons why non-profit public interest organizations arereluctant to enter into contingent fee agreements. An amicus in Jeff D. argued thatits potential clients "many of whom have already suffered from harassment bylegal or governmental authorities, are often reluctant to sign such agreements."l12Thus, public interest lawyers may wish to distinguish themselves from profit-seeking attorneys as a way to build client trust. Contingent fees are also unhelpfulin cases where the monetary damages wil be small.

11 3

Internal Revenue Service regulations are probably responsible for much of thereluctance to charge contingent fees. Tax-exempt public interest organizationsrisk losing their tax-exempt status if they collect contingent fees. From 1975 until1992, the IRS narowly limited tax-exempt organizations' abilty to collect fees

108. See Venegas v. Mitchell, 495 U.S. 82, 84 (1990) (upholding the use of contingent fee contracts in § 1983civil rights cases).

109. See, e.g., Stewart Jay, The Dilemmas of Attorney Contingent Fees, 2 GEO. J. LEGAL ETHICS 813 (1989).

Of course, the general ethical questions raised by contingent fees are beyond the scope of this Note.110. Perhaps lawyers could sign contingency agreements whereby clients pay a fixed amount paid in the

event of litigation success. Such agreements could apply in cases where the client only seeks injunctive relief.Nevertheless, these agreements would only be viable if the client could afford to pay. If the client can aford topay, then lawyers can simply ask for an hourly fee from the outset. A lawyer can charge an hourly fee and agreeto deduct any statutory fee award from the total bil. Like the contingent fee solution, this technique gives theclient an incentive to seek a statutory fee award. As both the lawyer and the client wil want to pursue a feeaward, this removes the conflict of interest over fees. Unfortunately, this is not a viable solution for publicinterest lawyers who wish to represent clients who are unable to afford an hourly fee.

II i. For example, nine of the ten attorneys I interviewed work for organizations that do not collect

contingent fees.112. Brieffor Amici Curiae NAACP Legal Defense & Education Fund, Inc. eta!. at II n.lO, Evans v. Jeff D.,

475 U.S. 717 (1986) (No. 84-1288).

i 13. Statutory fee awards can sometimes be significantly larger than potential contingent fees. See Evans v.Jeff D., 475 U.S. 717 (1986).


from clients. 114 IRS guidance suggested that an organization could be tax-exempt

only if it did not "seek or accept attorneys' fees from its clients as compensationfor the provision of legal services."ii This restrictive regime forced all

tax-exempt public interest organizations to rely on alternatives to contingent fees.In 1992, the IRS moderated its regulations. The IRS now allows tax-exempt

organizations to "accept attorneys' fees in public interest cases if such fees arepaid directly by its clients."1l6 However, "(t)he total amount of all attorneys' fees(court awarded and received from clients) must not exceed 50 percent of the totalcost of operation of the organization's legal functions."ll Thus, if an organiza-tion already has a significant income from statutory attorney's fees then it canonly add contingent fee income if this does not exceed the 50 percent threshold.This means that contingent fees are unlikely to be a large additional source ofincome for organizations that already collect statutory fees.

The new regulations may stil help lawyers deal with the problem offee-related conflicts, however. A small contingent fee may be a significantamount to the client. If the lawyer agrees to deduct any statutory fee recoveryfrom the contingent fee then the client wil have an incentive to pursue the

statutory fee award. Thus, even where the contingent fee is small, it can stilmotivate the client to refuse a defenClants request that statutory fees be waived.

It appears that most public interest lawyers do not use contingent fees as astrategy for dealing with fee-related conflicts.

us This may be because lawyers

see charging fees as fundamentally inconsistent with a public interest mission.Alternatively, it may be because IRS regulations were once so restrictive that theyforced public interest organizations to adopt a culture of refusing such fees. Nowthat the IRS has moderated its stance, public interest lawyers should at leastconsider using contingent fees. They should investigate whether contingent feeswould impair client trust. If contingent fees are not a significant barier for clientsthen attorneys could use contingent fees as a means of avoiding fee-relatedconflicts.

114. See, e.g., Rev. Proc. 75-13,1975-1 C.B. 662 (1975); Rev. RuL. 75-74,1975-1 C.B. 152 (1975). Theseguidelines apply to entities recognized under the "charitable" or "educational purposes" exemptions of§ 501(c)(3) of the Internal Revenue Code.

115. Rev. Proc. 75-13,1975-1 C.B. 662, § 3.01 (1975).116. Rev. Proc. 92-59,1992-2 C.B. 411, § 4.02 (1992).I 17. Id. at § 4.05 (The 50% requirement is "calculated over a five-year period, including the taxable year in

which any fees are received and the four preceding taxable years (or any lesser period of existence).").II 8. Of the ten attorneys I interviewed, only one included a contingent fee in his retainer. This attorney

reported that this aspect of his organization's retainer agreement "went through a huge amount of vetting withour board members" to ensure that it didn't endanger its. non-profit status. However, this lawyer reported that hisorganization stil considered contingent fees only as a last resort, to be used only if other approaches to a feerelated conflict were unsuccessfuL. He said that he prefers to rely on the support of clients as a solution to feeissues. Thus, even this attorney focused on other solutions to fee related conflicts. Telephone Interview withAttorney 8 (Nov. 13,2002) (on file with author).


B. ATTORNEY-CLIENT SOLIDARITY

Judge Wald suggested that fee waivers should not be a significant problem forplaintiffs' lawyers in fee-shifting cases.119 She believed that lawyers would askclients to refuse settlement offers that did not include fees and that clients wouldsupport their lawyers' need for a fee award.

120 Attorneys can respond to JeffD. by

taking Judge Wald's advice and educating clients about the importance ofattorney's fees and then asking for client support. I shall call this the"attorney-client solidarity" strategy. This is the most common strategy employedby non-profit lawyers. I2I Thus, it is worth outlining the ethically acceptable

parameters of this approach.The use of the attorney-client solidarity approach raises a number of ethical

questions. In particular, this practice is in tension with the principal of clientcontrol and with the duty to show undivided loyalty to the client. It may beunethical to ask clients to support the pursuit ora fee award if this wil not help,and may even harm, the interests of the client. There is also a danger that theclient may feel unduly pressured into sharng the lawyer's desire for fees.

1. ASKING CLIENTS FOR ASSISTANCE

Justice Brennan suggested that "the lawyer's duty of undivided loyalty

requires that he render. . . advice (about settlement offers) free from the influenceof his or his organization's interest in a fee."122 This lead him to conclude thatpublic interest lawyers cannot ethically ask their clients to support them in theirpursuit of fees.123 There are three reasons for resisting this analysis. First, theorganization's interest in a fee may be coextensive with some interests of theclient. This wil be especially true when the client is a member of theorganization's target client base. Many organizations offer legal services to atargeted group of clients. Typically, this group is underrepresented within thejustice system.124 A client might support the services supplied by the lawyer'sorganization on the basis of his or her own loyalty to the community. It isreasonable to ask a client to help ensure that the lawyer's organization can

continue to provide services to her and her community.A second reason for rejecting Justice Brennan's view is that it diminishes

clients by assuming that lawyers should expect, or even encourage them, to be

119. See Moore v. Natl Ass'n of Sec. Dealers, Inc., 762 F.2d 1093, 1112 n.l (D.C. Cir. 1985) (Wald, J.,concurring).

120. See id.12 i. See discussion irifra Part II(C).122. Evans v. Jeff D., 475 U.S. 717, 757 n.8 (1986) (Brennan, J., dissenting).123. Justice Brennan based this view on Model Rule 1.7(b). See id.124. A typical example is the Cabrini Green Legal Aid Clinic. This clinic was founded to exclusively serve

clients residing in the Cabrini Green/Near North neighborhood of Chicago. See CGLA's Mission, Values, Goals,and History, at http://www.ilinoisprobono.org/index .cfm ?fuseaction = home.dsp_content&contentID=267.


selfish. It is important to remember that clients can share the policy goals of alegal organization. Contrary to public opinion, lawyers do not have a monopolyon altruistic motivation. Attorneys should be alert to the wide range of clients'"interests." If the lawyer restricts advice to factors effecting the narowself-interest of the client then the lawyer appears to assume that the client is onlymotivated by such factors. A lawyer should explain all of the implications of asettlement offer including the financial impact on the lawyer's own organization.This enables the client to consider the broader consequences of his or herdecision as well as its specific personal impact.

The third reason for rejecting Justice Brennan's view is that clients may havean interest in the symbolic value of fee-shifting. Clients can be motivated to makean "example" of a defendant.12s Fee-shifting statutes provide the possibilty ofadditional vindication for plaintiffs. The default rule is that parties pay their owncostS.126 Fee-shifting sends a strong message that the defendant's actions were

contrary to public policy. Thus, there are three good reasons to ask clients tosupport the pursuit of a fee award. These reasons can be significant even if allother elements of the settlement offer are satisfactory for the client. This showsthat asking clients to support the pursuit of fees is consistent with a lawyer's dutyof loyalty. In fact, the lawyer respects the autonomy of the client by assuming thatthe client may be motivated by altruism.

2. AVOIDING COERCION

It is legitimate to ask clients to support the pursuit of attorney's fees. Lawyersmust stil take care, however, to ensure that they do not pressure clients to makean "altruistic" decision. It is only legitimate to pursue fees with genuine supportfrom the client. Otherwise, the attorney wil be acting against the interests theclient in violation of Model Rule 1.7(b)(1).127 This raises two closely relatedquestions. First, how much "encouragement" can public interest lawyers apply totheir clients? Second, how can attorneys ensure that clients genuinely supporttheir pursuit of fees?

A correct answer to the first question provides the best solution to the second.The best way to ensure that client support is genuine is to take care not to applytoo much pressure on clients. If clients have not been pressured then lawyers canfeel confident that their support is genuine. If clients are overly pressured thenlawyers wil not be able to trust expressions of support. Thus, the most importantissue is how public interest lawyers inform and advise clients about fees.

How much persuasion is acceptable wil vary. It wil vary depending on how

125. See infra note 222 and accompanying text.126. See, e.g., Buckhannon Bd. & Care Home, Inc. v. W. Va. Dept. of Health & Human Resources, 532 U.S.

598, 603 (200 I).127. See MODEL RULES Rule 1.7(b)(l) (2002) (requiring that an attorney avoid a conflict of interest unless

"the lawyer reasonably believes the representation wil not be adversely affected").


important fees are in a paricular case and it wil vary depending on howsympathetic particular clients are toward the wider policy goals of the lawyer'sorganization. Early in litigation, particularly in a small case, the potential feeaward wil not be significant. If the fee involved is not significant for theattorney's organization then lawyers shouldn't recommend pursuing a fee awardif this may harm the interests of the client. Other cases, however, may havesignificant financial implications for the lawyer. In these cases the lawyer wil beeager for the client to support the pursuit of fees.

Lawyers should try to get some idea of how important wider policy goals are toa client. If the client has shown a strong interest in the policy goals of the lawyer'sorganization then the lawyer can place emphasis on a settlement offer'ssignificance with respect to these goals. On the other hand, if clients suggest thatthey just want the money they are owed, then the lawyer may be interfering byplacing an emphasis on fees. If public interest lawyers take care to ensure thatthey only ask for significant support from clients whom they know to besympathetic, then improper coercion is unlikely to occur.

This approach can be contrasted with more radical tactics such as encouraginga client to refuse a settlement offer by actively misrepresenting the offer. DavidLuban has suggested that a radical tactic like this may be acceptable in somecircumstances. I2S He bases this conclusion on his view that public interest

lawyers engaged in cause-lawyering have a unique kind of relationship with theirclients. Luban acknowledges that, ordinarily, lawyers are agents of their clients.He suggests that public interest lawyers, however, may not have a simpleagent-principal relationship with their clients. When lawyers and clients jointogether to pursue a policy goal they can be seen as having a relationship of"mutual political commitment."

129 Luban argues that people who enter into close

political relationships understand that their alles may place the cause above theneeds of an individuaL.

130 He claims that the public interest lawyer's "relationship

with her (client) is not an ordinary lawyer-client relationship based on agencyconceptions of fiduciary responsibilty, rather, it is a relationship of comradeship,of primary commtment to the cause and only secondar commtment to (theclient)."l3 Luban concludes that clients who enter into close political relation-ships with lawyers can be manpulated if ths is suffciently importt to the cause.13

Luban's radical conclusion is not consistent with standard legal ethics andLuban accepts this.133 His view is that standard legal ethics is too inflexible too

128. See DAVID LUBAN, LAWYERS AND JUSTlCE 317-40 (1988).

129. Id. at 337.130. See id. at 329-35.13 i. Id. at 338.132. This manipulation could include behavior such as misrepresenting an offer or antagonizing opposing

counsel so that they would withdraw the settlement offer. See id.133. Luban realizes that this practice is inconsistent with the Model Rules. See id. at 321.


accommodate political lawyering. Thus, unless public interest lawyers arewiling to risk sanctions, they should take no more than an academic interest inLuban's argument.

Moreover, Luban asks for attorney-client solidarty to support more weightthan it can bear. Although clients and lawyers may often feel mutual solidarity,public interest lawyers typically represent clients of lower socio-economic statuswith little formal education. This hierarchy suggests that any manipulation by thepublic interest lawyer would only add to the disempowerment felt and

experienced by their clients. Many academic commentators caution that publicinterest lawyers tend to dominate their clients.134 Lawyers should not make thisproblem worse by manipulating their clients into rejecting settlement offers.

As long as it is done carefully, asking clients tu support the pursuit ofattorney's fees need not lead to lawyer domination. Much of the literature onlawyer domination focuses on the problem of lawyers characterizing their clientsas helpless victims.13S Public interest lawyers who ask clients for support mayactually help counter this problem. Practitioners should only "pressure" clientsby asking clients to refuse offers on the grounds that the offer conflicts with thepolicy goals shared by the lawyer and the client. Mutual political commitmentcan bear this modest burden because the parnership between lawyer and clientremains open and forthright. The client is allowed to consider his or her narowinterests along with the broader political goals. This takes clients out of thepassive role of someone who simply needs to be saved by the lawyer.

3. SCREENING CLIENTS

Lawyers can only get genuine client support for pursuing fee awards if theclient is supportive of the wider political goals of the lawyer's organization. Thisgives lawyers an incentive to seek out and select clients who are sympathetic totheir goals. In cases where the lawyer anticipates a need for client support thelawyer might consider selecting clients especially carefully.

Public interest lawyers confront more potential clients than they are able toserve. Thus, all organizations need to develop policies for distributing theirscarce resources. This has been called the "strategy of legal service triage."136 Itis widely accepted that lawyers can base case selection decisions on broad

utiltaran considerations such as how many people are affected or the relative

134. See GERALD P. LOPEZ, REBELLIOUS LAWYERING: ONE CHICANO'S VISION OF PROGRESSIVE LAW PRACTICE

22-23 (1992); Anthony V. Alfieri, Reconstructive Poverty Law Practice: Learning Lessons of Client Narrative,

100 YALE LJ. 2107, 2123-30 (1991) (suggesting that lawyers disregard client narratives and impose stories ofclient passivity thereby reinforcing lawyer domination); Carl J. Hosticka, We Don't Care About What ReallyHappened, We Only Care About What is Going to Happen: Lawyer-Client Negotiations of Reality, 26 Soc.PROBS. 599 (1979) (discussing an empirical study suggesting that lawyers dominate conversations with clients).

135. See Alfieri, supra note 134; Hosticka, supra note 134.136. Paul R. Tremblay, Acting "A Very Moral Type of God": Triage Among Poor Clients, 67 FORDHAM L.

REV. 2475 (1999).


seriousness of the potential clients' problems. 137

These utiltaran considerations can be extended to cover attorney-clientsolidarity and clients' wilingness to support the pursuit of fees. This is becausethe financial health of an organization is highly relevant to how many cases it cantake. Having clients who support the pursuit of fees should allow an organizationto help more people. This means that preferring supportive clients is similar topreferrng cases where a legal victory wil have a wider impact. Thus, it islegitimate for a public interest organization to seek supportive clients.

C. LIMITED RETAINERS

Justice Brennan suggested that "it may be that civil rights attorneys can obtainagreements from their clients not to waive attorney's fees."13S I shall refer to thisidea as the "limited retainer" solution. Limited retainers can put clients and

defendants on notice that settlement offers must include attorney's fees. In thisway, the plaintiff's lawyer hopes to avoid conflicts of interest and ensure thatsuccess on the merits wil lead to a fee award. At least one author has encouragedattorneys to use limited retainers. 139 Another commentator suggested that limitedretainers are the best, and most common, way to deal with conflicts related to thesimultaneous negotiation of fees and merits.140

Unfortunately, limited retainers conflict with the basic tenet of legal ethics thatclients should control settlement decisions.141 Commentators recommendinglimited retainers have completely ignored this ethical issue.142 This is a seriousoversight. In the last decade, five bar associations have considered the ethicalpropriety of limited retainers.143 Four of these bar associations ruled that the"limited retainer" solution is unethical.I44 Thus, attorneys in four states cannotuse limited retainers at all without defying their state bar association. Bar

association commentar on limited retainers has not been unanimous, however.The opinion from the California State Bar provides an alternative view.14S

137. See id. at 2487-89; LUBAN, supra note 128, at 306~16.138. Evans v. Jeff D., 475 U.S. 717, 766 (1986) (Brennan, J., dissenting).139. See David W. Garland, Ethical Conflicts and Professional Considerations: Selected Issues, CA35

A.L.l.-A.B.A 505, 536-37 (1996) (enoouraging plaintiff's attorneys to enter into retainers conditioningrepresentation on the non-waiver of fees).

140. See Larson, supra note 107, at 844.141. See MODEL RULES Rule 1.2 (2002).

142. See Garland, supra note 139; Larson, supra note 107.143. See D.C. Op. 289, supra note 92; Utah State Bar Ethics Advisory Op. Comm., Op. 98-05 (1998)

(hereinafter Utah Op. 98-05); Conn. Bar Ass'n Comm. on Prof'l Ethics, Informal Op. 97-3 i (i 997) (hereinafterConn. Op. 97-31); Cal. State Bar Standing Comm. on Prof' Responsibilty and Conduct, Formal Op. 1994-136

(1994) (hereinafter Cal. Op. 1994-136); State Bar Ass'n of N.D., Op. 93-09 (1993) (hereinafter N.D. Op.93-09) .

144. See D.C. Op. 289, supra note 92; Utah Op. 98-05, supra note 143; Conn. Op. 97-31, supra note 143;N.D. Op. 93-09, supra note 143.

145. See Cal. Op. 1994-136, supra note 143.


1. ETHICAL OBJECTIONS TO THE LIMITED RETAINER

The main objection to limited retainers is that they interfere with the client'sright to control settlement decisions. A limited retainer "specifically commits theclient, as a condition of representation, not to accept a settlement offerconditioned on the client's waiver of his or her right to pursue court-awardedattorneys' fees."146 Thus, the client agrees to limit his or her discretion to accept

or reject any settlement offers.In holding this retainer unethical, bar associations have mechanically applied

ethical rules granting clients control over settlement decisions. For example, theState Bar Association of North Dakota noted that "Rule 1.2 makes it clear that alawyer must abide by the client's decision whether to accept a settlementoffer."147 Thus, a retainer "agreement may not restrict the client's right to receiveand accept settlement offers."14s The Utah State Bar claimed that "(a)n attorneymust convey all offers of settlement to a client, and the client must always havethe final say. . . (t)his ultimate client authority cannot be contracted away."149

The inquirer to the D.C. Bar claimed that the limited retainer is only a "slightimpingement" on the client's control of settlement and that this impingement "isjustified. by fee-shifting statutes and by the public interest served by providingfinancing for further cause litigation."lso The D.C. Bar rejected this rationaliza-tion stating that "(t)he Committee, like other jurisdictions that have faced thisissue, recognizes that a client's right to accept or reject a settlement offer isabsolute, as confirmed by our Rule 1.2(a)."lSI

Both the D.C. Bar and State Bar of North Dakota also make the serious chargethat limited retainers actually create a conflict of interest between the client andthe lawyer. The D.C. Bar claimed that:

(A)n advance waiver of this right (to control settlement) in the context of a feeaward waiver would create an actual conflict (of interest) between the lawyerand client when and if the client were called upon to honor the settlementrestriction, seriously impairing the lawyer's ability to render full and candidadvice regarding the propriety of accepting the settlement offer and raisingserious issues regarding the client's ability to provide a voluntary consent to thelawyer's continued representation.IS2

The State Bar of North Dakota similarly claimed that limited retainers, "ratherthan the settlement offer (conditioned on a fee waiver), create a conflict of

146. D.C. Op. 289, supra note 92, at 2.147. N.D. Op. 93-09, supra note 143, at 3.148. Id.149. Utah Op. 98-05, supra note 143.150. D.C. Op. 289, supra note 92, at 5 (internal quotation marks omitted).is!. Id. at 6 (emphasis added).

152. Id.


interest between the attorney and the clients."ls3These claims are simply not correct. It is more accurate to say that the limited

retainers resolve a conflict of interest in favor of the lawyer. If a defendantrequests a fee waiver then a conflict of interest wil exist regardless of whether theclient has signed a limited retainer. The lawyer would stil have an interest inrejecting the offer while the client has an interest in accepting the offer.ls4 For

example, in Jeff D. the plaintiff's attorney believed that his loyalty to his clientsrequired him to accept the offer and forgo a fee award.lss Thus, the conflict wasresolved in favor of the client. Alternatively, if a client honors a limited retainerthen the conflict is resolved in favor of the lawyer. The conflict existsindependently of the limited retainer.

Although the D.C. Bar and the State Bar of North Dakota are incorrect inclaiming that limited retainers create a conflict of interest, this does not undercutthe main basis for their decision. The main basis of their holding is the tenet ofclient control of settlement. By automatically resolving a conflict of interest infavor of the lawyer, limited retainers reduce client control of settlement.

Accordingly, this interferes with an "absolute right" of the client and provides abasis for rejecting limited retainers.IS6 Thus, the crucial question for limitedretainers is whether they impermissibly interfere with client control.

2. RESPONDING TO THE ETHICAL OBJECTIONS

The ethical objections to limited retainers do not support the wholesalerejection of their use. Although limited retainers htlve some costs for clients,these costs do not justify banning limited retainers. More importantly, if clientautonomy is considered broadly,' then limited retainers do not impermissiblyinterfere with this autonomy. Thus, in an at least some situations, these contractsare ethicaL.

The bar associations that rejected limited retainers did not consider, from theperspective of clients, the likely costs and benefits of limited retainers. This isworth doing. The main advantage of limited retainers is that they can assistpotential plaintiffs to find competent counseL. Although it is not clear howpowerful limited retainers are for this purpose, it cannot be disputed that lawyersare more likely to take cases if they know that litigation success wil lead to a fee.Only the extent of the benefit is open to question.IS7 Any assistance in securingcounsel should be valued highly. Potential clients are unlikely to have their rights

153. N.D. Op. 93-09, supra note 143, at 3 (emphasis added).154. This assumes that the offer includes adequate relief on the merits.155. Evans v. Jeff D., 475 U.S. 717, 722 (1986).156. D.C. Op. 289, supra note 92, at 6.157. Even the majority in Jeff D. was "cognizant of the possibility that decisions by individual clients to

bargain away fee awards may, in the aggregate and the long run, diminish lawyers' expectations of statutory feesin civil rights cases." 475 U.S. at 741 n.34.


vindicated at all without representation. We should ~mly reject limited retainers ifthe costs of these contracts clearly outweigh this benefit. Otherwise, we would bedenying plaintiffs a potentially useful tool.

There are two main costs of limited retainers. First, by reducing the range ofsettlement offers, limited retainers may lengthen litigation and increase theprobabilty that a case wil go to triaL. This can delay relief and make litigationmore expensive. Second, a limited retainer may reduce the client's eventualrecovery. Neither drawbsJck provides a basis for rejecting limited retainers.

Limited retainers should not be rejected just because they make settlementmore difficult, as other methods of delivering legal services have similardownsides. For example, lawyers hired on a contingency basis have a financialincentive to do little preparation and settle early.lss Lawyers paid by the hourhave an economic incentive to maximize the time they spend on a case.IS9 Thismeans that hourly biling can require expensive and near constant monitoring byclients to ensure that legal services are not over-delivered.160 Over-delivery oflegal services is not just more expensive, it can result in settlements being

unnecessarily delayed.161 As other methods of delivering legal services have a

similar effect, limited retainers cannot be rejected on ethical grounds just becausethey may delay settlement.

Nor should limited retainers be rejected because they may reduce the client'srecovery. It is true that, by agreeing to a fee waiver, a plaintiff who hasn't signed alimited retainer should be able to secure a better settlement.162 This is not a strongobjection to limted retainers, however. Contingent fees have exactly the samedrawback. Obviously, a plaintiff wil get a better deal if he can keep his lawyer'scontingent fee. Client control over settlement does not give plaintiffs the power toinsist that their lawyers waive their contingency fees. More simply, contingentfee contracts are enforceable even when they frustrate financial interests of theclient. Thus, limited retainers should be enforceable even though they may havesimilar negative consequence for clients.

158. See Robert F. Cochran, Jr., Legçil Representation and the Next Steps Toward Client Control: AttorneyMalpractice for the Failure to Allow the Client to Control Negotiation and Pursue Alternatives to Litigation, 47WASH. & LEE L. REV. 819, 835 (1990).

159. SeeDennis Curtis & Judith Resnik, Teaching Billng: Metrics of Value in Law Firm and Law Schools,

54 STAN. L. REV. 1409, 1419-21 (2002) (discussing institutional pressures within law firms that lead toexcessive billng); E. Donald Ellot, Managerial Judging and the Evolution of Procedure, 53 U. CHI. L. REV.

306,330-32 (1986) (discussing the need for judges to protect clients and courts from attorneys' tendencies toover-supply legal services).

160. See James P. Schratz, I Told You to Fire Nicholas Farber-A Psychological and Sociological Analysis of

Why Attorneys Overbil, 50 RUTGERS L. REV. 2211, 2222 (1998) ("As legal fees mount, management is devoting

additional corporate resources to understanding and controlling escalating legal fees. . . . (This has lead to aJburgeoning cottage industry of legal auditors and litigation cost managers. . . .").

161. See Ellot, supra note 159, at 33 1-32.

162. The Supreme Court was correct in noting that a fee waiver can be a "weapon" used to secure a bettersettlement. See Jeil D., 475 U.S. at 741. Of course, the dissent strongly disputed the majority's claim that thiswas part of the intent of the Fees Act. See Jeff D., 475 U.S. at 752-53 (Brennan, J., dissenting).


The costs and benefits of limited retainers are not lopsided enough to warrantthe prohibition of this kind of contract. The defense of limited retainers requiresone more step, however. It remains to be shown that limited retainers do notimpermissibly interfere with client autonomy. This can be done by consideringthe ways in which limited retainers widen and limit client autonomy. If autonomyis conceived broadly, the freedom to sign a limited retainer may improve clientautonomy. Thus, these retainers should be permitted.

Limited retainers infringe on client autonomy by restricting the client'sfreedom to negotiate with the defendant. This infringement is quite narrow, .however. Clients maintain most of their power over settlement decisions. Forexample, clients cannot be forced to accept an offer, as they remain free to rejectany settlement offer. They remain free to accept any settlement offer that includesattorney's fees. By signing the limited retainer a client only decides, in advance,to reject offers conditioned on a fee waiver. Thus, limited retainers only changethe time at which a limited range of settlement decisions are made.

On the plus side, limited retainers improve clients' freedom to bargain withtheir attorneys. While other bar associations focused solely on the client's right tocontrol settlement, the California Bar also considered the client's right to contractwith counsel at the inception of the attorney-client relationship.163 The CaliforniaBar cited. Venegas v. Mitchell in support of the view that civil rights plaintiffsshould be given flexibilty when negotiating with their attorneys.

164 In Venegas,

the Supreme Court held that a contingent fee contract was enforceable eventhough the contingent fee exceeded the statutory fee awarded under the FeesAct.16S The Court noted that refusing to allow contingency agreements in civilrights actions would place plaintiffs "in the peculiar position of being freer tonegotiate with their adversaries than with their own attorneys."166

Similar considerations apply to limited retainers. Refusing to allow limitedretainers would place plaintiffs in the situation of being freer to negotiate withdefendants than with their own lawyers. Thus, allowing limited retainersimproves clients' freedom to negotiate with their lawyers at a cost to theirfreedom to negotiate with defendants. Allowing clients to choose which freedomis most important is the best way to respect client autonomy.

Overall, limited retainers can involve a sensible bargain. The client agrees toexchange the "weapon" of a fee waiver to improve her prospects of findingrepresentation. This deal does not come at an intolerable practical or financial

163. See CaL. Op. 1994-136, supra note 143.

164. See id.165. See Venegas v. Mitchell, 495 U.S. 82, 88 (1990). Interestingly, Venegas actually involved a limited

retainer. The retainer "forbade Venegas from waiving Mitchell's right to court-awarded attorney fees, andallowed Mitchell's intervention to protect his interest in the fees." Venegas v. Skaggs, 867 F.2d 527, 529 (9thCir. i 989). The 'limited' aspect of the retainer was not an issue in the case and was not considered by the court.See generally id.

166. Venegas, 495 U.S. at 88.


cost to the client. Also, a limited retainer does not have an intolerable effect onthe client's autonomy. Limited retainers only restrict a small aspect of the clients'right to control settlement. Importantly, they do not force the client to accept anyoffer. They only require the client to decide in advance to reject a certain type ofsettlement offers. These points strongly support the view that clients should beallowed to sign limited retainers.

These detailed considerations can be contrasted with the simplistic positionthat clients have an "absolute" right to control settlement.

167 This right should not

be invoked at a cost to clients. Traditionally, a strong showing is required toestablish that a contract is unconscionable.16s Even if we assume that clientsdeserve extra protection from savvy lawyers, bar associations should engage indeeper analysis before prohibiting limited retainers. Applying strict construction-ism to ethical rules may not always be the best way to help clients. In this case, adeeper analysis suggests that, from the perspective of the client, the benefits oflimited retainers justify the cost.

3. PROBLEMS WITH ENFORCEABILITY

I have argued that bar associations should allow attorneys to use limited. retainers. Unfortunately, a complication remains. Even if bar associations reachthe correct ethical conclusion and allow limited retainers, they do not get the lastword. Retainers are contracts. As such, their usefulness is dependent on thewilingness of courts to enforce them. Like the majority of bar associations,courts generally assign an "absolute" value to the client's right to controlsettlement decisions.169 Thus, it is possible that courts wil hold that limited

retainers are invalid. Bar ethics opinions may influence courts to support limitedretainers but these opinions are not binding. Thus, bar associations and courtsneed to act together.

Consider the example of California. California case law, like that of otherstates, strongly supports client control of settlement decisions.

170 The California

Bar realized that limited retainers might not be enforceable.171 The Bar

concluded that "(t)he client always has the right to determine whether or not to

167. D.C. Op. 289, supra note 92, at 6.168. "Enforcement wil be denied only if the factors that argue against enforcement clearly outweigh the

law's traditional interest in protecting the expectations of the parties. .. ." RESTATEMENT (SECOND) OF

CONTRAClS § 178, cmt. b (1981) (emphasis added).169. See, e.g., New England Training Services, v. Silver St. P'ship, 528 A.2d 1117, 1120 (Vi. 1987)

(Authority over settlement "remains at all times within the control of the client."); Giles v. Russell, 567 P.2d845, 850 (Kan. i 977) (A "contract which prevents the client from settling without the consent of the attorney isvoid as against public policy.").

170. See, e.g., Alvarado Cmty Hosp. v. Superior Court, 219 CaL. Rptr. 52, 54 (CaL. Ct. App. 1985) ("Anattorney 'has no implied or ostensible authority to bind his client to a compromise settlement of pendinglitigation.' "(quoting Navrides v. Zurich Ins. Co., 488 P.2d 637,639 n.1 (CaL. 1971))).

171. See CaL. Op. 1994-136, supra note 143.


accept a settlement offer."17 The Bar emphasized that any lawyer must discloseand explain the terms of the retainer, including the possibilty that the retainer isunenforceable. I73 The recommended disclosure:

should include a discussion that the lawyer may attempt to override the client'sdesire to settle the case by accepting the injunctive relief requested, if thesettement offer depends upon a waiver of some or all of the attorney's fees, andthat the lawyer's right to do so may not be enforceable. The client must beinformed that the defendant may offer the full injunctive relief requested inexchange for a waiver of attorney's fees and that, in this event, the attorney'sinterest and the client's interest in settling the case would differ, with thepossible result that the attorney must withdraw.174

If the lawyer cannot accept or refuse a settlement offer without the client'sconsent then, even if the client has signed a limited retainer, the client can acceptan offer conditioned on fee. The lawyer may then withdraw and seek to enforcethe retainer agreement.17S However, the lawyer may arive in court only to findthe agreement declared unenforceable.176

Thus, even if their local bar permits limited retainers, attorneys may bereluctant to ask clients to sign a contract that may be unenforceable. Limitedretainers could stil assist in two ways, however. First, the client may feel a moralobligation to honor the contract, even though the client understands that theretainer may be unenforceable. The retainer would serve as an informalagreement whereby the client agrees to assist the lawyer to secure a fee. This is anacceptable reason to want an unenforceable contract. Limited retainers could alsohelp the attorney in an objectionable way, however. Clients could honor the

retainer because they don't understand that they maintain the power to acceptsettlements conditioned on fee waivers. This could happen with or withoutdeliberate pressure from the attorney. The California Bar attempts to prevent thisby requiring attorneys to disclose the possibilty that the retainer is unenforce-able.177 Nevertheless, many clients wil lack the legal sophistication to appreciatethe significance of this. The California Bar does not address this danger.

At a minimum, clients should be able to understand the implications of anycontract they sign. Thus, limited retainers are only ethical if the client issophisticated enough to understand the implications of signing a contract that

172. See id.173. See id. California Rule of Professional Conduct 3-300 creates an obligation of disclosure before a

lawyer can acquire any interest adverse to a client. See CAL. RULES OF PROFESSIONAL CONDUCT Rule 3-300

(2003).174. Cal. Op. 1994-136, supra note 143.

175. See id.176. See Darby v. City of Torrance, 810 F. Supp. 271, 273-74 (C.D. Cal. 1992).177. See Cal. Op. 1994-136, supra note 143.


may be unenforceable.l78 Unfortunately, the indigent clients that fee-shiftingprovisions are intended to help are especially likely to be confused by a request tosign a potentially unenforceable contract. This suggests that limited retainers wilonly be ethical in a narow range of cases. Thus, until bar associations and courtsaccept limited retainers, plaintiff's attorneys may have to rely on alternativestrategies for dealing with fee-related conflicts of interest.

The tension between the California Bar's opinion and the likely response fromthe courts provides support for a thesis advanced by Peter Joy. Joy argues thatstate supreme courts should establish procedures allowing them to review barassociation ethics opinions.179 Ethics opinions could then be a source ofprecedential authority.Iso This would make it less likely that the bar and thecourts wil end up working at cross-purposes.ISI Under the current system,attorneys can not be sure that courts wil respect the California Bar's decision thatlimited retainers are ethicaL. Thus, public interest lawyers wil have to proceedwith caution if they use these retainers.

III. JEFF D. IN PRACTICE: PERSPECTIVES FROM THE FIELD

It is diffcult to determine the impact of Jeff D. simply by considering theoptions available to attorneys or by looking at subsequent ethics opinions. A moreempirical approach is required. In an attempt to gauge the effects of Jeff D., Iconducted structured interviews with ten public interest practitioners. Theseinterviews addressed the following topics. Do defendants regularly createfee-related conflicts for public interest lawyers? If so, do public interest attorneysregularly find themselves forced to miss out on fee awards because of theseconflicts? What strategies do plaintiffs' lawyers use to deal with fee waiverrequests or the simultaneous negotiation of fees and merits? How effective arethese strategies? Do practices differ in California where the bar allows the"limited retainer" solution?

I interviewed attorneys who work for non-profit organizations that focus onplaintiff-side litigation and regularly seek attorney fee awards.1s2 The attorneys'

178. For example, if the client is an organization with its own general counsel then a limited retainer shouldbe acceptable.

179. See Peter A. Joy, Making Ethics Opinions Meaningful: Toward More Effective Regulation of Lawyers ,

Conduct, 15 GEO. J. LEGAL ETHICS 313, 377-81 (2002).

i 80. See id. at 382.i 81. Joy also argues that such a system wil improve the quality of ethics opinions and make the process

fairer. See id. at 377-81.i 82. The attorneys interviewed have pursued fee awards under a variety of statutes including the Ci viI Rights

Attorney's Fees Awards Act, the Clean Air Act, the Clean Water Act, the Fair Labor Standards Act as well asstate fee-shifting statutes. Telephone Interview with Attorney I (Oct. 3, 2002) (on file with author); TelephoneInterview with Attorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview with Attorney 3 (Oct. 8,2002) (on file with author); Telephone Interview with Attorney 4 (Oct. 10, 2002) (on file with author);Telephone Interview with Attorney 5 (Oct. 152002) (on file with author); Telephone Interview with Attorney 6


practice areas included environmental law, immigrants' rights, employmentdiscrimination, prisoners' rights and general civil rights.1s3 The interview sampleis fairly small and was not selected via any rigid and scientific randomizationprocess. Nevertheless, I attempted to interview lawyers from diverse regionswithin the U.S. and with diverse public interest experience. Thus, the interviewsshould at least uncover general trends and reveal the most common tacticsemployed by public interest lawyers. The sample reflects my own biases as towhat constitutes "public interest" practice. This is largely unavoidable. I hopethat my choices reflect a fairly conventional view of progressive public interestlawyering.is4

My empirical work overlaps with Julie Davies' study. Davies engaged in abroad study of the effects of Supreme Court decisions in statutory fee cases.ISSDavies interviewed 35 lawyers.IS6 Most of these attorneys were practicing in theSan Francisco Bay Area and most were in private practice.IS7 Davies' study wasfocused on the financialimpact of Supreme Court decisions on plaintiff-side civilrights practice.ISS My interviews also covered this topic although I focusedexclusively on non-profit practice. The results of my interviews were consistentwith Davies' results wherever our work overlapped. Thus, my interviews providegood confirmation of the accuracy of Davies' research.is9 My interviews expandon Davies' study by covering the ethical challenges of Jeff D. in detaiL.

A. mSTICE BRANNAN'S HORROR STORY

Justice Brennan predicted that, in the wake of Jeff D., defendants would seekfee waivers as a matter of course.190 He also predicted that lawyers would advisetheir clients to accept these fee waiver offers.191 This would make it harder forplaintiffs' attorneys to secure fees and wil make attorneys far more reluctant to

(Oct. 16,2002) (on file with author); Telephone Interview with Attorney 7 (Nov. 1,2002) (on file with author);Telephone Interview with Attorney 8 (Nov. 13,2002) (on file with author); Telephone Interview with Attorney 9

(Nov. 13, 2002) (on file with author); Telephone Interview with Attorney 10 (Nov. 15, 2002) (on file withauthor).

183. It is worth noting that no interviewees work for legal services organizations receiving funding from theLegal Services Corporation ("LSC"). See id. The reason for this is simple: organizations receiving LSC fundscannot pursue statutory attorneys fee at all. See 45 C.F.R. § 1642 (2003). Thus, thanks to Congressionalbeneficence, their practice falls outside of the scope of this Note.

184. See the attached Appendix for more discussion ofthe interview methodology and a brief description ofthe practice of each interviewee.

185. See Davies, supra note 7.186. Id. at 204.187. Id. at 204-05.188. Id. at 199-202.189. The value of this confirmation is supported by the fact that my study was designed and conducted

without the potential prejudicial effect of already knowing Davies' results.190. See Evans v. Jeff D., 475 U.S. 717, 758 (1986) (Brennan, 1. dissenting).191. See id.


take plaintiff-side civil rights cases.192 Justice Brennan's prophecy involves threeindependent claims. First, defendants wil routinely make settlement offersconditioned on fee waivers. Second, plaintiffs wil accept these offers. Third, thefirst two factors wil combine to reduce the supply of plaintiffs' lawyers.

I asked interviewees if they had ever received an offer that included adequaterelief for their clients but was conditioned on a waiver of fees. The responsesindicate that Justice Brennan was overly pessimistic. Five attorneys reportedhaving never received such an offer.193 Three lawyers had encountered fee

waivers infrequently.194 One lawyer noted that, while he did frequently receivesettlement offers that did not include fees, these fee waivers were usually tied toearly "trial balloon" offers that were clearly unacceptable to the client.19S Only

one attorney stated that he frequently received fee waiver requests tied to offersof adequate relief on the merits.196

Some interviewees speculated as to why they do not face fee waivers morefrequently. One lawyer suggested that there "may be a lack of knowledge withinthe defense bar" about Jeff D. and the potential for reducing exposure via feewaiver requests.197 Another interviewee suggested that defense lawyers could bemotivated by concerns about mutual cooperation.19S She noted that litigators aresometimes reluctant to use hard-nosed tactics for fear of retaliation. Preventingyour opponent from getting paid is likely to create antipathy and impedecooperation.199

This Note focuses on fee-related conflicts faced by plaintiffs' attorneys. It isworth noting, however, that defense lawyers also have a potential conflict ofinterest. Outside defense counsel have no interest in securing fee waivers as theyare generally paid by the hour. Defense lawyers have an interest in the health ofthe plaintiffs' bar that is not shared by defendants. The lawyers do not want theopposition to go out of business. Moreover, the defendants are probably not

192. See id. The holding of Jeff D. is generally extended to other fee-shifting statutes. See supra notes 67-7 iand accompanying text. Thus, this prediction should apply in other fee-shifting contexts.

193. See Telephone Interview with Attorney I (Oct. 3, 2002) (on file with author); Telephone Interview withAttorney 4 (Oct. 10,2002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on fiewith author); Telephone Interview with Attorney 8 (Nov. 13,2002) (on file with author); Telephone Interviewwith Attorney 9 (Nov. 13,2002) (on file with author).

194. See Telephone Interview with Attorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview withAttorney 3 (Oct. 8,2002) (on fie with author); Telephone Interview with Attorney 5 (Oct. 152002) (on fie withauthor).

195. See Telephone Interview with Attorney 7 (Nov. 1,2002) (on file with author).196. See Telephone Interview with Attorney 10 (Nov. 15,2002) (on file with author). Of the interviewees,

this attorney has a unique perspective on settlement. This is because he usually serves in the capacity ofin-house counsel to a community organization. Thus, he is usually the client rather than the lawyer. See id.

197. See Telephone Interview with Attorney 9 (Nov. 13,2002) (on file with author).198. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author). This attorney said there is

a sense that "we are all lawyers" and there is an understanding that, as long as the case has some merit, then atleast some fees should be awarded. Id.

199. It would be hard to imagine a bargaining tactic more likely to antagonize opposing counseL.


aware of the power of settlement offers conditioned on fee waivers. Thus, defensecounsel would need to disregard his or her own interest and suggest the feewaiver. This conflict may partially explain why fee waiver requests are lessfrequent than was anticipated,zoo

Although my sample size is not large, the interviews strongly indicate that thecrucial first element of Justice Brennan's prediction was inaccurate,zoi Defen-dants da not seek fee waivers as a matter of course?02 This does not mean,

however, that Jeff D. has not had a negative impact on the plaintiffs' bar. A singlefee waiver can have a devastating effect on a small public interest offce.203 Themere possibilty of a fee waiver request may influence settlement negotiations.Moreover, plaintiffs' attorneys stil face conflicts related to the simultaneousnegotiation of fees and merits.

B. SIMULTANEOUS NEGOTIATION: LUMP SUM OFFERS

I asked interviewees if they had received settlement offers of a single lumpsum intended to cover both fees and damages. Two attorneys reported that, asthey focus on injunctive relief, defendants could not offer to settle fees and meritswith a single lump sum.204 The remaining interviewees .all regularly receivelump-sum offers.20s Some interviewees receive lump sum offers in the majority

200. See Davies, supra note 7, at 220. Some of Davies' interviewees also speculated that this conflict is partlyresponsible for the rarity of fee waiver requests. See id. at 220.

201. See Telephone Interview with Attorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview withAttorney 4 (Oct. 10, 2002) (on file with author); Telephone Interview with Attorney 5 (Oct. 15 2002) (on fiewith author); Telephone Interview with Attorney 9 (Nov. 13, 2002) (on file with author). Together, the teninterviewees have many years of experience litigating under a variety of fee-shifting statutes. At least fourinterviewees have been practicing since Jeff D. was decided in 1986. See Telephone Interview with Attorney i

(Oct. 3, 2002) (on fie with author); Telephone Interview with Attorney 2 (Oct. 7, 2002) (on fie with author);Telephone Interview with Attorney 3 (Oct. 8, 2002) (on file with author); Telephone Interview with Attorney 4

(Oct. 10,2002) (on file with author); Telephone Interview with Attorney 5 (Oct. 152002) (on file with author);Telephone Interview with Attorney 6 (Oct. 16, 2002) (on file with author); Telephone Interview with Attorney 7

(Nov. 1,2002) (on file with author); Telephone Interview with Attorney 8 (Nov. 13,2002) (on file with author);Telephone Interview with Attorney 9 (Nov. 13,2002) (on file with author); Telephone Interview with Attorney10 (Nov. 15,2002) (on file with author).

202. See Davies, supra note 7, at 215-16. This finding is consistent with Davies' research. Thus, it appearsthat fee waivers are rare for both the for-profit and non-profit plaintiffs' bar.

203. See Telephone Interview with Attorney 4 (Oct. 10,2002) (on file with author); Telephone Interviewwith Attorney 10 (Nov. 15, 2002) (on file with author). A fee award in a large case could be more than an entireyear's budget for a smaller public interest offce.

204. See Telephone Interview with Attorney 7 (Nov. i, 2002) (on file with author); Telephone Interview withAttorney 10 (Nov. 15,2002) (on file with author). These attorneys are both environmental lawyers.

205. See Telephone Interview with Attorney I (Oct. 3, 2002) (on file with author); Telephone Interview withAttorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview with Attorney 3 (Oct. 8,2002) (on fie withauthor); Telephone Interview with Attorney 4 (Oct. 10, 2002) (on file with author); Telephone Interview withAttorney 5 (Oct. 152002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on filewith author); Telephone Interview with Attorney 8 (Nov. 13,2002) (on file with author); Telephone Interviewwith Attorney 9 (Nov. 13,2002) (on file with author).


of their cases?06Defendants "never seem to care" how the lump sum is divided.207 Thus,

attorneys regularly face the exact situation the Third Circuit had hoped toprevent. The Prandini Court hoped that prohibiting' simultaneous negotiationwould prevent a situation "having, in practical effect, one fund divided betweenthe attorney and client."20s I asked interviewees how they respond to this difficultsituation.

When faced with a lump-sum offer (or any offer), all interviewees askdefendants to separate the negotiation of relief on the merits and fees. Thisusually involves asking the defendant to negotiate relief on the merits first andthen allow a petition to the court for attorney's fees. All of the interviewees

employ this tactic, although it is spectacularly unsuccessfuL. Only one lawyer hadsucceeded with this tactic on more than an occasional basis?09 In fact, manyinterviewees reported that, after Jeff D., no defendants were wiling to settle onthe merits first and then allow the court to determine fees?1O

It may appear that the lump sum offer leaves the plaintiff's attorney in anuntenable position. The attorney cannot subtract a portion of the lump sum forfees without prejudicing the interest of the client. The ethical challenge of thissituation is not as acute as it may seem, however. This is because the firstlump-sum offer is usually inadequate for the client even if no money is deductedfor a fee?l1 Thus, the lawyer can refuse the offer and attempt to negotiate a newoffer that includes more money for the client as well as a separate fee award.

Attorneys can try to get the defendant to separate future offers into separateamounts by asking the defendant "how they are coming up with theirnumbers."212 The defendant may be calculating the lump sum by adding damages

206. See Telephone Interview with Attorney I (Oct. 3, 2002) (on file with author); Telephone Interview withAttorney 2 (Oct. 7, 2002) (on file with allthor); Telephone Interview with Attorney 5 (Oct. 152002) (on file with

author); Telephone Interview with Attorney 8 (Nov. 13,2002) (on file with author); Telephone Interview withAttorney 9 (Nov. 13,2002) (on file with author).

207. See Telephone Interview with Attorney i (Oct. 3,2002) (on file with author).208. Prandini v. Natl Tea Co., 557 F.2d 1015, 1021 (1977).

209. See Telephone Inter~iew with Attorney io (Nov. 15,2002) (on file with author). This attorney reportedthat defendants were wiling to allow the court to determine fees in approximately 50 percent of cases. Id. Hereported thatstate and federal defendants were the most likely to accept this request. Id.

210. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author); Telephone Interview withAttorney 3 (Oct. 8,2002) (on file with author); Telephone Interview with Attorney 5 (Oct. 152002) (on file withauthor); Telephone Interview with Attorney 6 (Oct. 16, 2002) (on file with author); Telephone Interview withAttorney 8 (Nov. 13, 2002) (on file with author). Davies reached similar results. She reports that "(sJomeplaintiffs' attorneys stated that they have requested bifurcated negotiation of fees and merits since Jeff D., butthese requests are usually refused." See Davies, supra note 7, at 217.

2 i I. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author); Telephone Interview withAttorney 3 (Oct. 8,2002) (on fie with author); Telephone Interview with Attorney 5 (Oct. 152002) (on file withauthor); Telephone Interview with Attorney 7 (Nov. 1,2002) (on file with author); Telephone Interview withAttorney 9 (Nov. 13,2002) (on fie with author).

212. See Telephone Interview with Attorney 5 (Oct. 15,2002) (on file with author).


to a fee award. Amore common method is to make a counter offer.213 The counteroffer wil include a damages award larger than the total amount of the first offerplus a separate fee award. This means that the lawyer improves the result for theclient while stil getting fees into the equation. The final series of offers and

counter offers wil usually involve separate sums for fees and damages. Thus,public interest lawyers are usually able to avoid finishing with a lump sum.

There is an important exception to this pattern. This is when the earlylump-sum offer seems adequate for the client. In this situation, attorneys wiloften recommend that the client accept the offer, requiring the lawyer to forgo afee.2I4 Attorneys are reluctant to ask a client to support the pursuit of fees in theearly stages of litigation because the cost to the client could be very highcompared to the benefit to the attorney's organization. Thus, public interestlawyers can miss out on recovering fees due to lump-sum offers that, at least insome circuits, were prohibited before Jeff D.

C. SIMULTANEOUS NEGOTIATION: RELYING ON ATTORNEY-CLIENTSOLIDARTY

The interviewees do not usually find themselves in a situation where the endresult of settlement negotiations is a single sum to divide between fees anddamages. This does not end the ethical difficulties, however. Although defendantseventually separate offers into two amounts, the defendants are probably moreconcerned with overall liabilty. Defendants may stil be wiling to increase onepart of the offer at the expense of the other.2ls Thus, any increase in fees maycome at the expense of the client. This is the most common form of fee-relatedconflict faced by the interviewees.

Although perspectives on this problem varied, one tactic was employed byalmost all of the interviewees. The majority of interviewees focused on the"attorney-client" solidarity tactic outlined in Par II(B), supra. The intervieweesdescribed this strategy in terms of careful client selection and client education?16These lawyers try to select clients who have an interest in the broader policy

213. See Telephone Interview with Attorney I (Oct. 3,2002) (on file with author); Telephone Interview withAttorney 3 (Oct. 8, 2002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on fie withauthor); Telephone Interview with Attorney 8 (Nov. 13,2002) (on fie with author).

214. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author); Telephone Interview withAttorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on file with

author); Telephone Interview with Attorney 9 (Nov. 13,2002) (on file with author).215. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author). Recall the claim that

"defendants never seem to care" about the separation of fees and merits. See id.216. See Telephone Interview with Attorney i (Oct. 3, 2002) (on fie with author); Telephone Interview with

Attorney 3 (Oct. 8, 2002) (on file with author); Telephone Interview with Attorney 4 (Oct. 10,2002) (on file with

author); Telephone Interview with Attorney 5 (Oct. 15 2002) (on file with author); Telephone Interview withAttorney 6 (Oct. 16, 2002) (on file with author); Telephone Interview with Attorney 7 (Nov. I, 2002) (on filewith author); Telephone Interview with Attorney 8 (Nov. 13,2002) (on file with author); Telephone Interviewwith Attorney 9 (Nov. 13, 2002) (on file with author). Importantly, these attorneys all outlined very similar


issues behind any litigation and are sympathetic to the overall mission of the legalorganization. They then educate clients about the importance of attorneys' fees tothe lawyers' organization and mission,z17 Attorneys hope that, given that clientshave ultimate control over settlement decisions, sympathetic clients are morelikely to be supportive of the lawyers' interest in securing fee awards.

One lawyer explained his organization's strategy as follows. He said that "welook carefully at who we choose as clients.'i2S They explain to clients "that weare a non-profit and we want to establish good law and policy.',2I9 They try toensure that clients understand that it can be difficult and time consuming torecover damages. Clients are also informed that fee awards are important for thefinancial viabilty of the organization. He feels that "we've been blessed withclients who understand how we stay afloat and the public importance of what wedo.'i2O Although this attorney had never received a fee waiver request, he

believed that most of his clients would refuse such an offer.Other interviewees shared these sentiments. One attorney had "always been

impressed by how 'supportive clients are of our desire for attorneys' fees.'i2IAnother attorney reported an occasion where clients placed a higher priority onfees than the attorneys.222 The attorney had recommended that a matter be settledwithout fees but the clients held out. The clients hoped a fee award would act as adeterrent and make an example of the defendant. This ilustrates the symbolicvalue that fee-shifting can have for clients.

223

Interviewees were alert to the danger that clients wil give insufficient weightto their own interests or wil feel pressured into sharing the lawyer's desire forfees. One attorney noted that this risk is amplified by the fact that clients almost

tactics in response to an open ended and non-leading question about how they deal with simultaneousnegotiation.

217. See Telephone Interview with Attorney i (Oct. 3, 2002) (on fie with author); Telephone Interview withAttorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview with Attorney 3 (Oct. 8,2002) (on file withauthor); Telephone Interview with Attorney 4 (Oct. 10, 2002) (on file with author); Telephone Interview withAttorney 5 (Oct. 15 2002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16, 2002) (on fiewith author); Telephone Interview with Attorney 7 (Nov. i, 2002) (on fie with author); Telephone Interviewwith Attorney 8 (Nov. 13,2002) (on file with author); Telephone Interview with Attorney 9 (Nov. 13,2002) (onfie with author); Telephone Interview with Attorney 10 (Nov. 15,2002) (on file with author). All intervieweesreported that fees were an important part of their finances. The importance of fees varied. One attorney claimedhis organization would be fairly stable even without fees. See Telephone Interview with Attorney 2 (Oct. 7,2002) (on file with author). One organization received as much as 70 percent of their revenue from fees. SeeTelephone Interview with Attorney x (on fie with author) (attorney's identity omitted).

218. Telephone Interview witl1 Attorney 8 (Nov. 13,2002) (on file with author).219. Id.220. Id.221. Telephone Inteview with Attorney I (Oct. 3,2002) (on file with author).222. See Telephone Interview with Attorney 5 (Oct. 15,2002) (on file with author). This incident did not

involve a fee-shifting statute. Fees were available as an equitable remedy because the defendant was held incontempt under a prior order.

223. See discussion supra Part II(B)(l).


always follow their attorney's advice,z24 In response to this problem, attorneystake extra care to ensure that they find highly supportive clients for cases wherethey anticipate high costs and a greater need for fees. For example, one lawyerreported that her organization takes a different approach to large cases with wideimportance,z2s Sometimes, her organization wil face "bad actors" that cause

significant problems.226 In these cases, her organization wants litigation to have alasting impact on the behavior of the defendants. This means that early settlementis unlikely. Thus, fees are likely to be large. Her organization wil want clients"who buy into these goals at the start of the process.'i27 They make sure todiscuss the significance of the lawsuit, fees and the kinds of remedies they wouldlike to pursue,z2S This attorney's organization also handles cases "where we havea new defendant and the clients just want their money.',229 These cases are morelikely to settle early and involve a small fee award. As client solidarity andsupport are not as important for these cases, the organization wil not select theseclients as carefully. It appears that public interest lawyers take care to ensure thatthey only ask for significant support from clients they know to be sympathetic.This may help to minimize the danger of client coercion.

Client selection and education is clearly an important aspect of the practice ofmany public interest lawyers. Judge Wald suggested that "most public interestcounsel explain the financial details of the litigation well in advance to theirclients, and that few clients wil against the advice of counsel leap to accept asettlement that deprives counsel of fair compensation.',23o This appears to be an

accurate description of subsequent public interest practice with the non-profit sector.

D. LIMITED RETAINERS

I asked interviewees if they use limited retainers. I also asked interviewees ifthey are familar with any of the bar ethics opinions on this topic and if theywould consider using a limited retainer if they were approved by their local barassociation. One commentator has suggested that limited retainers are the mostcommon way to deal with fee-related conflicts?31 Thus, it might have beenexpected that interviewees ask their clients to. sign limited retainers. Surprisingly,my interviews strongly suggested that public interest attorneys do not frequentlyuse limited retainers.

224. See Telephone Interview with Attorney 4 (Oct. 10, 2002) (on fie with author).225. See Telephone Interview with Attorney 3 (Oct. 8,2002) (on fie with author).226. Id.227. Id.228. Id. These remedies are likely to include damages and significant injunctive relief. Sometimes they wil

pursue more radical options like trying to get a defendant arrested on criminal charges. Id.229. Id.230. Moore v. Natl Ass'n of Sec. Dealers, Inc., 762 F.2d 1093, 1112 n.l (D.C. Cir. 1985) (Wald, J.,

concurrng).23 i. See Larson, supra note i 07, at 844.


Only one interviewee uses a limited retainer,z32 This attorney works asin-house counsel for a community group and usually represents the client in anylitigation. His organization always agrees not to waive statutory attorney's feeswhenever they hire outside counseL. None of the remaining attorneys use limitedretainers.233 Thus, no interviewees ask clients to sign limited retainers.

Interviewees suggested that successful client selection and education canpreempt the need for a limited retainer. As one attorney put it, you "only need astrong retainer if you don't have trust and a good working relationship with yourclient."234 Many attorneys were concerned about the coercive nature of assertinga contract against a client. One said "the best insurance is having a client you arecomfortable with and on the same page with, I would hate to have to assert par ofa retainer against a client.'i2S Limited retainers could be seen as a threat to thecooperative relationship between the lawyer and client.

Retainers stil play a role in dealing with fee-related conflicts, however. Aretainer should clearly explain that the attorney wil seek attorney's fees and thatany fees awarded should be paid to the attorney,z36 The retainer can also be auseful tool for educating the client about what to expect from the litigation.

Interestingly, attorneys were not aware of the split between the California Barand other bar associations on the issue of limited retainers. The attorney who usesa limited retainer does practice in California. However,. he did not know that hislocal bar is the only one that approves of limited retainers. In fact, intervieweeswere not aware of any of the ethics opinions.237 Thus, the ethics opinions cannotexplain the reluctance to use these retainers. Ethical concerns were stil relevant,however. For example, upon being asked if he used a limited retainer, oneattorney responded immediately that such a retainer is unethical because clientsmust control settlement decisions.23s

232. See Telephone Interview with Attorney 10 (Nov. 15,2002) (on file with author).233. See Telephone Interview with Attorney i (Oct. 3, 2002) (on fie with author); Telephone Interview with

Attorney 2 (Oct. 7, 2002) (on fie with author); Telephone Interview with Attorney 3 (Oct. 8,2002) (on file withauthor); Telephone Interview with Attorney 4 (Oct. 10,2002) (on file with author); Telephonelnterview withAttorney 5 (Oct. 15 2002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on filewith author); Telephone Interview with Attorney 7 (Nov. 1,2002) (on fie with author); Telephone Interviewwith Attorney 8 (Nov. 13,2002) (on fie with author); Telephone Interview with Attorney 9 (Nov. 13,2002) (onfile with author).

234. Telephone Interview with Attorney 7 (Nov. 1,2002) (on file with author).235. Telephone Interview with Attorney 8 (Nov. 13,2002) (on fie with author).236. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author); Telephone Interview with

Attorney 6 (Oct. 16,2002) (on file with author); Telephone Interview with Attorney 8 (Nov. 13,2002) (on filewith author).

237. Davies does not mention limited retainers. See Davies, supra note 7. Thus, it appears that she did notuncover any usage of such retainers. Interestingly, Davies' study focused almost exclusively on attorneyspracticing in California and, presumably, was conducted shortly after the California Bar issued its ethics opinionapproving limited retainers in 1994. See CaL. Op. 1994-136, supra note 143. Although Davies does not revealexactly when she conducted her interviews, her article was published in January 1997.

238. See Telephone Interview with Attorney 9 (Nov. 13,2002) (on file with author).


I asked interviewees if they would use a limited retainer if this were permittedin their jurisdiction. Interestingly, this elicited a wide varety of responses?39 Oneattorney responded to the idea with enthusiasm?40 This lawyer had reported

some of the worst experiences with fee-related conflicts?41 Four intervieweesalso expressed interest in limited retainers but were slightly more cautions. Theseattorneys said that they would seriously consider using limited retainers if thiswas permitted in their jurisdiction?42 Four attorneys stated that they would notuse a limited retainer.243

Two of the attorneys expressing guarded interest in limited retainers said thatthese retainers would be helpful if they put defendants on notice that they cannotask for a fee waiver at al1?44 They hoped that a limited retainer would prevent aconflct of interest from arsing in the first place. If courts refused to enforce theretainers then they probably would not serve this purpose. One respondent wasvery sensitive to this issue. He specifically noted that he would not use a limitedretainer unless both the bar and the courts recognize such contracts,z4S

Some interviewees suggested that, even if they used limited retainers, thesecontracts would probably have a narow role. These attorneys said that theirorganizations would consider using limited retainers in a handful of cases,z46They would reserve limited retainers for cases in which they anticipate having toinvest a significant amount of money and time. Fee decisions in larger cases canhave a long-term impact on the health of a public interest organization,z47 Thus,attorneys have a very strong interest in avoiding fee waivers in large cases.

Four attorneys rejected the idea of using limited retainers,z4S One lawyer

239. It is worth noting that these responses were initial impressions. Telephone interviews do not leave muchtime for in depth consideration of the practical, ethical and legal dimensions of limited retainers.

240. See Telephone Interview with Attorney 4 (Oct. 10,2002) (on file with author).

24 i. See infra note 269 and accompanying text.242. SeeTelephone Interview with Attorney i (Oct. 3,2002) (on file with author); Telephone Interview with

Attorney 3 (Oct. 8,2002) (on fie with author); Telephone Interview with Attorney 5 (Oct. 152002) (on file withauthor); Telephone Interview with Attorney 6 (Oct. 16,2002) (on file with author).

243. See Telephone Interview with Attorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview withAttorney 7 (Nov. I, 2002) (on file with author); Telephone Interview with Attorney 9 (Nov. 13, 2002) (on fiewith author). The remaining attorney already uses a limited retainer. See Telephone Interview with Attorney io

(Nov. 15,2002) (on file with author).244. See Telephone Interview with Attorney 5 (Oct. 152002) (on fie with author); Telephone Interview with

Attorney 6 (Oct. 16,2002) (on file with author).245. See Telephone Interview with Attorney 5 (Oct. 15,2002) (on file with author).246. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author); Telephone Interview with

Attorney 3 (Oct. 8, 2002) (on file with author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on file withauthor).

247. For example, one attorney reported that his organization lost half of its staff as a result of a clientaccepting a low fee offer in a large case. See Telephone Interview with Attorney 4 (Oct. 10,2002) (on fie withauthor).

248. See Telephone Interview with Attorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview withAttorney 7 (Nov. 1,2002) (on file with author); Telephone Interview with Attorney 8 (Nov. 13,2002) (on filewith author); Telephone Interview with Attorney 9 (Nov. 13,2002) (on file with author).


believed clients should always control settlement decisions,z49 Another attorney

said that, although he thought that limited retainers might be acceptable on someoccasions, he preferred to leave settlement decisions to the client.2so He notedthat his organization is more financially stable than many legal non-profits. Heacknowledged that he might change his mind if he had a greater need for fees.Two attorneys suggested that limited retainers would interfere with theirrelationships with their clients,zsl They preferred to rely on client trust and arelationship of mutual support,zS2

The interviewee who already uses a limited retainer works as in-house counselfor a coalition of community groupS.2S3 He focuses on environmental

litigation.

This attorney reported receiving many settlement offers that included inadequatefee reliees4 He said that his organization would never accept such an offer.Moreover, in its retainer it explicitly agrees not to accept any settlement offer thatdoes not include fee award.

This attorney's testimony and experience provide strong support for allowinglimited retainers. He said that "we have to keep in mind that there is a limitednumber of plaintiffs' lawyers and our abilty to win fees is part of why we canattract good outside counsel."2SS The California Bar argued that allowing clientsto sign limited retainers extends the bargaining options for clients prior toinitiating representation?S6 The client may wish to sign a limited retainer to helpsecure competent representation. This is exactly how this in-house counselconceived of the limited retainer. His organization would be deprived of a usefultool if they were prohibited from using a limited retainer.

E. THE LEGACY OF JEFF D.

Jeff D. was not as devastating as many anticipated. This does not mean,

however, that it did not have a large negative impact on lawyers in the non-profitsector. Interviews suggest that fee waiver requests are not very common.Attorneys stil reported that JeffD. and simultaneous negotiation make it moredifficult for them to collect adequate fees.

249. See Telephone Interview with Attorney 9 (Nov. 13,2002) (on fie with author).250. See Telephone Interview with Attoiney 2 (Oct. 7, 2002) (on file with author).

251. See Telephone Interview with Attorney 7 (Nov. 1,2002) (on file with author); Telephone Interview with

Attorney 8 (Nov. 13,2002) (on file with author).252. Id. Both of these lawyers practice in California where the bar permits limited retainers. Id.253. See Telephone Interview with Attorney 10 (Nov. 15,2002) (on file with author).254. He also reported receiving "sweetheart" offers where excessive fees were offered together with

woefully inadequate relief on the merits. His organization (together with outside counsel) was once offered fivetimes the fee award to which they were entitled. This offer would have saved the defendant millons of dollars intotal liability. The interviewee's outside counsel wanted to accept the offer. The client rejected the offer andeventually settled for a large total package with a fair fee award. See id.

255. Id.256. See Cal. Op. 1994-136, supra note 143.


One interviewee practiced in the Third Circuit prior to Jeff D. when, underPrandini, simultaneous negotiation was prohibited?S7 He stated "we continue totake the position that the Prandini rule was the best way to handle fees."2ss Heclaimed that there is "no question that how you have to negotiate attorney's feesnow makes it more difficult to pursue fees."2s9 The diffculty is caused because"post Evans (v. Jeff D.), it has become more difficult to have an effective positionon fees that you adhere to right to the end of the line, unless you have a verystrong claim."26o It is hard to maintain a consistent position because this can dragout negotiations and hold up relief for the client. Then it "becomes an issue howmuch clients value a quicker settlement."261 Thus, Jeff D. "has forced us to be farless wiling to hold out on fees.,,262

Other attorneys agreed that Jeff D., while not devastating, did cause significantproblems. In particular, they complained about the uncertainty that the decisioncreates.263 Under the Prandini rule an attorney has much more control over thefee award. The defendant cannot make relief on the merits conditional on a feeoffer. Thus, in theory at least, plaintiffs' attorneys could counsel against acceptingany fee offer they felt was unreasonable without affecting the amount offered tothe client. Under Jeff D., attorneys have to consider how refusing a fee offer wilaffect their clients. Attorneys cannot predict how defendants are going tointertwine offers on fees and merits, nor can they predict how clients wil react toan offer.

Uncertainty about fee awards has negative effects as it makes budgeting verydiffcult.264 This can be a big issuewhen fees make up as much as 70 percent ofan organization's budget.26s Uncertainty about fees also contributes to a

wilingness to settle cases early without a fee award,z66 This can be true even

where clients are supportive of the attorney's desire to pursue fees. Attorneyswere reluctant to ask a client to risk a settlement unless their organization had

257. See Telephone Interview with Attorney 5 (Oct. 15,2002) (on file with author).258. Id.259. !d.260. Id.261. Id.262. Id.263. See Telephone Interview with Attorney i (Oct. 3, 2002) (on file with author); Telephone Interview with

Attorney 3 (Oct. 8, 2002) (on file with author); Telephone Interview with Attorney 4 (Oct. 10,2002) (on file withauthor); Telephone Interview with Attorney 5 (Oct. 15 2002) (on file with author); Telephone Interview withAttorney 6 (Oct. 16,2002) (on file with author).

264. See Telephone Interview with Attorney 2 (Oct. 7, 2002) (on fie with author).265. See Telephone Interview with Attorney x (on file with author) (attorney's identity intentionally

omitted).266. See Telephone Interview with Attorney i (Oct. 3,2002) (on file with author); Telephone Interview with

Attorney 2 (Oct. 7, 2002) (on file with author); Telephone Interview with Attorney 3 (Oct. 8,2002) (on file withauthor); Telephone Interview with Attorney 6 (Oct. 16,2002) (on file with author); Telephone Interview withAttorney 8 (Nov. 13,2002) (on file with author); Telephone Interview with Attorney 9 (Nov. 13,2002) (on filewith author).


devoted a significant amount of time to the case.267 The "result is that we oftenget less fees than we are entitled to, especially in smaller cases."26S

Interviewees reported that clients were generally very supportive of theirdesire to pursue fees. This does not mean that clients are always supportive,however. One attorney reported that his organization had "taken a bath" in a bigcase when, against advice of counsel, the client had accepted a settlement offerwith a very low fee award?69 He claimed that his organization laid off half of itsstaff as a result of this settlement. Thus, even if most cases go well, a single badexperience with simultaneous negotiation can have a big effect on a small legalnon-profit. Fear ofthis situation motivated the attorneys who would be wiling touse limited retainers.' They reported a desire to protect themselves in cases wherethey invest large amounts of time and resources.270

My interviews focused on public interest practice. Some interviewees sug-gested that Jeff D. has also had an effect on private practice. One intervieweeclaimed that Jeff D. has had a severe impact on the wilingness of private counselto take civil rights cases unless these cases involve the possibilty of winningsignificant damages and collecting a good contingency fee?71 He said "we're leftwith the situation that if the cop doesn't beat the guy up enough then no one'sgoing to bring the case."272 He said that civil rights cases were not intended to bepro-bono cases but, under Jeff D., they are seen in this way unless large damagesare anticipated,z73 Thus, Jeff D. may have increased the burden on public interestlawyers by reducing private counsel's wilingness to take cases.

iv. CONCLUSION

Public interest lawyers, while dedicated to the particular interests of theirclients, are also motivated by broader policy aspirations. Moreover, the clientsthemselves can be interested in broader policy goals. When clients share thepolicy goals of their lawyers, then clients should be made aware of the policyimplications of any settlement decision. This practice respects the autonomy ofclients by assuming that they can be motivated by more than narow self-interest.

267. Id.268. Telephone Interview with Attorney 3 (Oct. 8,2002) (on file with author).269. Telephone Interview with Attorney 4 (Oct. 10, 2002) (on file with author). The attorney believed the

offer also included inadequate relief on the merits. Id.270. See Telephone Interview with Attorney i (Oct. 3, 2002) (on fie with author); Telephone Interview with

Attorney 3 (Oct. 8,2002) (on file with author); Telephone Interview with Attorney 4 (Oct. 10,2002) (on file with

author); Telephone Interview with Attorney 6 (Oct. 16,2002) (on file with author).271. See Telephone Interview with Attorney 4 (Oct. 10,2002) (on file with author).272 !d.273. See id. Davies provides an extensive discussion confirming that attorneys in private practice are

reluctant to take cases with low damages. Her interviews revealed "that the damages rules (such as the holdingin Jeff D.) profoundly limit the wilingness of attorneys to take cases with low damages." Davies, supra note 7,at 234.


My interviews suggest that public interest lawyers do ask clients to consider thepolicy implications of settlement offers. This policy impact can include thefinancial consequences for the lawyer's own organization. Within the non-profitsector, this is the main tactic used to avoid the worst consequences of Jeff D. Thisstrategy is usually successfuL.

Although Justice Brennan's horror story about Jeff D. did not come true, thedecision has stil had a negative impact on public interest lawyers. After Jeff D.,attorneys are wiling to counsel clients to accept early offers that include no feeaward. Jeff D. has also created a risk that attorneys wil miss out on fees in largercases if the client is not supportive. This could lead to significant financialconsequences for a small organization handling a large case. Limited retainerscould provide protection for lawyers in the non-profit sector who are vulnerableto these risks. These retainers would also assist clients to find representation. Barassociations should follow California's lead and permit limited retainers.

ApPENDIX: METHODOLOGY

My assessment of the impact of Jeff D. draws upon original research. InOctober and November 2002, I conducted structured interviews with ten publicinterest lawyers. I used open-ended questions to elicit descriptions of theirexperiences and their personal perspectives on ethical issues.

I guaranteed that I would only describe the location and practice of eachinterviewee in general terms. This was to ensure that the attorneys feltcomfortable being candid when describing difficult ethical choices. I give a briefdescription of each interviewee below.

Attorney One: Works for a non-LSC funded legal services organization in theNorth East of the United States. Her fee award cases are brought under TitleVII, 42 U.S.C. § 1983 and state statutes. Interviewed October 3,2002.

Attorney Two: Has over twenty years experience as public interest lawyer inthe South East. He regularly seeks fee awards under the FLSA, Title VII and 42U.S.c. § 1983. Interviewed October 7,2002.

Attorney Three: Works for a non-LSC funded rurallegal services organizationin the Southeast. She mostly brings cases involving fee awards under the

FLSA. Interviewed October 8, 2002.

Attorney Four: This attorney focùses on Civil Rights practice under 42 U.S.c.§ 1983. He has over fifteen years experience as public interest lawyer in theNorth East. Interviewed October 10, 2002.

Attorney Fi ve: Works for a non- LSC funded rural legal services organization inthe Third Circuit. He mostly brings cases involving fee awards under theFLSA. Interviewed October 15,2002.

Attorney Six: Works for a non-LSC funded legal services organization in theNorth East. He has approximately eight years experience seeking fee awards

2004) THE LEGACY OF EVANS V. JEFF D.

under Title VII, 42 US.C. § 1983 and state statutes. Interviewed October 16,2002.

Attorney Seven: Works for a non-LSC funded legal services organization inCalifornia. He focuses on environmental litigation and regularly seeks attor-ney's fees under the Clean Air Act, Clean Water Act and state statutes.Interviewed November 1,2002.

Attorney Eight: Works for a non-LSC funded legal services organization inCalifornia. He focuses on immigrant rights and regularly seeks attorney's feesunderthe FLSA, 42 U.S.c. § 1983 and state statutes. Interviewed November 13,2002.

Attorney Nine: Works in private practice in the Northeast. Until recently, heworked for a rural non-LSC funded legal services organization and, prior tothat, he represented prisoners. He has sought attorney's fees under the FLSA,42 U.S.C. § 1983 and state statutes. Interviewed November 13, 2002.

Attorney Ten: Works as in-house counsel for a community organization inCalifornia. He focuses on environmental litigation. The attorney is in-housecounsel for the client in litigation. Interviewed November IS, 2002.

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Conflict and Solidarity: The Legacy of Evans v. Jeff D.

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