In re Cooperman, 83 N.Y.2d 465 (1994)
Special nonrefundable retainer fee agreements are against public policy because they interfere with a client’s absolute right to terminate the attorney-client relationship.
Summary
Attorney Cooperman was disciplined for using special nonrefundable retainer fee agreements. These agreements required clients to pay a nonrefundable fee for specific services upfront, regardless of whether the services were fully rendered. The Grievance Committee warned Cooperman twice against using these agreements after receiving complaints from his clients. After a third complaint, formal disciplinary proceedings were initiated, and the Appellate Division suspended Cooperman from practice for two years, holding that the agreements were per se violative of public policy. The New York Court of Appeals affirmed, finding such agreements clash with public policy because they compromise the client’s right to terminate the attorney-client relationship.
Facts
Cooperman used three nonrefundable retainer fee agreements. One client paid $15,000 upfront for a criminal matter representation, with the fee being nonrefundable once Cooperman filed a notice of appearance. Another agreement involved a $5,000 nonrefundable fee for a probate proceeding, irrespective of the amount of work done. A third agreement stipulated a $10,000 minimum nonrefundable fee for representation in a criminal matter, even if Cooperman was discharged shortly after. In all three cases, Cooperman refused to refund any portion of the fees when the clients discharged him.
Procedural History
The Grievance Committee for the Tenth Judicial District initiated disciplinary proceedings against Cooperman. After a hearing, the Referee found violations on all 15 charges related to professional misconduct. The Appellate Division confirmed the Referee’s report on most charges, holding the retainer agreements were unethical, unconscionable, and violative of the Code of Professional Responsibility. The court suspended Cooperman for two years. Cooperman appealed to the New York Court of Appeals, which affirmed the Appellate Division’s order.
Issue(s)
Whether special nonrefundable retainer fee agreements violate public policy and the Code of Professional Responsibility.
Holding
Yes, because special nonrefundable retainer fee agreements inappropriately compromise the client’s right to sever the fiduciary services relationship with the lawyer.
Court’s Reasoning
The court emphasized the unique fiduciary nature of the attorney-client relationship, which requires the highest degree of trust and confidence. The Code of Professional Responsibility mandates that an attorney