FOR YOUR PRACTICE | LAW OFFICE MANAGEMENT
"Earned Upon Receipt" for Attorney Fee Arrangements Ended in Maryland Effective July 2025 BY KELSEY B. WILLIAMS
Effective July 1, 2025, attorneys practicing law in Maryland may no longer state that their fees are “earned upon receipt” in their engagement agreements.
EFFECTIVE JULY 1, 2025, attorneys practicing law in Maryland may no longer state that their fees are “earned upon receipt” in their engagement agreements. Under the new, amended Rule 19-301.15, “[a]n attorney shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the attorney only as fees are earned or expenses incurred.” Under the expiring Rule 1.15, an attorney was permitted to deposit fees directly into their operating account if the client gave “informed consent, confirmed in writing[.]” Informed consent required that the attorney give their client any explanation reasonably necessary to inform the client of the material advantages and disadvantages of the proposed course of conduct and a discussion of the client’s options and alternatives. This Rule mirrored the District of Columbia Court of Appeals’ decision in In re Mance, 980 A.2d 1196 (D.C. 1
2009), which held for the first time that an attorney may treat fees as earned upon receipt with informed consent confirmed in writing. Importantly, this means that the Maryland Rule will no longer align with the District of Columbia’s version of the Rule.1 The Rule, therefore, no longer permits a “carve-out” for informed consent. The change to Rule 1.15 can be visualized as follows, with the new portions of the Rule highlighted and in bold: (c) An attorney shall deposit into a client trust
Compare Md. Rule 19-301.15(c) (eff. July 1, 2025), with D.C. R. Prof. Conduct, Rule 1.15(e) (stating that “[a]dvances of unearned fees and unincurred costs shall be treated as property of the client . . . unless the client gives informed consent to a different arrangement). See also Attorney Grievance Commission of Maryland, Notice: Changes to Maryland Rule 19-301.15, available at https://www.mdcourts.gov/ sites/default/files/import/attygrievance/pdfs/rule19_301_15changes.pdf.
MARYLAND BAR JOURNAL | VOLUME 7 ISSUE 1 93