Cate’s agreement violated the rule against limiting malpractice liability and the rule regarding written contingency fee agreements. It may have also violated her duty of competence, unless she engages in sufficient study for the case.

      The Virginia Rules of Professional Conduct provide that an attorney may not prospectively limit her personal liability for malpractice when entering into a representation agreement with a client. Cate violated this rule by accepting Phillip’s agreement not to sue Cate for malpractice.

      The Rules permit contingency fee agreements for most cases, except domestic relations cases generally and criminal cases. When an attorney enters into a contingency fee agreement, the attorney must provide a written explanation of the terms of the fee, including the contingency rate, how fees and expenses are calculated and whether fees and expenses will be taken before or after the contingency rate. The fee terms must be reasonable. Here, Cate failed to provide the required written disclosure of the contingency fee arrangement to Phillip. It may also be unreasonable for Cate to take such a high percentage.

      For fee agreements that are based on an hourly rate, the Rules do not require the fee agreement to be in writing, thought the Rules strongly suggest that the agreement be reduced to writing at the time the representation is entered into, or shortly thereafter. The terms of the fee agreement must be dislosed to the client and the client must consent, and the fee arragement must be reasonable. Here, although Cate did not provide a written recitation of their hourly fee arrangement, the terms appear to be reasonable, as Cate is charging only half of her regular rate for representation in an area in which she does not usually practice. It appears that she disclosed the arrangement to Phillip and he consented.

      The Rules require that an attorney represent her clients competently. Competence does not necessarily require expertise. It also does not prevent an inexperienced attorney from taking on cases, or an attorney taking on a case in a new field. However, if the attorney is not experienced in a particular field, she should either associate herself with another attorney who is competent in the field and who will be involved in the case, or she should engage in sufficient study to become competent in the field of law. Here, Cate is not a personal injury lawyer, but rather a newly admitted real estate lawyer. She does not have experience in personal injury, and she did not associate with an experience personal injury for Phillip’s case. However, Cate could become competent if she engaged in sufficient study. There is no indication whether Cate did or did not engage in this study, though winning the case suggests that she was at least minimally competent. Cate might have breached her duty of competence, but the facts do not provide sufficient information to make a firm conclusion.

      Cate did not violate an explicit prohibition on sexual relations with her client, though it was not wise and could potentially create a conflict of interest in the future and compromise her duty of loyalty to her client.

      The Rules do not explicitly prohibit sexual relations with a client. However, engaging in a sexual relationship with a client could lead to other violations of the rules. Most likely is a conflict of interest if the relationship turns sour. Here, the sexual relationship may complicate the existing dispute over the fee.

      Cate must pay Phillip immediately all funds in the account that are not in dispute and retain the disputed portion in the client trust account.

      The Rules require a lawyer to keep client funds separate from the lawyer’s funds in a client trust account. Cate properly deposited the $200,000 into the client trust account initially.

      The Rules require a lawyer to communicate with her client. Cate properly notified Phillip about the damages award by immediately advising him of her receipt of the check.

      When a lawyer and her client have a dispute regarding payment or funds, the lawyer must release to the client the amount that is not in dispute and retain in the client trust account the amount that is in dispute. Here, Cate believes that Phillip is owed $120,000 of the $200,000, and Phillip thinks he is owed $160,000. Therefore, Cate should remit $120,000 to Phillip immediately. The other $40,000 she should retain in the client trust fund until such time as their dispute is resolved, and then distribute the funds accordingly.

      A-B) Cate’s agreement to represent Phillip did violate the Rules of Professional Conduct (the RPC).

      Duty of Competence - Lawyers owe their clients the duties of competency, confidentiality, financial responsibility and loyalty. In this case, Cate breached her duty of competency by agreeing to represent Phillip in a matter in which she had no training or experience. She did state this to Phillip, but this disclosure and Philip’s decision to still hire her was not enough to satisfy the duty. Cate could have satisfied the duty by telling Phillip to find competent counsel, bringing on another lawyer who did have experience in personal injury suits, or making a successful effort to learn the relevant law before representing Philip.

      The Fee Arrangement for defending Philip against Jack’s claim:

      This fee arrangement violates the RPC. An attorney’s agreement with a client cannot require the client to waive his or her rights to sue for malpractice, which this one does in exchange for a discount in Cate’s hourly rate. This is against public policy.

      The Fee Arrangement for representing Philip in his counterclaim:

      Although contingency agreements are generally permissible when the representation is for a civil suit, the agreement must be reduce to writing and it must be reasonable. Cate and Philip never put their fee arrangement in writing. 40% also appears to be a bit high, but could be reasonable considering all circumstances. Nevertheless, the agreement was not put in writing, so it is invalid.

      C) Although Virginia does not explicitly prohibit sexual relationships between attorneys and clients, this relationship could still violate the RPC. In addition to the duties listed above, attorneys are required to comport themselves properly, maintain professional conduct and avoid the appearance of impropriety. This relationship could have influenced Cate’s decision to represent Philip, her choices relating to the fee arrangements and her decision to argue with him about the amount she is owed.

      D) Cate must go ahead and send Phillip the $120,000 that is not in dispute. She can hold the remaining $40,000 in her client trust account, but must not transfer it to her own account or do anything else with the disputed funds until the dispute is resolved. She also must not hold any of the documents related to Phillip’s case hostage as a way to encourage him to agree to her payment terms.