Certified Legal Professional (CLP) Practice Exam

Was the attorney who accepted the royalty-based payment arrangement subject to discipline?

1. Yes, because the attorney failed to advise the client about independent counsel

2. No, because the arrangement was documented

3. Yes, because the attorney must work for a standard fee

4. No, because contingent fee arrangements are permitted

The correct answer is: No, because contingent fee arrangements are permitted

The question about the attorney's royalty-based payment arrangement focuses on the permissibility of such an arrangement within legal ethics. The correct answer highlights that contingent fee arrangements are generally accepted in the legal profession, provided they adhere to specific ethical guidelines. Contingent fee arrangements, which often work on a royalty or percentage basis contingent upon a successful outcome, are allowed in many jurisdictions, particularly in areas like personal injury or other civil cases. This means that as long as the arrangement is clear, agreed upon by both the attorney and the client, and complies with applicable laws and ethical rules, it is permissible. The option indicating that the attorney should work for a standard fee reflects a misunderstanding of the flexibility allowed in legal fees. The mention of independent counsel relates to conflicts of interest that might arise in certain cases, but in the context of contingent fees, if the arrangement is clear and properly documented, the attorney fulfills the ethical requirement without needing separate independent counsel. Documentation of the arrangement is crucial, but the permissibility based on whether it is contingent or royalty-based is the core principle. Thus, in this scenario, as contingent fee arrangements are permitted, it supports that the attorney accepting such a payment method would not be subject to discipline merely for choosing that fee structure.