Nevada Rules of Professional Conduct

The Nevada Rules
of
Professional Conduct

Review conclusion

The Nevada Rules of Professional Conduct do not need to be reproduced or attached to the retainer agreement. I recommend deleting pages 4–8 containing NRPC 1.7, 1.8, 1.13, and 1.16. The agreement must comply with the applicable rules, but selectively attaching several rules is unnecessary and may create confusion about whether omitted rules apply.

More importantly, the appendix omits the rules most directly relevant to this agreement—NRPC 1.5 on fees and NRPC 1.15 on advance fees and trust accounts. (Nevada Legislature)

The following changes should be made before using this as a Nevada engagement agreement.

Highest-priority revisions

1. Clarify who the client is and narrow the scope

The current scope says only that the firm will provide “legal services, at your direction,” which is too open-ended. It also says that multiple attorneys “may serve as your in-house counsel.”

Replace it with language identifying:

The exact legal name of the client.
Whether the client is the company only, rather than its owners, officers, employees, affiliates, or subsidiaries.
The specific matter or categories of work covered.
Matters expressly excluded.
Whether litigation, appeals, tax advice, securities work, or local-counsel services require a separate agreement.

Suggested provision:

Identity of Client and Scope. Lex Tecnica represents [COMPANY LEGAL NAME] only. Unless separately agreed in writing, the Firm does not represent any parent, subsidiary, affiliate, shareholder, member, director, officer, employee, or other constituent of the Client. The representation is limited to [DESCRIBE MATTERS]. Any material expansion of the scope must be confirmed in writing by the Firm and the Client.

This is particularly important for an organizational client under NRPC 1.13.

2. Remove the statement that signing and payment “preserve” privilege

The first page says that signing and paying the retainer will “preserve the attorney-client privilege.”

That is too categorical. Privilege depends on the nature, purpose, participants, and confidentiality of particular communications—not merely execution of the agreement.

Suggested replacement:

Once this Agreement is signed and any required initial deposit is received, the Firm will commence the representation. Confidential communications made for the purpose of obtaining or providing legal advice may be protected by the attorney-client privilege and applicable duties of confidentiality, subject to applicable law and any exceptions.

3. Correct the monthly-retainer trust-account language

Option 2 states that the monthly amount will be placed in IOLTA, is “earned on receipt,” and will then be transferred to the operating account each month.

Those concepts conflict with one another. Under NRPC 1.15(c), legal fees paid in advance generally must remain in trust and may be withdrawn only as earned. (Nevada Legislature)

The agreement should choose one clearly defined structure:

Advance fee deposit: held in trust and transferred only as services are performed; or
True availability retainer: paid specifically to secure availability, not as payment for future services, with careful disclosure; or
Flat fee: earned according to expressly identified milestones, subject to refund of any unearned portion when required.

Do not describe the same funds as both an IOLTA deposit and immediately “earned on receipt.”

A safer revision would be:

The monthly advance fee deposit will be placed in the Firm’s client trust account. The Firm may withdraw funds from the trust account only as fees are earned and expenses are incurred, as reflected on periodic invoices. Any unearned balance remaining upon termination of the representation will be refunded, subject to the Firm’s right to retain amounts properly earned or incurred.

4. Rewrite Option 3 as a compliant hybrid contingent-fee agreement

Option 3 reduces hourly fees and imposes an additional 25% charge following a “Win.” This is likely a hybrid contingent arrangement because part of the fee depends on the result.

NRPC 1.5(c) requires a contingent-fee agreement to be signed and to state, in boldface type at least as large as the largest type in the agreement:

The precise method for determining the fee.
Applicable percentages at settlement, trial, or appeal.
How expenses are deducted.
Whether the client owes expenses regardless of outcome.
The possibility of liability for opposing-party attorney fees and costs.
The risk of malicious-prosecution or abuse-of-process liability for an improper suit. (Nevada Legislature)

The current provision does not contain all those disclosures. It also leaves several terms unclear:

What constitutes a “favorable” settlement?
Who determines whether a settlement is favorable?
Does “25% for all hours worked” mean 25% of the full standard hourly fees, 25% in addition to the deferred 45%, or another calculation?
Does the enhancement apply to appeal work?
What happens if the client terminates the firm before the result?
What happens if the matter results in partial success?
How are fee awards credited?

Option 3 should be a separate litigation-specific addendum, rather than one selectable paragraph in a general retainer.

5. Strengthen Option 4’s equity-fee disclosures

The agreement correctly recognizes the need for independent counsel and informed consent. However, acquiring equity from a client is a business transaction governed by NRPC 1.8(a).

The written terms should fully disclose:

The exact class and number or percentage of securities.
Fully diluted versus issued-and-outstanding ownership.
The valuation method.
Vesting and when equity is earned.
Dilution rights.
Voting and information rights.
Tax consequences and responsibility for tax advice.
Repurchase, termination, sale, and change-of-control treatment.
The firm’s role in preparing the equity documents.
That the firm is not advising the client about whether the transaction is financially favorable.
Written advice to seek independent counsel and a reasonable opportunity to do so.
A separate signed informed-consent acknowledgment.

NRPC 1.8(a) requires the transaction to be fair and reasonable, fully disclosed in understandable writing, written advice regarding independent counsel, and the client’s signed informed consent to the essential terms and the lawyer’s role. (Nevada Legislature)

This option also should be documented in a separate equity-fee addendum.

6. Remove unilateral modification of online terms

The agreement requires the client to comply with online terms that “may be modified from time to time.”

That creates a serious notice and assent problem, especially if the website can change fees, scope, dispute provisions, confidentiality terms, or termination rights after signature.

Recommended revision:

The Terms and Conditions dated [DATE], attached as Exhibit A, are incorporated into this Agreement. No amendment to this Agreement or the attached Terms and Conditions will be effective unless communicated to the Client in writing and accepted as required by applicable law and the Nevada Rules of Professional Conduct.

At minimum, save a fixed PDF or copy of the applicable online terms with every executed agreement.

7. State the hourly rates directly in the agreement

Option 1 refers to “posted hourly rates” on the website and provides the rates only as examples.

NRPC 1.5(b) requires the basis or rate of the fee and expenses to be communicated to the client, along with changes to those rates. (Nevada Legislature)

Use a fixed rate schedule:

Managing Partner: $___ per hour
Partner: $___ per hour
Associate: $___ per hour
Senior Paralegal: $___ per hour
Paralegal/Law Clerk: $___ per hour

Also specify billing increments and whether time is rounded—for example, one-tenth of an hour.

8. Define “Retainer” correctly throughout

The document uses “Retainer” to describe several materially different things:

An advance against hourly fees.
A monthly flat fee.
A litigation trust deposit.
A flat project fee.

Use separate defined terms:

Advance Fee Deposit
Monthly Fee
Cost Deposit
Flat Fee
Availability Retainer, only when genuinely applicable

This will reduce trust-account ambiguity.

Additional recommended provisions

The agreement should also include or improve:

Costs and expenses: Define filing fees, experts, travel, research, vendors, process servers, copying, and whether client approval is required above a threshold.
Invoices and disputes: State billing frequency, payment deadline, the deadline for raising questions, and that failure to object does not waive rights that cannot lawfully be waived.
Trust replenishment: Specify the minimum balance, timing for replenishment, and consequences of failure to replenish. The current requirement to replenish “promptly upon request” is vague.
Termination: Explain the client’s right to discharge the firm, the firm’s right to withdraw subject to NRPC 1.16 and tribunal approval, responsibility for earned fees and costs, refund of unearned funds, and file-transfer procedures.
File retention: State how long physical and electronic files will be retained and how the client will be notified before destruction.
Client responsibilities: Require accurate and timely information, preservation of evidence, availability for decisions, and notice of changes in contact information.
No guarantee: State that assessments of outcome are opinions only and that no result is promised.
Conflicts and affiliates: Avoid a blanket advance-conflict waiver unless it contains enough information for informed consent. A general conflicts provision can reserve the right to represent other clients in unrelated matters, subject to applicable rules.
Third-party payors: Include a provision addressing situations in which someone other than the client pays the fees, consistent with informed consent, professional independence, and confidentiality.
Local counsel and other firms: The agreement currently allows assignment to “other attorneys or other firms.” Clarify that outside counsel will not be retained at the client’s expense without appropriate notice or authorization and that any fee division will comply with applicable rules.
Jurisdiction and responsible attorneys: Because the letterhead identifies eight jurisdictions and notes that not every attorney is licensed everywhere, identify the lawyer responsible for the matter and the jurisdictions in which legal services will be provided.
Signature block: Add the client entity’s legal name, signatory’s title, email address, selected fee option, and initials beside the chosen option. The present signature section does not clearly memorialize which option was selected.

Recommended treatment of the NRPC appendix

Delete pages 4–8 and replace them with this single provision:

Professional Obligations. The Firm’s representation is subject to the Nevada Rules of Professional Conduct and other applicable professional obligations. Nothing in this Agreement is intended to limit duties that cannot lawfully or ethically be limited. In the event of a conflict between this Agreement and a mandatory professional obligation, the mandatory professional obligation will control.

The most urgent items are Options 2, 3, and 4, the incorporation of changeable online terms, and the overly broad scope. I would not use those options in their current form without Nevada ethics counsel approving the revised language.