The Supreme Court of Virginia Addresses the Difference Between Retainers and Advanced Legal Fees
Swango v. Virginia State Bar, Record No. 241016 (Va. July 31, 2025)
Attorney Jason Swango operated a family law practice where he charged clients a $300 “non-refundable consultation fee” before meeting with them. When two clients either canceled or missed their appointments, Swango refused to refund the fees, having already deposited them into his operating account as “earned” money. The Virginia State Bar argued that this violated Rule of Professional Conduct (RPC) 1.5(a) regarding reasonable fees and RPC 1.15(a)(1) regarding safekeeping of client property.
Swango chose to have his matter heard before a three-judge circuit. The panel rejected Swango’s argument that RPC 1.5 contained a “scienter requirement,” meaning the Bar had to prove that he intended to violate the RPC. It also excluded the testimony of an “expert” witness who would have concluded that Swango’s policy did not violate the relevant RPCs, and that the RPCs and a related Legal Ethics Opinion (LEO) 606 was unclear as they pertained to non-refundable consultation fees. The panel found that Swango violated both RPCs. Swango appealed to the Supreme Court of Virginia, but that Court affirmed.
The central issue was whether these payments constituted “retainers” or “advanced legal fees.” True retainers are payments to secure a lawyer’s future availability—essentially paying to guarantee the attorney won’t represent your opponent or will be available if you need them later. These become the lawyer’s property immediately upon payment because they’re securing availability, not purchasing specific services. Advanced legal fees, however, are prepayments for specific legal services not yet performed. These fees remain the client’s property until the service is actually provided and must be held in a special trust account until the lawyer earns them by performing the promised work.
The Court examined Swango’s communications with clients, which promised specific services including meeting with a knowledgeable attorney, discussing case strategy, and providing legal advice on their domestic relations matters. Based on these specific service promises, the Court classified the payments as advanced legal fees that should have been held in trust until the consultations actually occurred. The court emphasized that LEO 1606, which clearly prohibited non-refundable advanced legal fees, provided adequate guidance that any reasonable attorney should have followed.
The Court found Swango violated RPC 1.5(a) by charging unreasonable fees since fees for unperformed services are per se unreasonable, and RPC 1.15(a)(1) by failing to safeguard client property by depositing unearned fees in his operating account rather than trust account. The Court rejected Swango’s good faith defense, explaining that attorney disciplinary rules focus on whether conduct was intentional, not whether the attorney intended to violate ethical obligations. The Court noted that ignorance of professional responsibilities doesn’t excuse violations, particularly for attorneys who are expected to understand their ethical duties. Finally, the Court affirmed the panel’s exclusion of Swango’s expert witness, holding that whether particular conduct violates professional conduct rules is a legal conclusion that experts cannot provide.