NCSB Journal Spring 2026

peace—in exchange for Clients’ execution of a release that reads: We, [Clients], do hereby release [Lawyer and Lawyer’s law firm] from any and all liability for [the representation]. We also agree not to publish any negative com ments about [Lawyer] or her law practice. The consideration for this release is $750 from [law firm]. A check for that amount shall be mailed once this contract is signed in the presence of a notary and sent back to [Lawyer]. As a condition for resolving a fee dispute, may Lawyer obtain a collateral benefit—such as requiring Clients to sign a release of all lia bility claims arising from the representa tion—in exchange for a partial refund of the legal fee? It depends. Under Rule 1.5(a) of the Rules of Professional Conduct, a lawyer may not charge or collect an excessive fee. If, at the conclusion of the representation, Lawyer knows or should know that a portion of the fee collected was unearned, Lawyer must refund the unearned portion. Upon termina tion of representation, a lawyer shall surren der property to which the client is entitled and refund any advance payment of fee or expense that has not been earned or incurred. Rule 1.16(d). In such circumstances, Lawyer may not obtain a collateral benefit and condi tion the refund on Clients’ agreement to release all liability claims arising from the rep resentation. However, if after reviewing the circum stances Lawyer reasonably believes that com petent and diligent representation was pro vided but the Clients are dissatisfied, the fee is properly considered disputed. In that situ ation, and subject to the requirements of Rule 1.8(h), Lawyer may offer a partial refund in exchange for Clients’ execution of a release of all liability claims arising from the representa tion. Rule 1.8(h)(2) provides that “a lawyer shall not settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in con nection therewith.” Accordingly, before negotiating a release of potential claims, Lawyer must: Opinion #1:

1. Advise Clients in writing of the desir ability of seeking independent counsel; and 2. Provide Clients a reasonable opportuni ty to consult such counsel. Provided that these requirements are satis fied, Lawyer may include in a settlement agreement resolving the fee dispute filed with the State Bar a release of all claims related to the representation. Notwithstanding the fore going, the release may not include language that prohibits Clients from filing a grievance with the State Bar. See RPC84. Finally, the facilitators of the State Bar Fee Dispute Resolution Program have no author ity to determine when a fee has been earned. When there is a legitimate dispute over whether the fee was earned, the fee dispute process will conclude in an impasse. Lawyer and Clients may, however, negotiate settle ment terms—including any release—outside of the State Bar fee dispute process. Inquiry #2: Same facts as Inquiry #1. As a condition for resolving a fee dispute, may Lawyer obtain a collateral benefit—such as including a non disparagement clause in a settlement agree ment —in exchange for a partial refund of the legal fee? Opinion #2: It depends. If it is clear that Lawyer owes a refund, she may not condition the settle ment of the fee dispute with a requirement that Clients sign the release containing a non disparagement clause. If the fee is truly in dis pute, Lawyer may negotiate a settlement that results in the lawyer receiving the collateral benefit of a narrowly tailored non-disparage ment clause. See Opinion #1. A broadly worded non-disparagement clause—particularly one that bars a client from making any negative public com ment—could impermissibly restrict the client’s rights, including the ability to file a grievance with the North Carolina State Bar or to provide truthful public commentary about their legal experience. Such a clause can appear to coerce silence and deter clients from reporting legitimate concerns, which under mines the public interest in the regulation of the legal profession. While it is understandable that Lawyer wishes to protect her professional reputation, that interest must be balanced against the client’s rights and the lawyer’s ethical obliga tions under the Rules of Professional

Conduct. Any restrictions in a fee-dispute settlement agreement must therefore be nar rowly tailored. A non-disparagement clause is permissible so long as it: 1. Does not interfere with the client’s abil ity to file a grievance with the North Carolina State Bar or any other regulatory authority, or to participate in the disciplinary process; 2. Is not coercively presented as a condi tion of resolving the fee dispute; and 3. Does not limit the client’s access to the Fee Dispute Resolution Program or other disciplinary procedures. Lawyer and Clients may negotiate settle ment terms—including a narrowly tailored non-disparagement clause—outside of the State Bar fee dispute process. See Opinion #1. Inquiry #3: Lawyer entered into a representation agreement with Client, reading in part: You and the Firm agree and request that this retainer agreement will remain confi dential, and the parties agree that all mat ters involving the representation or any communications between attorney and client are to remain confidential on both sides. It is agreed by client that he/she shall refrain from any type of internet postings or public internet communications of any kind including social media, review sites, etc., with regard to any aspect of this rep resentation, and that any such postings may operate to waive confidentiality and expose certain amounts of client’s infor mation to the public. Full confidentiality by both sides is hereby confirmed before, during, and after the representation and is a condition to employment being accept ed by lawyer. May Lawyer include this provision in the representation agreement? Opinion #3: No. The Consumer Review Fairness Act (CRFA) of 2016 generally applies to lawyers and law firms, as it prohibits businesses from using non-disparagement clauses in form contracts that restrict consumers’ ability to post honest reviews. Consumer Review Fairness Act of 2016, Pub. L. No. 114-258, 130 Stat. 1355, sec. 2(b)(1)(A) (2016). This means that if a law firm uses a standardized contract with a clause preventing clients from leaving negative reviews, that clause is likely void under the CRFA. Id . Lawyers have a professional responsibility

45

THE NORTH CAROLINA STATE BAR JOURNAL