A fee deposit or advance payment from a client to an attorney for services to be performed in the future remains the property of the client until it is earned by the attorney. Such an unearned fee deposit generally must be held in the attorney’s trust or escrow account and not deposited into the attorney’s operating account or otherwise accessed until the attorney has done the work and earned the fee.

If the client or the attorney terminates the representation at any time, the attorney generally must return the unearned portion of the fee to the client. The terms of the engagement letter or agreement between the attorney and client may impact the attorney's obligation to return unearned fees, and a potential client should read and understand it.

In North Carolina, when a client provides a fee deposit or advance payment to an attorney for future legal services, that money remains the client's property until the attorney has earned it through work performed. Attorneys in North Carolina are required to place such unearned fees in a trust or escrow account, in accordance with the North Carolina State Bar's Rules of Professional Conduct. These funds cannot be transferred to the attorney's operating account or used until the attorney has rightfully earned them by providing the agreed-upon services. If the attorney-client relationship is terminated before the attorney has fully earned the fee, the attorney is generally obligated to refund the unearned portion to the client. However, the specific terms of the engagement letter or agreement between the attorney and the client can affect the obligation to return unearned fees. Therefore, it is crucial for clients to thoroughly read and understand the terms of any agreement before entering into an attorney-client relationship.