February 2006
Ethics and the Law
Mom Pays for Son’s Dissolution — Now What? Any Ethical Problems?
by Nancy Bickford Miller
Ma Joad never liked her daughter-in-law Daisy Mae, and leaped at the chance to pay for Billy Bob Joad’s dissolution — though she called it a divorce. She expected to sit in on attorney meetings and receive copies of court documents and letters. But straight-arrow lawyer Tommy Swift had a problem. What about Rule of Professional Conduct (RPC) 1.8(f)? That rule provides that a lawyer who is representing a client in a matter:
(f) Shall not accept compensation for representing a client from one other than the client unless:
(1) The client consents after consultation;2
(2) There is no interference with the lawyer’s independence of professional judgment or with the clientlawyer relationship; and
(3) Information relating to representation of a client is protected as required by rule 1.6.
Ma was suspicious about the idea that Tommy wanted to meet privately with Billy Bob. She was even more upset after this private meeting when Billy Bob admitted that he loved Daisy Mae and that he actually wanted a “divorce” from his mother.3
In the real world, fee-paying by friends, relatives, or employers is not uncommon. But the paying party is often surprised that no rights are being purchased and that decisions regarding the representation must be made by the client. A related rule to RPC 1.8(f) is RPC 5.4(c), which provides:
(c) A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.
It is incumbent on the lawyer to make the relationship clear at the beginning of the representation, preferably in writing, perhaps including a warning of the pressures on the client that may occur from accepting another’s payment of the fee and of issues that may arise, depending on the type of representation. If the fee-payer and the client are asked to sign the attorney’s standard, unmodified fee agreement, without specific language addressing decision-making and confidentiality issues, the result may be ambiguity at best.
One question in the fee-paying relationship is how fees and billing will be handled. The attorney cannot provide detailed, narrative billing statements to the fee payer that disclose client confidences and secrets through the description of the professional services being rendered, unless the client consents.4
The client may want the fee-paying friend or other party to participate in attorney-client communication — for moral support or to give advice. But the client must make the decision, without duress, whether to allow the fee-payer to participate in meetings with counsel, or to receive copies of documents. (And the lawyer should consider the possibility of inadvertent waiver of attorney-client privilege.)
If an advance fee payment is made, an issue may arise as to who may make the decision to terminate the representation and who has the right to receive any fee refunds. WSBA Informal Opinion 1863 (1999)5 is illustrative of this type of problem, where a wife paid a flat legal fee and a cost deposit to her husband’s immigration lawyer and later asked to withdraw her sponsorship for the husband’s citizenship petition and for a fee refund.6 An important point for a written representation agreement is to address who will receive any refunds, e.g., from overpayments or advance fee deposits.7
If the client and the fee-payer are co-clients, issues may arise as to decision-making regarding conduct of litigation or upon discovery of misconduct, e.g., by an employee who is a codefendant with his employer, who is paying all legal fees. Will the employer pay legal fees for the duration of the litigation even if separate counsel becomes necessary because of a conflict? And will the employee’s new counsel be able to represent the employee without the possibility of interference from the fee-paying employer?
It is tempting to accept fees unquestioningly from a solvent payer on behalf of a client who may have financial problems — Ma Joad said she would pay lawyer Tommy Swift all cash, with revenues from a small retail distillery she owned. But carefully defining the relationship, including consideration of any pitfalls, will avoid future ethical problems.
Nancy Bickford Miller is a lawyer with the WSBA Office of Disciplinary Counsel. In private practice as a law-firm partner and corporate counsel, her practice emphasized commercial real estate and banking. She is a graduate of Stanford University and the University of Washington School of Law. She was recently appointed to the City of Seattle Ethics and Elections Commission. She has written and lectured on various topics, including real estate and ethics.
NOTES
1. This article does not address possible conflicts in insurance-funded representations or other types of indemnity defenses. It also does not discuss payment of criminal defense fees by one other than the defendant, although RPC 1.8(f) does apply to such payments.
2. “Consult” or “consultation” denotes communication of information reasonably sufficient to permit the client to appreciate the significance of the matter in question. (RPC Terminology section.)
3. See 1 Geoffrey C. Hazard Jr. and W. William Hodes, The Law of Lawyering § 12.13, for a discussion and illustrative examples of situations where the parent pays the legal fees for a child and how the analysis differs with adult and minor children.
4. See WSBA Formal Op. 195 (1999), (Disclosure of Client Confidences or Secrets in Detailed Billing Statements to Persons Other Than the Client; Consent of the Client to Insurer’s Review of Billing Statements by Outside Auditor; Ethical Compliance with “Billing Guidelines” of a Person Other than the Client).
5. Informal opinions are issued in response to specific inquiries, and reflect the opinion of the Rules of Professional Conduct Committee only. They are not individually approved by the Board of Governors and do not reflect the official opinion of the WSBA. Informal opinions can be accessed on the WSBA’s website at pro.wsba.org/io/search.asp.
6. The RPC Committee declined to address most questions posed by the inquiring lawyer, because of an absence of specific facts.
7. See also WSBA Informal Opinions 1014 (1987), 1925 (2000), 1978 (2002), and 2085 (2004), which cite RPC 1.8(f) but are based on somewhat specialized facts.
