State Bar of Montana

Ethics Opinion
851203

QUESTION PRESENTED: Can an Attorney Fee Agreement contain the wording "If a client fails to pay the above amounts [specified in agreement], the client authorizes the attorney to accept the latest offer on client's behalf and to receive his fee therefrom."?

ANSWER: No.

ANALYSIS: The attorney's fee agreement in question here is structured in such a manner that one only gets to the eventuality outlined in the question presented, after the following conditions have been satisfied:

  1. The case is a contingent fee case.
  2. An offer of settlement has been made which the attorney feels is reasonable and which the client rejects.
  3. Based upon the client's rejection, the attorney exercises the right reserved within the agreement to withdraw.
  4. 60 days pass and the client fails to pay the costs.

Under this scenario, the attorney appears to be asking whether, after withdrawing as attorney for client, he has authority to settle a case on his ex-client's behalf in 60 days. The answer to this question is obvious: no such authority exists. Even were the authority to exist, the logistical problems posed by this scenario are alone virtually insurmountable. During the 60 day period, numerous things may be expected to have occurred with the case: The client may well have retained new counsel; additional offers of settlement may have been made; the case may have been tried or settled. Even at the minimum, e.g., new counsel retained, the adverse party certainly would not continue to negotiate with, much less settle the case with the client's ex-attorney. Further, assuming offers of settlement have increased, how would ex-attorney have kept himself apprised of this. Obviously if the case had already been settled or tried, there is no longer an offer of settlement to be accepted.

Having addressed these logistical problems, pertinent and controlling sections of the Rules of Professional Conduct as adopted by the Montana Supreme Court will be cited. In this event, Rule 1.2(a) appears to be controlling and dispositive, dictating that the client's decision with regard to settlement must be final.

That rule reads in pertinent part:

A lawyer shall abide by a client's decision whether to accept an offer of settlement of a matter.

Since, according the Rules of Professional Conduct, an attorney must abide by a client's decision on the acceptance of an offer of settlement, then certainly an attorney after having withdrawn from the representation of a client would have no greater latitude in the acceptance of the offer.

Another Rule of Professional Conduct applicable to the inquiry is Rule 1.6(d). This Rule reads in pertinent part:

Upon termination of representation, a lawyer shall take steps to the extent reasonable practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee that has not been earned.

This requirement of taking steps to protect the client's interest upon withdrawal would not encompass the ex-lawyer's settling a case for an amount not approved of by the client.

In conclusion, the language would not be realistically feasible, nor would it be consistent with the Rules of Professional Conduct.

THIS OPINION IS ADVISORY ONLY

 

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