17-01An attorney inquires about ACH transfers into IOLTA accounts, citing experience with transfers being reversed thereby leaving insufficient funds in the account, and asks whether accepting ACH transfers into IOLTA accounts complies with the Vermont Rules of Professional Conduct. An attorney can take steps to minimize the risk of an overdraft in an IOLTA account arising because of the reversal of an electronic funds transfer. If a reversal occurs, the attorney must act immediately to protect other clients’ funds or funds of third parties in the trust account that may be at risk as a result.
13-03 A Lawyer representing an indigent client may pay the interest charges accruing on a “non-recourse” loan made to the plaintiff in a lawsuit if the proceeds of the loan are used to pay court costs or expenses of litigation, but not if the proceeds of the loan are for personal expenses of the client. A lawyer representing a non-indigent client may advance such costs, the repayment of which may be contingent on the outcome of the matter.
10-01 In order to determine whether an attorney may pay his fees from funds held in his Trust Account, a determination must first be made as to who is legally entitled to the funds. With client consent, an attorney may withhold his or her fees due from client funds in the attorney’s possession. An attorney may not withhold fees from funds in the attorney’s possession if those funds are the property of someone other than the attorney’s client and that party does not consent.
09-05(1) Where, six years earlier, a law firm prepared proposed estate documents for a husband and wife at the husband’s request; where the husband and his various legal entities have been clients of the firm for thirteen years; where all information utilized for the preparation of the estate documents was provided by the husband/client; and where the firm’s only contact with the wife was to mail copies of the proposed documents to her; and where the husband and wife are now involved in a divorce proceeding, the firm may continue to represent the husband/client and his various legal entities in matters unrelated to the divorce proceeding.
(2) Additionally, the firm is entitled to secure the payment of its fees through a mortgage from the husband’s business entities as long as it satisfies the requirements of Rule 1.8 for a written agreement, after the client has been given an opportunity to seek advice of independent counsel.
08-03Lawyer’s proposal to share fees with a nonlawyer (mortgage broker) representing clients seeking reduced mortgage payments is impermissible fee-splitting. Lawyer may not form an LLC with the nonlawyer, who would own a minority interest in the LLC and be an employee, because to do so could impair Lawyer’s independent professional judgment. Lawyer may engage the services of the nonlawyer strictly as an independent contractor or employee but may only do so only with close and adequate supervision of the work product of the nonlawyer.
05-04 An attorney may charge a flat fee or a minimum fee, so long as the basis for the fee is understood by the client and the fee is reasonable when measured by Rule 1.5(a). Any advance payment remains the property of the client until earned and must be deposited in the attorney’s trust account. If, however, the client knowingly agrees the fee is “earned upon receipt,” it becomes the property of the lawyer and cannot go into the trust account.
02-04 This Opinion addresses a series of inquiries about handling client trust funds.
98-11 Fee splitting or sharing is permitted only with consent of the client and where the fee division fairly reflects the work and contribution of each attorney; a firm may not provide an after- the-fact thank-you gift as a gesture of goodwill to the attorney who referred a case to the firm.
98-09 This Opinion withdraws Opinion 96-10 issued by the Professional Responsibility Committee, which held that where the true owner of IOLTA trust account funds could not be identified, the requisite time period having passed, the prudent alternative was the transfer of the funds to the Vermont Bar Foundation, subject to repayment in the event the client later made claim to the funds.
98-08 A lawyer may not accept a fee from an investment advisor for referring clients to the advisor even with prior disclosure and consent by the client. Clients view recommendations to other professionals as part of their representation by their lawyers and expect their lawyers to act independently of any underlying financial interest in such a referral.
98-05 Compliance with the appropriate Disciplinary Rules is satisfied when a lawyer or a law firm transmits a ledger sheet or similar notification at the end of each calendar month, reflecting receipts for disbursements involving the client’s trust account. Withdrawal from a client’s trust fund of earned fees is allowed unless the fee is disputed by the client. Withdrawal may occur at the time the invoice is sent to the client. Should the client then dispute the transfer, immediate re-deposit of the funds into the trust account is required. Finally, no advance notice need be given the client before a disbursement is made from his or her trust unless the agreement between the parties requires such advance notice.
98-04 A lawyer may not agree to waive the expenses of court costs, expenses of investigation, expenses of medical examination, and costs of obtaining and presenting evidence unless the client is indigent or a party to a class action, and unless the client remains ultimately liable for such expenses.
97-13 A lawyer may agree with a client to charge an hourly fee which includes some or all disbursements, provided the client remains ultimately liable for actual litigation costs and the fee is “reasonable”.
97-10 An attorney whose client first agrees to a settlement and later refuses to endorse the settlement check may not accept a substitute check payable to the attorney as trustee on behalf of his client for deposit in his Trust Account and distribution.
97-07 Funds prepaid by a client for future legal services must be placed in a client’s trust and cannot be co-mingled with the attorney’s business funds. The attorney can access only that portion of the retainer which compensates the attorney for services previously rendered or costs incurred in the course of that client’s representation. An engagement letter and fee agreement signed by the client and law firm addressing these issues is strongly recommended. Disputes over whether the law firm can and should access funds held on deposit over a client’s objections should be referred to the Arbitration of Fees Committee of the Vermont Bar Association.
97-04 The requesting attorney has asked whether she may utilize the services of a professional collection agency in collecting accounts receivable from her clients.
96-10Where the true owner of trust account funds cannot be identified and where the funds, totaling less than $1,000, appear to have been abandoned, the most prudent alternative may be to arrange for the transfer of those funds to the Vermont Bar Foundation.
96-02 It is permissible for an assigned attorney to represent a criminal defendant even though the defendant (a) is subject to payment of a fee to a special fund for Public Defenders only upon being found guilty of an offense (DWI cases), and (b) may be required to pay part or all of the costs of representation by assigned counsel by order of court entered either at the time of assignment of counsel or subsequent to the assignment, including cases where the defendant is accused of violating probation for not having paid court-ordered sums to the Public Defender Special Fund.
95-12 An attorney may enter into a contingent fee agreement with the custodial spouse for collection of delinquent child support and spousal maintenance payments. The details of the contingent fee agreement must be made known to the court from which the appropriate order issues. Such agreements based on the value of future payments are not categorically prohibited by the Disciplinary Rules but should be limited to a reasonable percentage of the payments when they are received by the client
94-05 An attorney may, with the client’s consent, request that a client’s lump sum worker’s compensation benefits be mailed to the attorney, as long as the draft is made payable solely to the client. An attorney should not insist that a client’s current weekly disability payments be mailed to the attorney even if these benefits are made payable solely to the client.
94-04 An attorney may accept employment on a contingency fee basis to represent a client seeking temporary total disability payments in a worker’s compensation case, regardless of whether such payments are past due or not, provided that the fee is reasonable and not excessive under the circumstances.
91-17 An attorney may accept employment on a contingency fee basis to represent a client seeking past due temporary total disability payments in a workers compensation case.
91-03 (A) Upon request of the client an attorney may not refuse to deliver to the client the papers and property of the client, to which the client is entitled. (B) An attorney may not collect an excessive fee. (C) It is beyond the authority of this committee to answer questions of law related to the scope of the attorney’s lien and enforceability of retainer agreements.
89-10 The use of credit cards for payment of legal services and expenses is permitted under the Code of Professional Responsibility provided specified guidelines are followed.
87-13 An attorney may take a mortgage on a client’s home to secure payment of unearned but anticipated legal fees and expenses but may not take and record a mortgage unrelated to fees for the sole purpose of frustrating efforts of judgment creditors to collect the client’s debts.
87-09 If a lawyer after concluding all legal services is unable to refund a client’s excess retainer which remains unclaimed and abandoned for a period of seven years, the lawyer shall take the steps outlined in Chapter 13 of Title 27 pertaining to unclaimed property to dispose of these funds.
87-02 As a result of the deletion of Disciplinary Rule 2-103 (D) (4) (a) from the Code of Professional Responsibility, a lawyer may participate in a for-profit prepaid legal service plan under the Code of Professional Responsibility, provided the plan complies with the guidelines set forth in this Opinion. The lawyer must exercise independent professional judgment on behalf of the client, maintain all client confidences, avoid conflicts of interest, and practice competently. The lawyer also must insure that the plan does not involve improper advertising solicitation or fee sharing.
87-01 No ethical issue arises where a lender requires a borrower to pay attorney’s fees incurred by the lender in a loan transaction.
85-03 Although attorneys entering into settlement agreements are expected to abide by such agreements, it would not be unethical for the requesting firm to ask the court, after the fact, to re-open the question of whether attorney’s fees, allowed by statute, should be awarded.
82-09Attorney’s lien on client’s file
81-02 Attorney who formerly represented three partners in partnership-related matters is not disqualified from representing two remaining partners in dissolution negotiations with withdrawing partner, under facts presented.
80-10 Attorney not admitted to practice in Vermont, engaged by a Vermont attorney during period of fulfilling clerkship requirement for admission to the Vermont Bar under the supervision of the Vermont attorney, should be treated as a law clerk unadmitted to practice in the State of Vermont, with the Vermont attorney bearing full responsibility for work he performs for clients of the office. Fees generated by his efforts as attorney-clerk, or for client-generation, should be treated as any other income to the firm, but the attorney-clerk’s salary may properly reflect his value to the firm in these respects