Ethics Opinon 1977-2
employed by Legal Aid, accepted, in the course of his employment,
the case of a client which had been refused by a number
of attorneys in private practice. The case was of the type
traditionally considered compensible by contingency fee.
Suit was instituted in behalf of the client and a $20,000
judgment was recovered, of which $18,000 constituted punitive
damages. Legal Aid, under its charter, was not permitted
to accept any fee for the case notwithstanding the nature
of the recovery and the ability of the defendant to pay.
The Legal Aid attorney handling the case subsequently terminated
his employment with Legal Aid and entered private practice.
The client requested a meeting with the attorney and gratuitously
tendered an unsolicited gift of $500 as a reward for the
fine quality of representation. May the attorney retain
the $500 and, if so, under what circumstances?
or unlawful conduct would be committed by the attorney in
retaining the $500 gift provided said gift was neither solicited
nor suggested by the attorney.
STATUTES, CANONS, AND LEGAL AID CHARTER SECTIONS
AID CHARTER SECTION
Legal Aid Society has adopted the Rules and Regulations
of the Legal Services Corporation, Federal Register, Vol.
41, 38505-06 (September 10, 1976). Part 1609, entitled Fee
Generating Cases provides that "in instances where
no private attorney is willing to represent an individual,
because the recovery of a fee is unlikely, the potential
fee is too small, or for some other reason", then legal
service lawyers may accept the case, provide legal assistance
and receive any award of attorney's fees. However, all of
said award must be remitted to the recipient-client, used
solely for purposes authorized by the Act, and reported
to Legal Aid.
aforementioned rules adopted by Legal Aid state under which
circumstances a legal service lawyer may accept a contingency
fee case (section 1609.4) and provides the procedure to
be followed in acceptance of fees awarded or approved by
AND CANONS OF ETHICS
and Professions Code section 6076 et seq., which contains
the California Rules of Professional Conduct does not have
a specific provision bearing on this subject. However, Rule
1-100 states: "Nothing in these rules is intended to
limit or supersede any provision of law relating to the
duties and obligations of attorneys or the consequences
of a violation thereof. . .". Thus, although the A.B.A.
Rules of Professional Conduct are not in effect in California,
they are nevertheless insightful with respect to the ethical
obligations of lawyers. Canon 5 of the A.B.A. Code states
that a lawyer should exercise independent professional judgment
on behalf of a client. Ethical consideration 5-5 thereunder
provides in relevant part:
lawyer should not suggest to his client that a gift be made
to himself or for his benefit. If a lawyer accepts a gift
from his client, he is peculiarly susceptible to the charge
that he unduly influenced or over-reached the client. If
a client voluntarily offers to make a gift to his lawyer,
the lawyer may accept the gift, but before doing so, he
should urge that his client secure disinterested advice
from an independent, competent person who is cognizant of
all the circumstances. . ."
Informal Opinion No. 1334 issued on May 27, 1975, states
that the Disciplinary Rules of the A.B.A. Code do not forbid
a Legal Aid organization from receipt of an award of attorney's
fees provided the court is fully informed of the circumstances.
ethics opinions issued by the San Diego County Bar Association
are relevant. Ethics Opinion 1974-9 state with respect to
Legal Aid clinic's acceptance of donations
Consideration 5-5 prohibits an attorney from suggesting
that a client make a gift to him. Disciplinary Rules prohibit
a lawyer from sharing a fee with nonlawyers. It is clear
that any donations requested and accepted must go only to
the clinic operational expenses and not to any attorney."
Opinion 1976-7, consistent with the newly promulgated Rules
and Regulations for Legal Services Corporations, defines
a "fee-generating" case as one in which a retainer
be made on a contingent fee basis, where there is reasonable
expectation of recovery of fees or where there is an immediate,
available corpus. When such is the case, then regardless
of the client profile, the case is to be labeled "fee-generating."
Opinion 1976-13 provides that any lawyer who performs services
for a client following termination of employment must divide
all fees generated therefrom with his former employer according
to the requirements of Rule 2-108(2).
it could be construed that the $500 gift was a fee, Ethics
Opinion 1976-13, based upon Rule 2-108(2) seems to dictate
the advisability of the attorney securing a release from
his former employer as well as the donor.
the opinion of this Committee that acceptance of the $500
would not constitute unethical conduct. Acceptance of the
case by Legal Aid was permissible under the Rules and Regulations
it has adopted. Provided the gift of $500 was neither sought
nor solicited by the lawyer, and was made wholly out of
the client's beneficence, the lawyer may ethically retain
said $500 so long as there exists no special contract between
the lawyer and his former employer. Ethical retention of
such a gift by a lawyer is premised on his/her compliance
with the following conditions:
lawyer obtain a written letter signed by the donor stating
that said donor is making a gift to said lawyer in a sum
certain, that said gift is for the benefit of the individual
lawyer and not for Legal Aid. That said donor has received
independent legal advice concerning the advisability of
making said gift or realizes he has a right to such advice,
but has chosen to forego such right, and
lawyer must disclose, in full, to the Board of Directors
of Legal Aid and obtain said Directors' written, informed
elementary that if said gift to the lawyer was, in fact,
for the payment of attorney's fees or approved by the court
or if the gift was solicited by the attorney in any manner
whatsoever, then said gift must be promptly remitted to
to the facts of this case, the lawyer has no ethical duty
to refuse or relinquish the $500 to his former employer--Legal
Aid. The Committee feels the same legal ethics should prevail
in the employment of attorneys by private law firms. However
in this regard, the Committee purports to make no decision
herein as to the propriety of lawyers retaining very large
sums of money or extremely generous gifts. The likeness
of such a gift to a fee payment is not decided today.
opinion is advisory only. It is not binding upon the State
Bar, the Board of Governors, its agents or employees.
This opinion was issued by the Legal Ethics Committee of
the San Diego County Bar Association. It is advisory only
and is not binding upon any member of the SDCBA, any other
member of the State Bar of California, the State Bar of
California or its Board of Governors, or any persons or
tribunals charged with regulatory responsibilities. The
SDCBA, its officers, directors, agents, and the Legal Ethics
Committee members assume no responsibility or liability
in rendering this opinion.