20050041 | Office of Legal Ethics Counsel & Advisory Committee of the Supreme Court of Missouri

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Informal Opinion Number: 20050041

Rules: 4–1.8

Client-Lawyer Relationship

Conflict of Interest: Prohibited Transactions

Subject: Business Transaction with Client (see also Conflict of Interest - Prohibited Transactions); Conflict of Interest - Prohibited Transactions (see also Business Transaction with Client)

Summary: payment of attorney fees via deed of trust and note payable by third party

QUESTION: Attorney A was asked to represent Client on separate felony matters. Client’s Mother and Father own property which is free and clear. Mother and Father are willing to execute a deed of trust and a note payable on the property. Attorney A explained to Mother and Father that Attorney A does not represent them and that Mother and Father would execute the note payable and deed of trust. Attorney A would prepare deed of trust and note payable but would have Attorney B, from a different firm, review the documents with Mother and Father. Legal fees for Attorney B would be advanced by Attorney A’s firm but would ultimately be charged to Client. An employment contract outlining the above would be executed by Attorney A and Client.

ANSWER: Attorney A may take a deed of trust as long as Attorney A closely follows the requirements of Rule 4 dash–1.8(a). Although Attorney B may provide a second opinion regarding the deed of trust, Attorney B would not necessarily be viewed as independent counsel in light of the fact that Attorney A obtained Attorney B’s services and will advance payment of fees. Attorney A is encouraged to read In re Snyder, 35 S.W.3d 380 (Mo. banc 2001), regarding this issue. Because the deed of trust is not from Client, Attorney A must also follow Rule 4 dash–1.8(f). Attorney A should explain to any third party who is providing consideration for representation that they do not have any right to information about the representation, that they have no control over the representation, and that what they say to Attorney A is not confidential. In most circumstances when a third party pays, it is useful to have an agreement about what happens to the funds if: (a) the representation is prematurely terminated, or (b) the representation terminates normally, but there are funds left, or (c) the third party demands his or her money back while the representation is ongoing.

Informal Opinions are ethics advisory opinions issued by the Office of Legal Ethics Counsel to members of the Bar about Rule 4 (Rules of Professional Conduct), Rule 5 (Complaints and Proceedings Thereon), and Rule 6 (Fees to Practice Law) pursuant to Missouri Supreme Court Rule 5.30(c). Written summaries of select Informal Opinions are published for informational purposes as determined by the Advisory Committee of the Supreme Court of Missouri pursuant to Rule 5.30(c). Informal opinion summaries are advisory in nature and are not binding. These opinions are published as an educational service and do not constitute legal advice.

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