Have an Ethical Dilemma?
Ethical dilemmas affect every lawyer’s practice. This series of questions and answers appears each month in InsideTrack. The answers, offered by the State Bar’s ethics counsel Timothy Pierce and assistant ethics counsel Aviva Kaiser, are intended to provide guidance only and are not legal authority. Each situation will depend on the facts and circumstances involved.
As a State Bar member, you have access to informal guidance in resolving questions regarding Wisconsin’s Rules of Professional Conduct for Attorneys. To informally discuss an ethics issue, contact Pierce or Kaiser. They can be reached at (608) 229-2017 or (800) 254-9154, Monday through Friday, 9 a.m. to 4 p.m.
Nov. 19, 2014 – This month’s Ethical Dilemmas question offers guidance on whether a lawyer can include in an engagement letter a provision that delegates authority to settle to the lawyer or requires the lawyer’s consent before settling a matter.
A prospective client has contacted me about representing him in a Fair Debt Collection Practices Act case, which permits fee shifting. A colleague suggested that I include in the engagement agreement a provision requiring the prospective client to agree to continue prosecution of the matter through trial, unless I consent to settlement. Is this ethical?
Such a provision is a clear violation of SCR 20:1.2(a), which requires a lawyer to abide by a client’s decision whether to settle a matter. It is uncontroverted that the client controls settlement of the client’s matter, and lawyers who ignore the client’s instructions with respect to settlement or who settle matters without the client’s consent are routinely disciplined.
Lawyers may not circumvent this rule by drafting engagement agreements that delegate the authority to settle to the lawyer,1 or that require the lawyer’s consent to settle2. Furthermore, a lawyer’s engagement agreement may not impose financial penalties on a client who does not follow the lawyer’s advice with respect to settlement.3 Similarly, a provision in an engagement agreement that gave the lawyer the right to withdraw and receive quantum meruit compensation if the client rejected the lawyer’s settlement advice was found to be unethical.4 Settlement decisions – good, bad or indifferent – are for the client alone, and the lawyer must abide by those decisions.
1 See, e.g., North Carolina Ethics Op. 145 (1993).
2 See, e.g., New York County Ethics Op. 699 (1994).
3 See, e.g., Nebraska Ethics Op. 95-1 (1995); Connecticut Informal Ethics Opinion 99-18 (1999).
4 Philadelphia Ethics Op. 2001-1.