Ethics Opinions
Opinions and advice of the Professional
Ethics Committee, its members and assistants, are issued pursuant to
State Bar Bylaws, Article IV, Section 5. Opinions and advice are limited
to the facts presented, are advisory only and are not binding on the
courts, the Board of Attorneys Professional Responsibility or members of
the State Bar of Wisconsin. For more information or to request an
opinion be sent to you, review Wisconsin Lawyer's ethics opinion information.
E-96-1 (corrected): Posting of bail by
attorneys
Editor's note: The wrong opinion number was used in the last
sentence when E-96-1 was published in the April 1996 Wisconsin Lawyer.
It is corrected here.
Question: Is it a violation of the Rules of Professional Conduct for
an attorney to post bail in the form of a check or cash for someone who
has been arrested?
Opinion
If the funds or assets posted for the bail, bond or surety are not
the attorney's own property, there is no ethical violation or violation
of section 757.34 of the Wisconsin Statutes for the attorney to do so.
An attorney in Wisconsin is prohibited by statute from posting his or
her own funds or assets as bail, bond or surety for another person in
any civil or criminal case. Wis.
Stat. 757.34. * The Wisconsin Supreme Court has held that there are
no exceptions to this prohibition, and it applies to all attorneys
whether or not an attorney-client relationship is involved. Gilbank
v. Stephenson, 30 Wis. 155 (1872); see also Withers v.
Tucker, 28 Wis. 2d 82 (1965). The committee is constrained to
conclude that an attorney who violates the statute engages in misconduct
under SCR 20:8.4(f). Note,
however, that an attorney who holds client funds in his or her trust
account is not ethically prohibited from issuing trust checks for a
client's bail, bond or surety.
An attorney who provides his or her own funds for a client's bail or
surety also may be in violation of SCR
20:1.8(e). In the opinion of the committee, a bail, bond or surety
is not a court cost nor an expense of litigation under the exceptions in
1.8(e). The committee reaffirms the conclusion reached in E-75-0.
* Statute requires downloading Adobe Acrobat Reader.
E-97-1: Limitation of representation in
residential real estate transactions
Facts
It is common for title companies to offer closing services to
residential real estate customers, and to advise sellers that the title
company will obtain a deed and transfer return from a lawyer to assist
the seller and the buyer in completing the necessary transaction. The
title company supplies a lawyer with the specific information necessary
to complete the deed and transfer return. The lawyer prepares the
documents based solely upon information received from the title company
and delivers the documents to the title company before the closing. The
lawyer does not have direct contact with the seller or buyer and does
not do a conflict check on either seller or buyer. The lawyer sends a
statement for legal services rendered to the title company. And the
lawyer's fee is deducted from the proceeds received by the seller from
the buyer. The title company then issues a check to the lawyer for
payment of the fee.
Question: May a lawyer ethically limit the scope of the lawyer's
representation in a residential real estate transaction to drafting a
deed and transfer return?
Opinion
The Rules of Professional Responsibility for Attorneys support
several models, or approaches, to legal representation in residential
real estate transactions. Among the parties that might be represented
either individually or collectively in a residential real estate
transaction are the seller, the buyer, the lender, and the title
company. In some situations, a lawyer might represent one party to the
transaction, and in other situations multiple representation might be
appropriate. Although many residential real estate transactions are
straightforward and routine, some are not. Furthermore, unanticipated
problems can develop in apparently routine transactions. Consequently,
the model of representation appropriate to a specific transaction will
vary with the complexity of the transaction and the extent to which the
needs, interests and expectations of the parties to the transaction
vary.
Single client model. A lawyer representing only one party in a
residential real estate transaction should be aware of the danger that
the other parties might assume incorrectly that the lawyer is either
acting on their behalf or is disinterested. Consequently, the lawyer
should be careful not to state or imply either that the lawyer is acting
on behalf of a party who is not a client or that the lawyer is
disinterested. See SCR 20:4.3 and
comment. Furthermore, SCR 20:4.3 requires that a lawyer who knows or
reasonably should know that an unrepresented party misunderstands the
lawyer's role in the matter make reasonable efforts to correct the
misunderstanding. To avoid possible misunderstanding, the lawyer should
be proactive and communicate with all parties about the nature of the
representation that is being provided.
If the lawyer is representing a party other than the title company,
the lawyer must ensure that the lawyer's relationship with the title
company does not interfere with the duties owed by the lawyer to the
client, whether the client is the seller, the buyer or the lender. SCR 20:5.4(c). Similarly, if the
lawyer is representing a party other than the seller, the lawyer must
ensure that the fact that the seller is paying the lawyer's fee does not
interfere with the lawyer's professional judgment or with the
client-lawyer relationship and that the client consents after
consultation. SCR 20:1.8(f).
Multiple client model. Under SCR
20:2.2 a lawyer may act as an intermediary and represent more than
one party to a residential real estate transaction if:
1) The lawyer consults with each client concerning the implications
of the common representation, including the advantages and risks
involved and the effect on the attorney-client privileges and obtains
each client's consent in writing to the common representation;
2) The lawyer reasonably believes that the matter can be resolved on
terms compatible with the clients' best interests, that each client will
be able to make adequately informed decisions in the matter and that
there is little risk of material prejudice to the interests of any of
the clients if the contemplated resolution is unsuccessful; and
3) The lawyer reasonably believes that the common representation can
be undertaken impartially and without improper effect on other
responsibilities the lawyer has to any of the clients.
In residential real estate transactions of the type described above,
the lawyer normally would accomplish the consultation by some form of
letter that fully describes the implications of the common
representation. Under some circumstances, however, personal consultation
with clients may be necessary to fully apprise them of the implications
of the common representation.
Limiting representation. Under SCR
20:1.2(c) a lawyer may limit the scope of representation, after
consulting with the client, to preparing the deed and transfer return.
When the scope of representation is so limited, it is the lawyer's
responsibility to ensure that the client understands and accepts the
limited nature of the representation. This obligation exists whether the
lawyer is representing a single client or multiple clients. In
residential real estate transactions of the type described above, a
lawyer normally would accomplish this purpose by a letter that fully
describes the limited role that the lawyer will serve in the
transaction. Under some circumstances, however, more specific or
personal consultation with the client or clients may be necessary to
fully apprise them of the limited nature of the representation.
Assisting in the unauthorized practice of law. Under SCR 20:5.5 a lawyer cannot assist a
nonlawyer in the unauthorized practice of law. The committee is of the
opinion that an attorney who limits the scope of representation in real
estate transactions to drafting deeds and transfer returns does not
solely by that limitation assist a title company in the unauthorized
practice of law. Such a conclusion would depend upon the specific
activities of the title company both before and during the closing; a
legal determination that the activities of the title company amounted to
the unauthorized practice of law; and a review of the involvement of the
lawyer in the activities of the title company related to and at the
closing.
E-97-2: Obligations of a lawyer and a law
firm when a lawyer terminates association with a law firm
Question: What are the obligations of a lawyer and a law firm (either
a partnership or a corporation) when a lawyer who has been responsible
for client matters decides to leave the firm before completing work on
such matters?
Opinion
It is generally recognized that absent a special agreement, a client
retains a law firm to provide legal services rather than a particular
lawyer in the law firm. ABA Standing Committee on Ethics and
Professional Responsibility Informal Opinion 1428 (Feb. 1, 1979).
Therefore, subject to the contrary wishes of the client, a law firm is
obligated to continue to handle matters that were handled by a departing
lawyer. If the law firm is unable or unwilling to continue to handle the
matters that were the responsibility of the department lawyer, the law
firm must assist the client to obtain other legal representation.
ABA Committee Informal Opinion 1428
If the client decides not to continue representation by the law firm,
the law firm is required by SCR
20:1.16(d) to take reasonable steps to protect the client's
interests, including preserving timelines and filing obligations and
surrendering papers and property to which the client is entitled. See
State Bar Professional Ethics Committee Formal Opinions E-82-7 (Copying
client's files) and E-95-4 (Lawyer self-help in enforcing fee agreement
with clients). If the client decides to retain another lawyer for
continuing representation, there may be an agreement for a division of
fees between that other lawyer and the law firm. SCR 20:1.5(e).
Before departing a law firm, a lawyer has obligations to the clients
for whom the lawyer has been responsible for handling legal matters.
Under SCR 20.1.3 a lawyer must act
with reasonable diligence and promptness in representing a client, and
under SCR 20.1.4 a lawyer is
obligated to keep a client reasonably informed about the status of a
matter. Consequently, a departing lawyer must communicate the fact that
the lawyer is departing the law firm to all clients for whom the lawyer
has been responsible for handling legal matters within a reasonable time
period after deciding to depart the law firm.
The communication, whether written or by personal contact, should be
accomplished in a professional and noninflammatory manner, and should
not be disparaging of either the departing lawyer or the law firm.
Unless the understanding of the original employment contract was that
the client desired to hire the specific attorney rather than the law
firm, the communication should state that the law firm is obligated to
continue to represent the client or to assist the client in securing
counsel if the client desires to discontinue representation with the law
firm, or if the firm is unable or unwilling to continue representation.
The communication should indicate that the client has the right to
decide who will represent the client both in pending and further legal
matters. The communication should not request that the client sever the
relationship with the law firm, but may indicate a willingness on the
part of the departing lawyer to represent the client. After departing
the firm, communications between the lawyer and clients of the lawyer's
former firm that are made for the purpose of obtaining employment must
comply with SCR 20:7.3.
If a departing lawyer joins another law firm, both the lawyer and the
new firm must take note of conflicts of interest that might be created
with clients of the lawyer's former firm because of the lawyer's move
from one firm to another. See SCR
20:1.7; 20:1.9; 20:1.10. For further clarification,
see ABA Formal Opinion 96-400.
The committee notes that its opinion is limited to ethical issues
relating to the departure from a law firm of an attorney who has been
responsible for client matters, and does not purport to address legal
issues relating to such a departure. See generally, The
Lawyer's Manual on Professional Conduct 91:701.
Formal Opinion E-80-18 is hereby withdrawn.
E-97-3: Mediation of divorces
Opinion
An attorney may serve as an intermediary between two current clients,
such as a husband and wife in a divorce action, if the requirements of
SCR 20:2.2 are met. The committee withdraws Formal Opinion E-79-2
(Mediation of divorces) because it is inconsistent with current SCR 20:2.2.
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