Ethics Committee Formal Opinion 1994-95/7

Conflicts of Interest: Obtaining Security for Payment of Attorney’s Fees

February 16, 1995


It is generally permissible for an attorney to acquire a security interest on assets of a client so long as the strict mandates of NHRPC 1. 8(a) are followed.

The burden of showing adherence to NHRPC 1.8(a) – including the fairness and reasonableness of the transaction, the proper disclosure of the terms and conditions of the transaction, the opportunity to retain independent counsel, and written consent following full disclosure – shall rest with the attorney.

The evidence does not demonstrate that the terms and conditions of the transaction have been explained to the client offering a security interest, nor does it appear that the client was afforded an opportunity to obtain independent counsel or execute a written consent.

The inquiring attorney should be wary of ethical obligations in the representation of multiple clients such as a corporation and its shareholders.


May an attorney who is owed money for legal fees or who anticipates being owed money for attorney’s fees obtain collateral, such as the granting of a mortgage, to secure payment of such fees, and if so, under what circumstances?

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