Can a lawyer require a new client to agree, as a condition of being hired, to arbitrate any future legal malpractice claims against the lawyer?

Currency note

This opinion was issued in 1977, before the State Bar of California's adoption of the November 1, 2018 revisions to the Rules of Professional Conduct. The opinion interprets former California Rule 6-102 and Canon 9, in an area now addressed by Model Rule 1.8(h) (agreements concerning a lawyer's liability to a client) and California Rule 1.8.8. The committee later disapproved this opinion, to the extent inconsistent, in its Opinion No. 1981-56 (binding fee-arbitration clauses), noting that 1977-47 predated former Rule 6-102. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the State Bar of California's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.

About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.

View original opinion

Plain-English summary

The committee considered whether a lawyer may condition employment on a potential client's agreeing to arbitrate any future malpractice claims against the lawyer. It concluded the condition is unethical unless the lawyer is satisfied the client is fully advised of the possible consequences of the arbitration agreement.

The committee recognized that arbitration agreements are generally in the public interest because they can resolve disputes promptly and conserve judicial resources, but reasoned that an arbitration agreement between lawyer and client is not necessarily in the client's best interest; a lawyer may seek it out of self-interest, such as concern about a large jury verdict (referencing former Rule 6-102). The negotiation therefore involves a potential conflict of interest. The committee rejected the argument that conflict rules apply only after the lawyer-client relationship is formed, citing Canon 9 (avoiding even the appearance of impropriety) and Evidence Code section 951, which defines "client" to include a person consulting a lawyer for the purpose of retaining him.

The committee said there is nothing inherently improper about a lawyer-client arbitration agreement covering malpractice, and a lawyer may properly enter one if the client is fully advised of the possible consequences. Because of the potential conflict and appearance of impropriety, the client should be advised that he may seek separate, independent counsel about the agreement. Absent that opportunity and a full explanation, the lawyer should not condition employment on the agreement, and should not even request it unless prepared to give that opportunity and explanation. The committee noted the public interest in arbitration can also be served by the lawyer offering to arbitrate after a malpractice claim has been made, when the consequences may be clearer to the client.

Common questions

Q: Can a lawyer make malpractice arbitration a condition of taking a client's case?

A: Only if the lawyer is satisfied the client is fully advised of the possible consequences and is told he may seek separate independent counsel about the agreement. Without that, the committee concluded the condition is unethical.

Q: Are lawyer-client malpractice arbitration agreements improper in themselves?

A: No. The committee said there is nothing inherently improper about such an agreement, and a lawyer may properly enter one where the client is fully advised of the possible consequences.

Q: Is there a less problematic time to propose arbitration?

A: The committee suggested the lawyer can offer to arbitrate after a malpractice claim has been made, when the possible consequences of arbitration may be clearer to the client.

Background and rules framework

The opinion interprets former California Rule 6-102 (concerning a lawyer attempting to limit liability for malpractice) together with ABA Canon 9 and California Evidence Code section 951 (defining "client" to include one consulting a lawyer to retain him). These concerns are now addressed by Model Rule 1.8(h) and California Rule 1.8.8 on agreements relating to a lawyer's liability to a client.

Citations and references

Rules of Professional Conduct:

• Former California Rule 6-102
• ABA Code of Professional Responsibility, Canon 9
• Current analogs: Model Rule 1.8(h) / California Rule 1.8.8

Statutes:

• California Evidence Code section 951 (definition of "client")

See also

• CA Ethics Op. 1976-38: Advancing Litigation Costs the Client May Not Repay

Source

• Landing page: https://www.calbar.ca.gov/legal-professionals/ethics-compliance-practice-resources/ethics/ethics-opinions
• Original opinion: https://www.calbar.org/ethics/Opinions/1977-47.htm

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

THE STATE BAR OF CALIFORNIA
STANDING COMMITTEE ON PROFESSIONAL RESPONSIBILITY AND CONDUCT
FORMAL OPINION NO. 1977-47

ISSUE:

Ethical considerations involved in malpractice arbitration agreements between lawyers and clients.

DIGEST:

A lawyer may not ethically condition his employment by a client upon the client's agreeing to arbitrate claims of malpractice against the attorney, except under circumstances where the client is fully advised as to the possible consequences of such an agreement.

AUTHORITIES INTERPRETED:

Rule 6-102 of the Rules of Professional Conduct of the State Bar.

Evidence Code section 951.

DISCUSSION

Is it ethical for a lawyer to condition his employment upon the potential client's agreeing to the arbitration of any future malpractice claims by the client against the lawyer? We conclude that it is unethical for a lawyer to impose such a condition unless he is satisfied that the client is fully advised as to the possible consequences of the arbitration agreement.

Unquestionably, arbitration agreements are in the public interest. They can lead to the prompt, efficient resolution of disputes and the conservation of limited judicial resources. But it does not follow from this that an arbitration agreement between a lawyer and his client is necessarily or inevitably in the best interests of the client. A lawyer may be motivated by selfish interests in seeking an arbitration agreement. For instance, the lawyer may desire an arbitration agreement by reason of his concern about the possibility of a large jury verdict against him. (See rule 6-102, Rules Prof. Conduct.)

Accordingly, the negotiation of an arbitration agreement involves a potential conflict of interest between the lawyer and the client. Of course, it can be argued that the conflict of interest rules come into play only after the lawyer-client relationship is established by the employment agreement providing for arbitration. But we regard this as too restrictive a view of the extraordinary ethical obligations of a lawyer. Canon 9 of the American Bar Association Code of Professional Conduct dictates that a lawyer should avoid even the appearance of professional impropriety. Moreover, section 951 of the California Evidence Code defines "client" for purposes of describing the lawyer-client privilege as "a person who, directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from him in a professional capacity."

On the other hand, there is nothing inherently improper about an arbitration agreement between a lawyer and client which extends to malpractice claims. A lawyer may properly enter into such an agreement if the client is fully advised of the possible consequences of that agreement. However, because of the potential conflict of interests and appearance of impropriety, a client should be advised that he may seek separate and independent counsel as to the possible consequences of such an agreement.

Absent giving the client an opportunity to consult with such independent counsel and giving the client full explanation of the possible consequences of arbitration, a lawyer should not condition his employment upon the client's entering into an arbitration agreement. Moreover, the lawyer should not request that the client enter into such an agreement unless the lawyer proposes to give the client such an opportunity and explanation. The public interest considerations favoring arbitration can be furthered by the lawyer's offering to arbitrate after the claim for malpractice has been made, at a time when the possible consequences of the arbitration decision may be clearer to the client.

This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of The State Bar of California. It is advisory only. It is not binding upon the courts, The State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.