When a settlement check in a California personal injury matter is made jointly payable to the client, the former attorney with a charging lien, and successor counsel, may the former attorney refuse to endorse it without violating former Rule 4-100(B)(4), and what must she do with the undisputed portion the client demands?

Currency note

This opinion was issued in 2009, before the State Bar of California's adoption of the November 1, 2018 revisions to the Rules of Professional Conduct. The opinion interprets former Rules 3-700 (termination of employment, including refund of unearned fees in subsection (D)) and 4-100 (client trust accounts, including the prompt-delivery obligation in 4-100(B)(4)), together with Commercial Code section 3110(d) and Civil Code section 2913. Current California Rule 1.15 (safekeeping funds and property) and Rule 1.16 (declining or terminating representation) now address these issues. Treat this page as historical context, not current guidance. Verify against current rules and the cited statutes before relying on any specific procedural step.

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.

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Plain-English summary

The hypothetical: Client retained Attorney A on a personal injury action against a construction company with a 35% contingency-fee retainer including a valid charging lien. After two years, Client discharged Attorney A and retained Attorney B; Attorney A filed a notice of lien. The case settled; the opposing party sent Attorney B a check made out jointly to "Client, Attorney A, and Attorney B." Client demanded that Attorney A endorse. Attorney A, fearing endorsement would forfeit her lien rights, declined to endorse but offered to take prompt and reasonable steps so that the undisputed portion (as determined by the reasonable value of her pre-discharge services) could be released to Client immediately. Client refused to agree to Attorney A's proposed steps. Attorney A then initiated an independent action to determine the fees to which she is entitled and gave Client timely notice of his right to arbitration.

The committee's analysis proceeds in two parts.

Part 1 (the prompt-delivery rule): Former Rule 4-100(B)(4) requires an attorney to "[p]romptly pay or deliver, as requested by the client, any funds, securities, or other properties in the possession of the member which the client is entitled to receive." Where no lien rights or third-party rights exist, the attorney must promptly deliver all proceeds (citing In the Matter of Kaplan). Where the attorney asserts lien rights against less than all of the proceeds, the attorney must promptly take reasonable steps to pay the client the undisputed portion (citing In the Matter of Feldsott and Fletcher v. Davis).

Endorsing a jointly payable settlement check forfeits the charging lien under Civil Code section 2913: "The voluntary restoration of property to its owner by the holder of a lien thereon dependent upon possession extinguishes the lien as to such property . . . ." Under Commercial Code section 3110(d), instruments payable to two or more persons not alternatively may be negotiated only by all of them. Because Rule 4-100(B)(4) requires prompt delivery of funds "which the client is entitled to receive" (emphasis in the opinion), the committee holds that the attorney need not endorse the check, since it includes amounts owed to the attorney to which the client is not entitled. The opinion quotes Carroll v. Interstate Brands Corp.: settlement proceeds "will thus be tied up until everyone involved can agree on how the money should be divided . . . or until one or the other brings an independent action for declaratory relief."

The attorney must "fulfill his or her duty to promptly find other reasonable methods of delivering the undisputed portion to the client." Under In the Matter of Kroff, the attorney violates Rule 4-100(B)(4) if she does not "promptly take appropriate, substantive steps to resolve the dispute in order to disburse the funds." The attorney has an affirmative obligation to seek arbitration or judicial determination without delay (citing LACBA Formal Opinion 438). Reasonable approaches recognized in Feldsott include placing disputed funds in the attorney's trust account or in a separate blocked account requiring signatures from the attorney and the client. The committee adds, citing Virtanen v. O'Connell and California State Bar Formal Opinion 2008-175, that placing settlement proceeds in successor counsel's account under an express agreement to hold the disputed portion in trust for former counsel pending resolution of the lien dispute is also reasonable; successor counsel then assumes a fiduciary obligation to the former attorney and cannot convert the property to the client's use. (The committee notes In the Matter of Respondent H rejecting fiduciary-duty arguments where no evidence supports the existence of a proper prior-attorney lien.)

Part 2 (the amount-determination duty): The former attorney "continue[s] to owe [the client] a fiduciary duty of utmost good faith and fair dealing with respect to, at least, the subject matter of [the attorney's] prior representation," including the express lien (Feldsott; Restatement Third, Law Governing Lawyers § 33). The attorney may decline to deliver only the portion of the proceeds to which she is reasonably entitled under a valid charging lien.

The fees to which an attorney is entitled after withdrawal or discharge turn on several factors, including: whether the attorney fully or partially performed (Fracasse v. Brent), whether the attorney was discharged or withdrew and whether withdrawal was justifiable (Hensel v. Cohen), and the reasonable value of services considering the hourly or contingent nature of the agreement (Cazares v. Saenz), plus contractual pre-judgment interest (Civil Code section 3287; Fitzsimmons v. Jackson).

Procedures for establishing the amount and enforcing the lien vary: an independent action against the client is often required (Valenta, Hansen v. Jacobsen, Bandy); in some action types, the court hearing the underlying matter has jurisdiction to determine validity and amount (Padilla, Curtis v. Fagan); mandatory fee arbitration may be pursued under Business and Professions Code section 6200 et seq. (with the Hansen observation that the discharged attorney is not required to comply with mandatory fee arbitration procedures until the independent action is commenced); or the retainer may provide for alternative arbitration (Schatz, Aguilar v. Lerner).

The attorney has a duty to consult governing legal authorities and make a reasonable determination of the amount she is entitled to. If the client disagrees, the attorney must promptly seek resolution through arbitration or judicial determination.

Applied to the hypothetical: Attorney A did not violate Rule 4-100(B)(4) because her charging lien was valid, she reasonably believed she was entitled to a portion of the proceeds, she suggested reasonable alternatives so Client could promptly receive the undisputed portion, and she initiated proceedings to resolve the issue while giving Client timely notice of his arbitration right.

Common questions

Q: Does the former attorney violate former Rule 4-100(B)(4) by refusing to endorse a jointly payable settlement check to preserve her charging lien?

A: Per the opinion, no. Endorsing the check would extinguish the lien under Civil Code section 2913 (per Feldsott). Rule 4-100(B)(4) requires prompt delivery only of funds "which the client is entitled to receive," and the jointly payable check includes amounts to which the client is not entitled because they are owed to the attorney.

Q: What must the former attorney do with the portion of the proceeds the client is undisputedly entitled to?

A: Per the opinion, the attorney must promptly find reasonable methods of delivering the undisputed portion. Recognized methods include placing the disputed portion in the attorney's trust account or in a separate blocked account requiring signatures from attorney and client. Placing proceeds in successor counsel's account under an express trust agreement is also reasonable, with successor counsel assuming a fiduciary obligation to the former attorney.

Q: What happens if the client refuses every reasonable arrangement the former attorney proposes?

A: Per the opinion, the attorney has an affirmative obligation to promptly seek arbitration or judicial determination of the lien dispute without delay (citing Kroff and LACBA Formal Opinion 438). The attorney may not simply sit back and wait for resolution.

Q: How does the former attorney determine the amount to which she is entitled?

A: Per the opinion, she has a duty to consult governing legal authorities and make a reasonable determination based on the circumstances. Relevant factors include whether the attorney fully or partially performed (Fracasse v. Brent), whether the attorney was discharged or withdrew and whether withdrawal was justified (Hensel v. Cohen), the reasonable value of services in light of the fee arrangement (Cazares v. Saenz), and any contractual pre-judgment interest under Civil Code section 3287.

Q: What procedure is used to determine and enforce the lien?

A: Per the opinion, it depends on the circumstances. Many lien disputes require an independent action by the attorney (Valenta, Hansen v. Jacobsen, Bandy). In certain action types, the court hearing the underlying matter has jurisdiction to determine validity and amount (Padilla, Curtis v. Fagan). Mandatory fee arbitration under Business and Professions Code section 6200 et seq. may be pursued, though Hansen observes the discharged attorney need not comply with mandatory fee arbitration procedures until the independent action is commenced. The retainer agreement may provide for alternative arbitration (Schatz, Aguilar v. Lerner).

Q: What did Attorney A do that the committee found acceptable?

A: Per the opinion, Attorney A's charging lien was valid, she reasonably believed she was entitled to a portion of the proceeds, she suggested reasonable alternatives to release the undisputed funds to Client, and she initiated proceedings to resolve the dispute promptly while providing timely and proper notice of Client's right to arbitration. She also made a reasonable determination of the amount she would be entitled to receive so the undisputed amount could be delivered.

Background and rules framework

The opinion interprets former California Rules 3-700 (termination of employment, including the obligation to refund unearned fees in subsection (D)) and 4-100 (client trust accounts, including the prompt-delivery obligation in 4-100(B)(4)), together with California Commercial Code section 3110(d) (requiring all joint payees to negotiate the instrument) and California Civil Code section 2913 (voluntary restoration of property extinguishes a possessory lien). Functionally, current California Rule 1.15 (safekeeping funds) and Rule 1.16 (declining or terminating representation) now address the underlying duties.

Citations and references

Rules of Professional Conduct (former, in effect at time of opinion):

• Former California Rule 3-700 (termination of employment)
• Former California Rule 4-100, including 4-100(B)(4) (client trust accounts; prompt payment)

Statutes:

• California Commercial Code section 3110(d) (joint payees)
• California Civil Code section 2913 (voluntary restoration extinguishes possessory lien)
• California Civil Code section 3287 (pre-judgment interest)
• California Business and Professions Code section 6200 et seq. (mandatory fee arbitration)

Cases:

• Fletcher v. Davis (2004) 33 Cal.4th 61, attorney may withhold disputed portion from client trust account
• In the Matter of Kaplan (Rev. Dept. 1993) 2 Cal. State Bar Ct. Rptr. 509, attorney without lien must promptly endorse client's settlement draft
• In the Matter of Feldsott (Rev. Dept. 1997) 3 Cal. State Bar Ct. Rptr. 754, attorney with charging lien did not violate Rule 4-100 by offering reasonable alternatives
• In the Matter of Kroff (Rev. Dept. 1998) 3 Cal. State Bar Ct. Rptr. 838, attorney violates Rule 4-100(B)(4) by failing to take substantive steps to resolve dispute
• In the Matter of Respondent H (Rev. Dept. 1992) 2 Cal. State Bar Ct. Rptr. 234, no fiduciary duty absent evidence of proper prior-attorney lien
• Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, settlement proceeds tied up until division resolved
• Virtanen v. O'Connell (2006) 140 Cal.App.4th 688, fiduciary duties when holding funds for third parties
• Fracasse v. Brent (1972) 6 Cal.3d 784, quantum meruit for discharged attorney
• Hensel v. Cohen (1984) 155 Cal.App.3d 563, factors in lien dispute determination
• Cazares v. Saenz (1989) 208 Cal.App.3d 279, reasonable value of services
• Fitzsimmons v. Jackson (Bankr. 9th Cir. 1985) 51 B.R. 600, contractual pre-judgment interest
• Valenta v. Regents of the Univ. of Cal. (1991) 231 Cal.App.3d 1465, independent action required for contractual lien enforcement
• Hansen v. Jacobsen (1986) 186 Cal.App.3d 350, independent action and mandatory fee arbitration sequencing
• Bandy v. Mount Diablo Unified School Dist. (1976) 56 Cal.App.3d 230, independent action
• Padilla v. McClellan (2001) 93 Cal.App.4th 1100, court's jurisdiction to determine lien
• Curtis v. Fagan (2000) 82 Cal.App.4th 270, same
• Schatz v. Allen Matkins Leck Gamble & Mallory LLP (2009) 45 Cal.4th 557, alternative arbitration in retainer
• Aguilar v. Lerner (2004) 32 Cal.4th 974, same

Other opinions and authorities cited:

• California State Bar Formal Opinion 2008-175 (fiduciary duty to lienholder; held in trust)
• Los Angeles County Bar Association Formal Opinion 438 (affirmative obligation to seek arbitration or judicial determination)
• Restatement (Third) of the Law Governing Lawyers § 33
• Vapnek et al., California Practice Guide: Professional Responsibility (The Rutter Group 2006)

See also

• CA COPRAC Op. 2008-175: Successor counsel, prior lien, and client concealment instruction
• CA COPRAC Op. 2006-170: Charging lien in contingency fee agreement
• CA COPRAC Op. 2006-171: Fee dispute after trust account withdrawal
• CA COPRAC Op. 2005-169: Client trust account overdraft protection

Source

• Landing page: https://www.calbar.ca.gov/legal-professionals/ethics-compliance-practice-resources/ethics/ethics-opinions
• Original PDF: https://www.calbar.ca.gov/sites/default/files/portals/0/documents/ethics/Opinions/2009-177.pdf

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. 2009-177

ISSUE: In what manner may an attorney maintain her rights in a charging lien when her former client demands that the attorney endorse a settlement check jointly payable to the client and his current and former attorneys without violating the requirement of rule 4-100 of the California Rules of Professional Conduct that the attorney promptly pay or deliver funds to which the client is entitled?

DIGEST: When responding to a request to endorse a settlement check made jointly payable to a client and his or her current and former attorneys where the former attorney has asserted a valid lien on the settlement proceeds, the former attorney must take prompt steps to find a reasonable method or methods of delivering the undisputed portion of the proceeds to which the client is entitled. The former attorney does not violate rule 4-100 by refusing to use a method that would extinguish the attorney's charging lien, but has a duty to consult governing legal authorities and make a reasonable determination of the amount to which he or she is entitled under the circumstances. If the client does not agree to proposed reasonable methods for delivering the undisputed portion or does not agree with the former attorney's determination of the amount of the proceeds that undisputedly belong to the client, the attorney must promptly seek resolution of the fee dispute through arbitration or judicial determination, as appropriate.

AUTHORITIES INTERPRETED: Rules 3-700 and 4-100 of the Rules of Professional Conduct of the State Bar of California. Commercial Code section 3110(d). Civil Code section 2913.

STATEMENT OF FACTS

Client retained Attorney A to represent Client in a personal injury action against a construction company. The retainer agreement between Attorney A and Client provided for a contingency fee of 35 percent of any recovery obtained by Client through judgment, settlement or other recovery and specifically included a legally valid charging lien in favor of Attorney A upon the proceeds of Client's prospective recovery. Upon receiving the signed retainer agreement, Attorney A commenced work on the matter. After two years of active litigation, Client discharged Attorney A and retained Attorney B. Attorney A filed a notice of lien in the litigation. The litigation was resolved several months later by settlement when the opposing party sent Attorney B a check made out to "Client, Attorney A, and Attorney B." Client demanded that Attorney A endorse the check. Fearing that endorsing the check in that manner would forfeit certain legal rights she had pursuant to the lien, Attorney A declined to endorse the check under those conditions, but did offer to take prompt and reasonable steps so that the portion of the settlement check that undisputedly belonged to Client, as determined in accordance with applicable governing authorities concerning the reasonable value of the services Attorney A had rendered at the time of discharge, could be immediately released to Client. Client refused to agree to the steps Attorney A proposed. Consequently, Attorney A initiated an independent action to determine the amount of fees to which she is entitled and provided timely and proper notice to Client of his right to arbitration.

DISCUSSION

1. Rule 4-100 of the California Rules of Professional Conduct Obligates an Attorney To Promptly Pay or Deliver Any Funds or Property the Client Is Entitled To Receive.

The dilemma faced by Attorney A is created when the settlement check is jointly made payable to Client, Attorney A and Attorney B. Attorney A does not want to endorse the check if it will forfeit her lien, but, alternatively, does not want to take any action that improperly delays Client's receipt of the settlement proceeds to which Client is entitled.

Rule 4-100(B)(4) provides that an attorney shall "[p]romptly pay or deliver, as requested by the client, any funds, securities, or other properties in the possession of the member which the client is entitled to receive." Thus, where an attorney has asserted no lien rights over the settlement proceeds and no valid rights to any portion of such proceeds exist in favor of any third parties, the attorney must promptly pay or deliver all the settlement proceeds to the client. (In the Matter of Kaplan (Rev. Dept. 1993) 2 Cal. State Bar Ct. Rptr. 509.) Where the attorney is asserting lien rights against less than all of the settlement proceeds, the attorney nonetheless has a duty to promptly take reasonable steps to pay or deliver to the client the portion of the proceeds that are not in dispute. (Rule 4-100(B)(4); In the Matter of Feldsott (Rev. Dept. 1997) 3 Cal. State Bar Ct. Rptr. 754; Fletcher v. Davis (2004) 33 Cal.4th 61, 69 [14 Cal.Rptr.3d 58].)

Under current California law, if Attorney A were to endorse the settlement check as Client has requested, Attorney A would forfeit her legal rights under the charging lien. (Feldsott, supra, 3 Cal. State Bar Ct. Rptr. at pp. 757-758, citing Civ. Code, § 2913.) Section 2913 of the California Civil Code provides that "[t]he voluntary restoration of property to its owner by the holder of a lien thereon dependent upon possession extinguishes the lien as to such property, unless otherwise agreed by the parties, and extinguishes it, notwithstanding any such agreement, as to creditors of the owner and persons, subsequently acquiring a title to the property, or a lien thereon, in good faith, and for value." In circumstances like those presented by the fact pattern considered herein, namely, when the settlement check is made payable jointly to the Client, Attorney A (the former attorney) and Attorney B (the successor attorney), the former attorney may refuse to endorse the check in order to preserve the charging lien until a resolution is reached. (Fletcher v. Davis, supra, 33 Cal.4th at p. 69; Feldsott, supra, 3 Cal. State Bar Ct. Rptr. at p. 758.) Because rule 4-100 requires prompt payment or delivery of only those funds "which the client is entitled to receive" (emphasis added), the Committee is of the opinion that the attorney need not endorse the check because the check includes certain funds that in some part are owed to the attorney and to which the client is not entitled. "The unfortunate effect . . . is that '[t]he settlement proceeds will thus be tied up until everyone involved can agree on how the money should be divided . . . or until one or the other brings an independent action for declaratory relief.'" (Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1176 [121 Cal.Rptr.2d 532], internal citation omitted.)

As a result, the attorney must fulfill his or her duty to promptly find other reasonable methods of delivering the undisputed portion to the client. Indeed, where the client requests that the attorney disburse the funds to the client and the attorney claims an interest in such funds, "the attorney violates rule 4-100(B)(4) if he or she does not promptly take appropriate, substantive steps to resolve the dispute in order to disburse the funds." (In the Matter of Kroff (Rev. Dept. 1998) 3 Cal. State Bar Ct. Rptr. 838.) Attorney A may not simply sit back and wait for such a resolution. Where the attorney and client cannot reach agreement on disbursement of the funds, and the client has requested payment or delivery of those funds, the attorney has an affirmative obligation to seek arbitration or a judicial determination without delay in order to comply with rule 4-100(B)(4). (L.A. County Bar Assn. Formal Opn. No. 438.)

Rule 4-100 does not suggest how an attorney may comply with the rule when there is a lien dispute as to a portion of the proceeds from the underlying matter. In Feldsott, supra, the attorney who was asserting his lien acted reasonably in offering to place the disputed funds in his trust account or in a separate blocked account requiring signatures from the attorney and the client, among other reasonable alternatives, and both of those alternatives were held not to be in violation of the rule. (3 Cal. State Bar Ct. Rptr. at p. 757.) Alternatively, in Kroff, supra, the attorney participated in a fee arbitration requested by the clients and promptly abided by the arbitration award. The Review Department of the State Bar Court also determined that such conduct did not violate rule 4-100(B)(4). (3 Cal. State Bar Ct. Rptr. at p. 854.)

The Committee is of the opinion that agreeing to place the settlement proceeds in the successor counsel's account, pursuant to an express agreement to hold the disputed portion of the funds in trust for former counsel pending resolution of the lien dispute, also would be reasonable where the successor counsel has notice of a valid lien in favor of the former attorney and the dispute over the amount to which the former attorney is entitled. The successor counsel assumes a fiduciary obligation to the former attorney when agreeing to hold such funds, and cannot favor his or her client by converting the property to the client's use pending resolution of the competing claims to the funds. (See: Virtanen v. O'Connell (2006) 140 Cal.App.4th 688, 693, 702-703 [44 Cal.Rptr.3d 702]; Cal. State Bar Formal Opn. No. 2008-175; but see In the Matter of Respondent H (Rev. Dept. 1992) 2 Cal. State Bar Ct. Rptr. 234.)

2. An Attorney May Decline To Promptly Pay or Deliver Only That Portion of the Settlement Proceeds to Which the Attorney Is Reasonably Entitled under a Valid Charging Lien.

The Review Department of the State Bar Court determined in Feldsott, supra, that, in a situation such as the one between Attorney A and Client, the former attorney "continue[s] to owe [the client] a fiduciary duty of utmost good faith and fair dealing with respect to, at least, the subject matter of [the attorney's] prior representation of [the client], including [the attorney's] express lien for his attorney's fees." (3 Cal. State Bar Ct. Rptr. at p. 757; see also Rest.3d, Law Governing Lawyers § 33.)

Consequently, Attorney A must make a reasonable determination of the amount of fees to which she is entitled under the lien and promptly offer reasonable suggestions for the disbursement or release of any and all remaining funds belonging to Client. An attorney's duty under rule 4-100(B)(4) to pay or deliver any funds which the former client is entitled to receive is not extinguished by the termination of the attorney-client relationship.

A single rule does not exist to determine in all cases the fees to which an attorney is entitled, if any, after withdrawing or being discharged from a matter. (See Vapnek, et al., "California Practice Guide: Professional Responsibility" (TRG 2006), section 5:1030, et seq.) The amount of the funds in dispute in such situations may turn on several factors, including: whether the attorney fully or partially performed the agreement with the client (see, e.g., Fracasse v. Brent (1972) 6 Cal.3d 784, 790-791 [100 Cal.Rptr. 385]); whether the attorney was discharged or withdrew, whether withdrawal was justifiable or not (see, e.g., Hensel v. Cohen (1984) 155 Cal.App.3d 563, 568-569 [202 Cal.Rptr. 85]); and other factors, such as the reasonable value of the services, taking into account the hourly or contingent nature of the fee agreement (see, e.g., Cazares v. Saenz (1989) 208 Cal.App.3d 279, 287 [256 Cal.Rptr. 209]), and the availability of contractual pre-judgment interest (Civ. Code, § 3287; see, e.g., Fitzsimmons v. Jackson (Bankr. 9th Cir. 1985) 51 B.R. 600, 612-613).

In addition, the legal procedures for establishing the amount the attorney is entitled to receive and for enforcing the lien vary depending on the circumstances. In many instances where a contractual lien for attorneys' fees is contested, an independent action by the attorney against the client must be used to establish the amount of the lien and to enforce it. (See, e.g., Valenta v. Regents of the Univ. of Cal. (1991) 231 Cal.App.3d 1465, 1470 [282 Cal.Rptr. 812]; Hansen v. Jacobsen (1986) 186 Cal.App.3d 350, 356 [230 Cal.Rptr. 580]; Bandy v. Mount Diablo Unified School Dist. (1976) 56 Cal.App.3d 230, 234-235 [126 Cal.Rptr. 890].) In certain types of actions, the court hearing the underlying matter has jurisdiction to determine the validity of the claim and a reasonable amount to be paid to the attorneys. (See, e.g., Padilla v. McClellan (2001) 93 Cal.App.4th 1100, 1104-1106 [113 Cal.Rptr.2d 680]; Curtis v. Fagan (2000) 82 Cal.App.4th 270, 278-280 [98 Cal.Rptr.2d 84].) In some circumstances, mandatory fee arbitration may be pursued (Bus. & Prof. Code, § 6200 et seq.; State Bar Rules of Proc. for Fee Arbitrations, Rules 1.0 et seq.; see Hansen, supra, 186 Cal.App.3d at p. 356, fn. 5), or the retainer agreement with the client may provide for an alternative form of arbitration (see: Schatz v. Allen Matkins Leck Gamble & Mallory LLP (2009) 45 Cal.4th 557, 571-575 [87 Cal.Rptr. 3d 700, 710-714]; Aguilar v. Lerner (2004) 32 Cal.4th 974, 987-990 [12 Cal.Rptr.3d 287]).

In light of the different considerations applicable in any individual case, the attorney has a duty to consult governing legal authorities and make a reasonable determination of the amount to which he or she is entitled under the circumstances. If the client does not agree with that determination, the attorney should seek prompt resolution through arbitration or judicial determination, as appropriate.

Here, it is the Committee's opinion that Attorney A did not violate rule 4-100(B)(4) by refusing to endorse the check because her charging lien was valid and she reasonably believed she was entitled to a portion of the proceeds, she suggested reasonable alternatives to enable Client to promptly receive those funds to which he was undisputedly entitled, and she initiated proceedings to promptly resolve the issue while providing timely and proper notice to Client of his right to arbitration. While attempting to informally resolve the matter with Client, Attorney A also made a reasonable determination concerning the amount of funds she would be entitled to receive under the circumstances so that the undisputed amount could be delivered to Client.

CONCLUSION

When a former attorney has valid lien rights in settlement proceeds, that attorney will not violate rule 4-100 by taking prompt and reasonable action to resolve a dispute with his or her former client over the amount which the attorney is entitled to receive, and any undisputed amount to which the client is entitled is promptly disbursed through a method upon which the attorney and client agree. In light of the different considerations applicable in any individual case, the attorney has a duty to consult governing legal authorities and make a reasonable determination of the amount to which he or she is entitled under the circumstances. If no agreement can be reached with the former client on these issues, the attorney has an affirmative obligation to promptly seek resolution of the dispute through arbitration or judicial determination, as appropriate. However, the attorney is not required to endorse a settlement check that is jointly payable to him or her, the client and successor counsel pending resolution of the dispute, because doing so would extinguish the attorney's charging lien under current California law.

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.