Is it unethical for a lawyer to claim a retaining lien on a client's property to secure unpaid fees?

Plain-English summary

A lawyer and his associate represented a nonresident client in minority-stockholder claims involving Florida corporations and obtained leave to withdraw after disagreements arose. The client had delivered his stock certificates to the lawyers for use as evidence. After withdrawal, the lawyers could not collect their fees, sued, and obtained a judgment for $2,163.90. The client appeared to have no Florida assets except the stock the lawyers held. The lawyers asked whether they could deliver the stock to the sheriff for levy under an execution on their judgment.

The committee quoted Section 11.02(4) of the Integration Rule, which provides that client money and property held by an attorney are not subject to counterclaim or setoff for fees, but that the rule does not preclude retaining money or property on which the lawyer has a valid lien for services. The committee concluded that the provision was controlling but that its application to these facts was fundamentally a question of law beyond the committee's province.

The committee offered the observation that it is not unethical for a lawyer in good faith to claim the rights the law grants through an attorney's retaining lien, a lien traditionally considered passive and not susceptible of active enforcement, whose existence and extent would be determined by judicial proceedings. It suggested that the attorney, with appropriate notice to his client, institute proceedings to clarify his rights.

Currency note

This opinion was issued in 1968, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Canon 11 and Section 11.02(4) of the Integration Rule on handling client property. Safekeeping of client property is now addressed by Rules 4-1.15 and 5-1.1. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer hold a client's property to secure an unpaid fee?

A: Under this opinion, claiming an attorney's retaining lien in good faith is not unethical. The committee said whether the lien actually attaches to the particular property, and its extent, are questions of law for the courts, not the ethics committee.

Q: Could the committee decide whether the lien reached the client's stock?

A: No. The committee said the interpretation of Section 11.02(4) as applied to the facts was a question of law beyond its province and suggested the lawyer institute judicial proceedings, with notice to the client, to clarify his rights.

Background and rules framework

The opinion applied the former Canon 11 and Section 11.02(4) of the Integration Rule, which barred using client funds and property as setoff for fees while preserving a lawyer's valid lien for services. Safekeeping of client property is now addressed by Rules 4-1.15 and 5-1.1 of the Rules Regulating The Florida Bar; the Model Rule analogue is Rule 1.15.

Citations and references

Rules of Professional Conduct:

• Canon 11 [Canons of Professional Ethics; client-property duties now in Rules 4-1.15, 5-1.1]

Statutes:

• Section 678.8-317, Florida Statutes (levy on stock under execution requires physical possession)
• Integration Rule Section 11.02(4) (trust funds and fees)

See also

• FL Bar Ethics Op. 68-37: Retaining Liens and Trust Funds
• FL Bar Ethics Op. 70-17: Retaining Lien on Client Funds

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-68-21/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-68-21-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 68-21
June 7, 1968
Advisory ethics opinions are not binding.
It is not unethical for an attorney to claim an attorney's retaining lien in good faith. The existence and extent of this retaining lien are questions of law.
Canon: 11
Integration Rule: §11.02(4)
Chairman MacDonald stated the opinion of the committee:
A member of The Florida Bar advises as follows:
My associate and I represented __, who is and was a nonresident of the state, in connection with his claims as a minority stockholder in Florida corporations. As a result of disagreements which arose, we obtained leave from the Court to withdraw as his attorneys. In the course of our representation, the client delivered to us his shares of stock in the corporations for the purpose of using same for evidence in connection with the litigation. After our withdrawal as his attorneys, we were unable to obtain payment of our fees for the services rendered and filed suit against him and recovered a judgment against him in the Circuit Court of ______ County for the sum of $2,163.90. So far as we know, he has no assets in the state other than the stock, which we are holding, and we are not certain whether the judgment can be enforced in the state of his residence although there is a possibility that we might be able to collect if suit were filed there and judgment was obtained and proceedings taken to collect same.
The question presented is whether we may properly deliver the shares of stock to the sheriff for the purpose of levy upon an execution to be issued on the judgment we obtained. Under the provisions of Section 678.8–317 Fla.Stats., a levy on stock under an execution may not be made unless the officer obtained physical possession of the stock under the writ.
Section 11.02(4) of the Integration Rule provides as follows:
(4) Trust funds and fees. Money or other property entrusted to an attorney for a specific purpose is held in trust and must be applied only to that purpose. Money and other property of clients coming into the hands of an attorney are not subject to counterclaim or setoff for attorney fees, and a refusal to account for and deliver over such property and money upon demand shall be deemed a conversion. This is not to preclude the retention of money or other property upon which the lawyer has a valid lien for his services or to preclude the payment of agreed fees from the proceeds of transactions or collections.
In our judgment the foregoing portion of the Integration Rule is controlling, but its interpretation with regard to the facts presents fundamentally a question of law beyond the province of this Committee, with the exception of our right to offer the obvious observations that it is not unethical for a lawyer in good faith to claim those rights which the law grants to him through an attorney's retaining lien. The existence and extent of that lien, which is traditionally considered passive and not susceptible of active enforcement, necessarily would be determined by judicial proceedings. It is our suggestion that the attorney, with appropriate notice to his client, institute proceedings to clarify his rights in the matter.