Can a lawyer draft a client's trust that directs the trustee to retain that same lawyer as counsel for the trust?

Plain-English summary

A client asked Lawyer A to prepare a trust including a provision directing the trustee to retain A (or, after A's retirement, a lawyer from A's former firm) for the trust's legal work, on the stated rationale that A was most familiar with the client's intentions. The Committee analyzed the provision as a potential own-interest conflict under Rule 1.7(b): even though the client suggested the clause under Rule 1.2(a), A's economic interest in serving as trust counsel could materially limit A's representation, so A could proceed only if A reasonably believed the representation would not be adversely affected and the client consented after disclosure.

The Committee concluded that the provision might not be enforceable. Under the Trusts and Estates Act, a settlor may expand or contract a trustee's powers unless "otherwise contrary to law," and Rule 1.16(a), Illinois public policy, and case law (In re Smith; LaRocco v. Bakwin) give a client an inherent right to discharge a lawyer at any time. The Committee believed the trustee would therefore be permitted to discharge or decline to hire A regardless of the clause.

On disclosure, the Committee applied Rule 1.4(b): A had to inform the client of A's economic interest and that the trustee retained the inherent right to discharge the lawyer, so the clause might not hold. The opinion concluded that documenting the disclosure was the better practice and that, given the risk of an undue-influence or overreaching allegation, A should take extra care to make the disclosure full and understandable. If the client then consented and A held the required reasonable belief, including the provision was permissible. The Committee distinguished its Opinion No. 90-02, which found it improper for a lawyer to insist that a bank the lawyer represented be designated fiduciary.

Currency note

This opinion was issued in 2000, before Illinois adopted its current Rules of Professional Conduct, effective January 1, 2010. The Illinois Rules cited here use the pre-2010 numbering. The ISBA notes the opinion was affirmed by its Board of Governors in January 2010 as generally consistent with the 2010 Rules, though the specific standards referenced may differ. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Is it a conflict for a lawyer to draft a trust that names the lawyer as the trust's counsel?

A: The Committee concluded it implicates Rule 1.7(b) because the lawyer's economic interest in serving as trust counsel may materially limit the representation, so the lawyer needs a reasonable belief that the representation will not be adversely affected plus the client's consent after disclosure.

Q: What does the lawyer have to disclose to the client?

A: The opinion concluded that under Rule 1.4(b) the lawyer must explain the lawyer's economic interest in the provision and that the trustee retains the inherent right to discharge the lawyer, so the clause might not be enforceable; documenting the disclosure is the better practice.

Q: Is the provision directing the trustee to hire the lawyer enforceable?

A: The Committee concluded it might not be, because a client (and the trustee) has an inherent right under Rule 1.16(a) and Illinois public policy to discharge a lawyer at any time, so the trustee could engage other counsel regardless of the clause.

Background and rules framework

The opinion applied Illinois Rule 1.7(b) (conflicts arising from the lawyer's own interest), Rule 1.2(a) (a client's authority to set objectives), Rule 1.4(b) (communication sufficient for informed decisions), and Rule 1.16(a) (discharge of the lawyer), corresponding to ABA Model Rules 1.7, 1.2, 1.4, and 1.16. It read those rules against the Illinois Trusts and Estates Act (760 ILCS 5/1 et seq.) and the public-policy right of a client to discharge counsel.

Citations and references

Rules of Professional Conduct:

• Illinois Rules 1.2(a), 1.4(b), 1.7(b), 1.16(a)(4) (Model Rules 1.2, 1.4, 1.7, 1.16)

Statutes:

• Illinois Trusts and Estates Act, 760 ILCS 5/1 et seq. (760 ILCS 5/3)

Cases:

• In re Smith, 168 Ill.2d 269 (1995), client's right to discharge counsel
• LaRocco v. Bakwin, 108 Ill.App.3d 723 (2d Dist. 1982), discharge right implied by public policy
• Crabtree v. Academy Life Insurance Co., 878 F. Supp. 727 (E.D. Pa. 1995)
• Olsen and Brown v. City of Englewood, 889 P.2d 673 (Colo. 1995)

Other opinions cited:

• ISBA Advisory Opinion No. 90-02

See also

• ISBA Ethics Op. 98-03: Royalty-Type Finder's Fees and the Lawyer's Own Interest
• ISBA Ethics Op. 23-03: Fee for Referral to an Investment Advisor

Source

• Landing page: https://www.isba.org/ethics/opinions/9908