Can a divorce lawyer take a promissory note and mortgage on the marital home as a retainer or fee?
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This page answers the general question as of 1991. Ezel answers yours: whether it's allowed on your facts, under the current Massachusetts Rules of Professional Conduct, with citations.
Plain-English summary
The committee considered two related fact patterns. In the first, a lawyer representing a divorce client wanted to take, as a retainer, a note and mortgage on the marital home, the principal marital asset. In the second, a lawyer wanted to take, after the divorce was over, an assignment of a promissory note the client's former spouse had given the client as a result of the divorce, in payment of the lawyer's fee.
As a general matter, the committee said there is no ethical bar to a lawyer accepting payment of fees unequivocally due by taking an assignment of a note or a note secured by a mortgage on the client's real estate, with lawful interest, provided the client has notice and a reasonable chance to pay without interest (Opinion 83-1), and provided the lawyer weighs the client's sophistication, the reasonableness of the fee, the client's financial condition, and less stringent alternatives. The problem in the first pattern was timing. DR 5-103(A) bars a lawyer from acquiring a proprietary interest in the subject matter of litigation he is conducting, except a lien granted by law. Because division of the marital home is often a central, contested issue in a divorce, a lawyer holding a note and mortgage on it would be affected by the outcome and so would violate DR 5-103(A). The committee agreed with Maine Opinion 97 and concluded it is unethical to take such a note and mortgage during the pendency of a divorce in which the property's disposition is or may be in controversy.
For the second pattern, the committee concluded that DR 5-101 and DR 5-103 did not apply because the lawyer would acquire the interest after the divorce litigation was over, so an assignment of the ex-spouse's note in payment of the fee was permissible, subject to the general ethical considerations stated at the outset. After the divorce concludes, the client may also give the lawyer a note and mortgage on real estate awarded to the client. The committee added that if the fee arrangement were improper under domestic-relations or other substantive law (a question beyond its authority), the Disciplinary Rules would still bar dishonest conduct or an illegal fee under DR 1-102(A)(4), (5) and DR 2-106(A).
Currency note
This opinion was issued in 1991, before Massachusetts's adoption of the 2015 revisions to the Rules of Professional Conduct. 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, deadline, or requirement mentioned here.
Common questions
Q: Can a divorce lawyer take a mortgage on the marital home as a retainer while the case is pending?
A: No. The committee concluded the marital home is foreseeably the subject matter of the divorce, so taking a note and mortgage on it during the case would give the lawyer a proprietary interest in the litigation in violation of DR 5-103(A).
Q: Can the lawyer take a note or mortgage after the divorce is over?
A: Yes, on real estate awarded to the client in the divorce, subject to the general ethical considerations the committee listed (reasonableness of the fee, the client's ability to pay, and less stringent alternatives).
Q: Can the lawyer take an assignment of a note the ex-spouse gave the client, to pay the fee?
A: Yes. The committee concluded DR 5-101 and DR 5-103 do not apply because the lawyer acquires that interest after the litigation has concluded.
Background and rules framework
The opinion turned on DR 5-103(A), which barred a lawyer from acquiring a proprietary interest in the subject matter of litigation he conducts (except a lien granted by law). That corresponds today to Model Rule 1.8(i) (proprietary interest in the cause of action). The general fee-security analysis implicates Model Rule 1.8(a) (business transactions with a client) and the underlying conflict concerns of Model Rule 1.7. The committee also referenced DR 5-101 (the lawyer's own interests), DR 1-102(A)(4), (5) (dishonesty; conduct prejudicial to the administration of justice), and DR 2-106(A) (illegal or clearly excessive fees).
Citations and references
Rules of Professional Conduct:
- DR 5-103(A) / Model Rule 1.8(i) (proprietary interest in the subject matter of litigation)
- DR 5-101 / Model Rule 1.7 (the lawyer's own financial interest)
- Model Rule 1.8(a) (business transactions with a client)
- DR 1-102(A)(4), (5); DR 2-106(A) (dishonesty; illegal or excessive fees)
Cases:
- Widett & Widett v. Snyder, 392 Mass. 778 (1984) (general discussion of attorney fee security)
Other opinions cited:
- MBA Opinion 83-1 (taking a note or mortgage for fees due)
- Maine Bd. of Bar Overseers Op. 97 (1989) (mortgage on marital property for fees unethical)
- Connecticut Bar Ass'n Informal Op. 87-3 (1987) (note and mortgage allowed subject to court modification)
See also
Source
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