Could a lawyer accept shares in a corporate client as payment for legal services?

Plain-English summary

A lawyer forming a company for a client asked whether shares could pay for legal work.

The opinion permitted stock or another ownership interest as payment if Rule 4-1.8(a)'s steps were followed. It identified possible conflicts and said the lawyer should discuss their consequences with the client, including withdrawal and a possible personal position adverse to current clients.

Currency note

This opinion was issued in 2000, before Missouri’s 2007 revisions to the Rules of Professional Conduct. Later amendments or opinions may have changed the analysis. Treat this page as historical context and verify current rules before relying on it. The official Rule 4-1.9 and 4-1.10 reference notes identify July 1, 2007 amendments.

Common questions

Q: Was stock payment categorically barred?

A: No. The opinion permitted it subject to Rule 4-1.8(a).

Q: What conflict consequences did it identify?

A: Potential withdrawal or the lawyer becoming personally adverse to current clients.

Background and rules framework

The opinion applied Rule 4-1.8(a) to payment through a client ownership interest.

Citations and references

Missouri Rules of Professional Conduct:

• Rule 4-1.8

See also

• Missouri Informal Op. 20050041: Third-Party Fee Security

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/20000216/

• Rule revision reference: Missouri Informal Opinion 20030007

Original opinion text

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

QUESTION: Attorney is in the process of incorporating a new company for a client and doing other corporate related work for the new company. May Attorney accept a percentage of stock as payment and if so, under what circumstances?

ANSWER: It is permissible to accept payment for services in stock or some other ownership interest in the client. Attorney must follow the steps set forth in Rule 4–1.8(a). This situation creates the potential for a number of types of conflicts of interest to arise. Attorney should discuss the potential for conflicts and the result if they do arise with Attorney’s clients. For example, the discussion should include the potential that Attorney might have to withdraw and that Attorney might personally be in a position adverse to Attorney’s current clients.