Can a lawyer take a criminal-defense fee out of the client's recovery in a separate civil case?

Plain-English summary

A lawyer representing a client as plaintiff in a pending negligence action on a standard contingency fee was asked by the same client, recently arrested and indicted, to defend him in the criminal matter. The client proposed paying the criminal-defense fee as a fixed charge against the eventual recovery, if any, in the negligence action. The lawyer asked whether that arrangement was acceptable and, if not, whether an unaffiliated attorney not involved in the negligence action could undertake the criminal defense on the same deferred-payment terms. The committee answered both questions in the affirmative, subject to full disclosure and consent.

The committee explained that the Code strictly prohibits contingent fees in criminal cases under DR 2-106(C), largely because criminal cases do not produce a fund from which the fee can be paid. But it concluded the proposed arrangement was not a criminal contingent fee, because a contingent fee is one contingent on the successful accomplishment of the matter's subject, and here the criminal-defense fee did not depend on any outcome in the criminal action; it depended on the client's recovery in the separate civil case, which also supplied the fund from which the fixed fee could be paid. The committee said it made no difference whether the fixed fee was computed by hourly rate or as a percentage of the anticipated civil recovery, because in either case it was not contingent on any event in the criminal action.

The committee found the more difficult issue to be conflicts of interest under DR 5-101(A), because tying both fees to the civil recovery magnified the lawyer's stake in that recovery and could, for example, pressure him to favor a settlement sufficient to cover both fees over a riskier trial, or reduce his motivation in the criminal case if the civil case were lost. It concluded these pressures differed only in degree, not in kind, from those already inherent in any contingent fee, so the lawyer could proceed if he fully disclosed the pressures and obtained the client's consent; an unaffiliated attorney would face even fewer pressures. The committee strongly recommended memorializing the arrangement in writing per EC 2-19, and cautioned that under DR 5-103 the client remains ultimately liable for litigation expenses, which the lawyer may advance but not on the understanding that reimbursement is contingent on the civil outcome.

Currency note

This opinion was issued in 1986, before New York replaced the Code of Professional Responsibility (the Disciplinary Rules cited here) with the New York Rules of Professional Conduct, effective April 1, 2009. Fees, including the ban on contingent fees in criminal matters, are now addressed by Rule 1.5 (and Rule 1.5(d)), conflicts arising from the lawyer's own interest by Rule 1.7, and advancing litigation costs by Rule 1.8(e). 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: Is paying a criminal-defense fee out of a civil recovery a banned criminal contingent fee?

A: The committee concluded no, because the fee did not turn on the outcome of the criminal case; it turned on the client's recovery in a separate civil action, which also supplied the fund to pay it.

Q: Does it matter how the fixed fee is calculated?

A: The committee concluded it made no difference whether the fee was based on the hourly rate or a percentage of the anticipated civil recovery, since in either case it was not contingent on any event in the criminal action.

Q: What conflict of interest does this arrangement create?

A: The committee concluded that tying both fees to the civil recovery magnifies the lawyer's stake in that recovery and could pressure his judgment, but found those pressures different only in degree from any contingent fee, so consent after full disclosure under DR 5-101(A) suffices.

Q: Can an unaffiliated lawyer take the criminal case on the same terms?

A: The committee concluded yes, and that such a lawyer, not involved in the negligence action, would face even fewer pressures on his independent judgment in the criminal case.

Background and rules framework

The opinion applied New York Code DR 2-106(C) (no contingent fees in criminal matters), the loyalty and independent-judgment principles of EC 5-1, EC 5-2, and DR 5-101(A) (proceeding despite the lawyer's own interest with consent after full disclosure), EC 2-19 and EC 2-20 (clear, written fee agreements and the rationale for contingent fees), and DR 5-103 (the client's liability for and advancement of litigation expenses). These correspond to ABA Model Rule 1.5 (fees, including Rule 1.5(d) on criminal contingent fees), Model Rule 1.7 (conflicts from the lawyer's interest), and Model Rule 1.8(e) (advancing costs).

Citations and references

Rules of Professional Conduct:

• New York Code DR 2-106(C), DR 5-101(A), DR 5-103; EC 2-19, EC 2-20, EC 5-1, EC 5-2 (applied in the opinion)
• MR 1.5 (fees), including MR 1.5(d) (criminal contingent fees); MR 1.7 (conflicts); MR 1.8(e) (litigation costs)

Cases:

• U.S. ex rel. Simon v. Murphy, 349 F. Supp. 818 (E.D. Pa. 1972); Matter of Fasig, 444 N.E.2d 849 (Ind. 1983), prohibition on criminal contingent fees

Other opinions cited:

• N.Y. State 412 (1975): the ban on contingent fees in criminal matters
• Illinois Op. 84-8: a fee not contingent on the criminal outcome
• N.Y. State 464 (1977): advancing litigation expenses

See also

• NYC Bar Formal Op. 1993-2: Contingent Fees in Will Contests
• NYC Bar Formal Op. 1986-1: Guaranteeing an Immigration Result and Advertising the Guarantee

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-1986-3/