Can a client give a lawyer advance authority to settle within a set range, and can the client take that authority back?
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This page answers the general question as of 2022. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
The opinion addresses the limits on a client's grant of advance settlement authority to a lawyer, whether given at the outset of the engagement or during the representation. It concludes the authority is real but not unfettered, and is constrained by the lawyer's duties under the New York Rules of Professional Conduct.
The opinion concludes the client may revoke advance authority at any time, and that the lawyer is under a continuing duty under Rule 1.4 to communicate material developments and keep the client reasonably informed about the status of the matter, including all settlement offers. The delegation is meant to streamline the representation, not to strip the client of control of the case or reduce the client's right to competent, diligent representation.
On the tension between delegated authority and the duty to communicate, the opinion concludes the lawyer should exercise caution before settling within a previously authorized range when the assumptions underlying the client's delegation are no longer current, and is ethically obligated to disclose information that may be critical to the client's decision whether to revoke the authority. Citing Comment [3] to Rule 1.2, the opinion states the lawyer must not become, in effect, the "client," regardless of the authority initially vested.
The opinion adds a counterweight: if the client's revocation is a prelude to an unrealistic settlement posture, the lawyer is not obligated to pursue what the lawyer regards as unreasonable settlement demands or litigation strategy, and may have options under Rule 1.16.
In practice
Under this opinion, a New York lawyer who holds advance settlement authority must continue to report material developments and settlement offers to the client and must treat the authority as revocable at will. The opinion frames the operative limit as currency of the assumptions: unless it is indisputable that no material development has occurred since the delegation, the client is entitled to complete, accurate, and up-to-date information so the client can decide whether to revoke or modify the authority.
The opinion also recognizes the lawyer's own professional judgment: a lawyer is not required to pursue settlement demands or strategy the lawyer regards as unreasonable, even where the client revokes prior authority.
Common questions
Q: Can my client give me authority to settle within a range up front?
A: Yes. The opinion concludes a client may grant advance settlement authority at the outset or during the representation, but the authority is limited by the lawyer's continuing duties and is revocable.
Q: Can the client take that authority back?
A: At any time. The opinion concludes the client may revoke advance settlement authority whenever the client chooses, and the lawyer must keep the client informed enough to make that decision.
Q: If I have advance authority, do I still have to report settlement offers?
A: Yes. The opinion concludes the Rule 1.4 duty to communicate material developments and all settlement offers continues despite the delegation, so the lawyer cannot settle on the client's behalf while withholding offers or developments.
Q: Can I settle within the authorized range even if circumstances changed?
A: The opinion says to be cautious. Unless it is indisputable that no material development has occurred, the lawyer should disclose critical information and let the client decide whether to revoke, rather than settle on stale assumptions.
Background and rules framework
The opinion interprets New York Rules of Professional Conduct that track the ABA Model Rules: Rule 1.2 (allocation of authority, including the client's settlement decision and Comment [3]), Rule 1.4 (communication), Rule 1.1 (competence), Rule 1.3 (diligence), Rule 1.7 (conflicts), and Rule 1.16 (declining or terminating representation). The opinion situates advance authority within the client's ultimate control over settlement under Rule 1.2(a).
Citations and references
Rules of Professional Conduct:
- MR / NY RPC 1.2(a) and Comment [3] (settlement decision; allocation of authority)
- MR / NY RPC 1.4 (communication; reporting offers and developments)
- MR / NY RPC 1.1, 1.3 (competence and diligence)
- MR / NY RPC 1.7 (conflicts of interest)
- MR / NY RPC 1.16 (declining or terminating representation)
See also
- NYC Bar Ethics Op. 2020-3: A lawyer's obligations when negotiating settlements
- NYC Bar Ethics Op. 2009-2: Ethical duties concerning self-represented persons
Source
- Landing page: https://www.nycbar.org/reports/formal-opinion-2022-2-qualification-of-advance-settlement-authority/
- Original PDF: https://www.nycbar.org/wp-content/uploads/2023/05/20221080-AdvanceAuthorityEthicsOpinion.pdf
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