If a lawyer's fee for representing a client was paid by the client's parent, can the lawyer later take a case against that parent?

Plain-English summary

A lawyer represented an 18-year-old (the "Son") in a criminal matter. The Son's divorced parents were both present at the first meeting and each paid half the retainer, though only the Son signed the retainer agreement. Later, the lawyer agreed to represent the Mother in two matters against the Father: a custody dispute not involving the Son, and a support matter in which the Son was among the subjects of the support sought. Opposing counsel objected that, having taken money from the Father, the lawyer had a conflict in representing the Mother against him (¶¶ 1-2).

The committee began from the settled principle that a third-party payor is not a client merely by paying the fee, citing N.Y. State 716 (1999) and the Restatement (¶¶ 4-5). It cautioned that a payor present at intake can sometimes be given the impression of being a client, so a lawyer may wish to make clear that the payor is not represented, avoid giving the payor legal advice, and protect the client's confidences as Rule 1.8(f)(3) requires (¶ 6). The rest of the opinion assumed the lawyer had not given the Father grounds to believe he was a client (¶ 7).

On that assumption, the Father was not a client, so representing the Mother adverse to him did not involve "representing differing interests" and was not a conflict under Rule 1.7(a)(1) (¶¶ 10, 12). The committee identified the live question as a personal-interest conflict under Rule 1.7(a)(2): whether the lawyer's interest in continuing to receive fees from the Father for the Son's case created a significant risk of adversely affecting the lawyer's judgment for the Mother, a fact question. Even if such a conflict existed, the lawyer could proceed by reasonably believing he could competently and diligently represent the Mother and obtaining her informed consent, confirmed in writing, under Rule 1.7(b) (¶¶ 12-13).

In practice

Under the New York rules as they stood at the time of the opinion, the committee held that paying a relative's legal fees does not by itself make the payor a client, so a later adverse representation is not automatically barred. The analysis the committee set out has two steps: first, whether the lawyer gave the payor reason to believe he was a client (if so, the rest of the opinion's assumption does not hold); and second, if not, whether the lawyer's financial interest in the continuing fee arrangement is a Rule 1.7(a)(2) personal-interest conflict, which the committee left as a fact question. The committee noted that even a personal-interest conflict is consentable: the lawyer may continue with the new client's informed written consent if the lawyer reasonably believes the representation will be competent and diligent. The committee also pointed to Rule 1.8(f) steps (clarifying the payor's non-client status, not advising the payor, protecting the client's confidences) that keep the payor from becoming a client in the first place.

Common questions

Q: Does paying a client's legal fees make someone the lawyer's client?

A: No. The committee concluded a third-party payor is not a client merely by paying the fee, citing N.Y. State 716 and the Restatement (¶¶ 4-5).

Q: Can the lawyer later sue the person who paid the client's fees?

A: Yes, if the lawyer never gave the payor reason to believe he was a client; then the new matter is not "representing differing interests" under Rule 1.7(a)(1). The only question is whether the lawyer's financial interest creates a significant risk to the lawyer's judgment (¶¶ 10-12).

Q: What if the lawyer's stake in the ongoing fees is a personal-interest conflict?

A: The lawyer may still proceed if he reasonably believes he can competently and diligently represent the new client and obtains that client's informed consent, confirmed in writing, under Rule 1.7(b) (¶¶ 12-13).

Background and rules framework

The opinion interprets New York Rule 1.7 (current-client conflicts, including personal-interest conflicts under 1.7(a)(2)) and Rule 1.8(f) (compensation from a third party), corresponding to ABA Model Rules 1.7 and 1.8(f). The analysis turns on whether the payor was ever a client and, if not, whether the lawyer's interest in the continuing fee arrangement is a consentable personal-interest conflict.

Citations and references

Rules of Professional Conduct:

• MR 1.7 / NY RPC 1.7(a), (b) (current-client conflicts; consent conditions)
• MR 1.8 / NY RPC 1.8(f) (compensation from one other than the client)

Other opinions cited:

• N.Y. State 716 (1999): an insurer that retains counsel for a policyholder is not the client
• N.Y. State 1000 (2014): Rule 1.8(f) permits third-party payment even by one whose interests are adverse to the client

See also

• NY State Bar Op. 1086: Referral fee from an investment advisor
• NY State Bar Op. 1067: Duties to a prospective client who is adverse to an existing client

Source

• Landing page: https://nysba.org/ethics-opinion-1063/