May a lawyer accept a standing monthly retainer from businesses that openly lend at usurious rates?

Plain-English summary

The Board was told that a member of the bar testified under oath that he represented some eight or ten persons engaged in the short-time loan business, each with offices in the same city, and that he had been paid a monthly retainer by each for more than six years. The lenders were admittedly in the short-time loan business at a known and admitted rate of twenty percent per month (five dollars per month on a twenty-five dollar loan).

The Board concluded that the situation was fully covered by Advisory Opinion No. 5 and Advisory Opinion No. 14. It quoted Opinion No. 5's conclusion that a business association with an habitual violator of the usury laws of the state is not to be countenanced any more than such association with any other habitual violator of the law, and Opinion No. 14's restatement that a business association by a member of the State Bar with a loan shark, that is, one whose course of business conduct is contrary to the usury statutes, is unbecoming a member of the State Bar and tends to bring the profession into disrepute.

Currency note

This opinion was issued in 1937, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. The concern stated here, a lawyer's standing association with habitual law-violators, is now addressed through the modern rules on professional independence and misconduct. Subsequent rule amendments and later opinions 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 Treat this page as historical context, not current guidance.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: What was wrong with the retainer arrangement?

A: The Board treated the conduct as a continuing business association with persons who habitually violated the usury laws. It concluded such an association is not to be countenanced and tends to bring the profession into disrepute.

Q: Did the Board need a specific numbered rule to reach that result?

A: No. It rested on the principles already stated in Advisory Opinions Nos. 5 and 14 rather than citing a numbered Rule of Professional Conduct.

Background and rules framework

The opinion did not turn on a numbered Rule of Professional Conduct. It applied the principles of Oklahoma Advisory Opinions Nos. 5 and 14, which treated a lawyer's business association with habitual usury-law violators as unbecoming and as tending to bring the profession into disrepute. It predates the Model Rules and made no Model Rule citation.

Citations and references

Other opinions cited:

• Oklahoma Advisory Opinion No. 5 (Vol. 1, Advisory Opinions, p. 17): a business association with an habitual violator of the usury laws is not to be countenanced.
• Oklahoma Advisory Opinion No. 14 (Vol. 1, Advisory Opinions, p. 29): a business association with a loan shark is unbecoming a member of the bar and tends to bring the profession into disrepute.

See also

• Okla. Bar Ethics Op. 48: Lawyer writing fire insurance while practicing
• Okla. Bar Ethics Op. 64: Barter-and-trade exchange paying a lawyer in coupons
• Okla. Bar Ethics Op. 53: Representing a debt-adjustment company

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-141/

Original opinion text

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

Adopted November 26, 1937

The Board of Governors is in receipt of the following request for an opinion:

"A member of the bar testifies under oath that he represents some eight or ten persons, who are engaged in the short time loan business, and who each of them have offices in the city of ……….. He further testifies that he is paid a monthly retainer by each of these companies and that he has been so employed, and so paid for more than six years. These "companies" are persons who are admittedly engaged in the short time loan business, and their known and admitted rate of interest is twenty (20) per cent per month; five dollars ($5.00) per month interest on twenty-five dollars ($25.00) loan."

In response:

The situation set forth is fully covered by Advisory Opinion No. 5 (Vol. 1, Advisory Opinions, page 17), and by Advisory Opinion No. 14 (Vol. 1, Advisory Opinions, page 29). The conclusion of Advisory Opinion No. 5 is as follows:

"It is the opinion of the Board of Governors that a business association with an habitual violator of the usury laws of the state is not to be countenanced any more than such association with any other habitual violator of the law."

Advisory Opinion No. 14 concludes with the following quotation from Advisory Opinion No. 5:

"A business association by a member of the State Bar of Oklahoma with a loan shark, that is, one whose course of business conduct is contrary to the usury statutes of this state, is unbecoming a member of the State Bar and tends to bring the profession into disrepute."