Can a South Carolina lawyer collect a fee in a domestic case by suing on a note and foreclosing a mortgage given as security for the fee?

Plain-English summary

The committee was asked whether the Rules allow collection of a note, including foreclosure of a mortgage held as security for attorney's fees, in a domestic case.

The committee concluded there is no general ethical prohibition. In domestic relations cases, Rule 1.5(d) prohibits only fees contingent on the granting of a divorce or on the amount of alimony, support, or equitable division, and the fee must be reasonable under Rule 1.5(a). Citing prior opinions allowing a lawyer to secure a fee by promissory note with interest (Op. 81-01) and to use civil process to enforce a fee (Op. 81-21), the committee concluded that, provided the fee meets Rule 1.5, suing on a note or foreclosing a mortgage given as security generally is not prohibited.

The committee added one limit specific to domestic cases: because ownership of marital property may be a subject of the litigation, a lawyer may not obtain a security interest in property as long as title to that property is a subject matter of the litigation, citing Rule 1.8(j).

Currency note

This opinion was issued in 1996, before the South Carolina Bar's adoption of the 2005 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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: Can a lawyer foreclose a mortgage to collect a domestic-case fee?

A: The committee concluded there is no general ethical bar to suing on a note or foreclosing a mortgage given as security for the fee, provided the fee is reasonable under Rule 1.5.

Q: What fee limits apply in domestic cases?

A: The committee noted Rule 1.5(d) bars fees contingent on granting a divorce or on the amount of alimony, support, or equitable division, and Rule 1.5(a) requires the fee to be reasonable.

Q: Is there a limit on the security interest in a domestic case?

A: Yes. The committee stated a lawyer may not obtain a security interest in property as long as title to that property is a subject matter of the litigation, citing Rule 1.8(j).

Background and rules framework

The opinion applied Rule 1.5 (fees, including 1.5(a) reasonableness and 1.5(d) prohibited contingent fees in domestic cases) and Rule 1.8(j) (acquiring a proprietary interest in the subject of litigation), each corresponding to the like-numbered Model Rule.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 1.5 / Model Rule 1.5: fees; reasonableness and the domestic-case contingent-fee bar.
• South Carolina RPC 1.8(j) / Model Rule 1.8: acquiring a proprietary interest in litigation.

Other opinions cited:

• S.C. Bar Ethics Adv. Op. 81-01: securing a fee by promissory note with interest.
• S.C. Bar Ethics Adv. Op. 81-21: using civil process to enforce a fee.

See also

• SC Bar Ethics Op. 97-26: Buying a Client Settlement
• SC Bar Ethics Op. 96-26: Business Deal With Client

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-96-25/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 96-25

Do the Rules of Professional Conduct and/or other relevant rules or ethical considerations allow collection of a Note, including, if necessary, foreclosure of a Mortgage held as security for attorneys fees in a domestic case?

Summary:
There is no general ethical prohibition against collecting a fee by suing on a note, and foreclosing a mortgage, given to secure the fee. However, a lawyer may not obtain a security interest in property as long as that property is the subject matter of domestic litigation.

Opinion:
In domestic relations cases, Rule 1.5(d) prohibits only fees contingent upon the granting of a divorce, or the amount of alimony, support, or equitable division of property. The fees charged should, of course, be reasonable in light of the factors set forth in Rule 1.5(a).

In Advisory Opinion 81-01, it was opined that a lawyer could secure payment of his fee through taking a promissory note which included interest. Likewise, in Advisory Opinion 81-21, the use of civil process to enforce payment of a fee was implicitly endorsed. Accordingly, provided that the fee to be collected otherwise meets the requirements of Rule 1.5, use of civil process, such as suit on a note or foreclosure of a mortgage given as security for the fee generally is not prohibited by the Rules of Professional Conduct. However, in a domestic relations case, the ownership of marital property may be a subject of the litigation. A lawyer may not obtain a security interest in property as long as title to the property is a subject matter of litigation. Rule 1.8(j).