Can a lawyer take a promissory note secured by a deed of trust for unpaid attorney fees?

Plain-English summary

The inquiry concerned a lawyer obtaining a promissory note for the balance of undisputed attorney fees, secured by deeds of trust.

The committee was of the opinion that this arrangement must comply with the requirements of RPC 1.8(a), the rule governing a lawyer entering into a business transaction with a client or acquiring an interest adverse to a client. The committee also directed attention to In re McGlothen, 99 Wn.2d 515, 663 P.2d 1330 (1983), as discussing some of the issues the inquiry raised.

Currency note

This opinion was issued in 1987, before the Washington State Bar Association's adoption of the 2006 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 Treat this page as historical context, not current guidance.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 secure unpaid fees with a deed of trust on the client's property?

A: The committee said such a note and deed of trust must comply with RPC 1.8(a), the business-transaction-with-a-client rule, rather than treating it as automatically permitted or barred.

Q: Did it matter that the fees were undisputed?

A: The opinion framed the note as covering the balance of undisputed attorney fees, but still required compliance with RPC 1.8(a) for the secured transaction.

Background and rules framework

The opinion applied RPC 1.8(a) (business transactions with a client and acquiring an adverse interest, corresponding to ABA Model Rule 1.8(a)). The committee treated a fee-collection note secured by deeds of trust as a transaction subject to that rule's requirements, and cited a Washington Supreme Court decision as related authority.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.8(a) (business transactions with clients); Washington RPC 1.8(a)

Cases:

• In re McGlothen, 99 Wn.2d 515, 663 P.2d 1330 (Wash. 1983), cited as discussing issues raised by the inquiry

See also

• WSBA Ethics Op. 1106: Buying a Client's Property, Leaseback
• WSBA Ethics Op. 1295: Lawyer Also a Mortgage Broker
• WSBA Ethics Op. 1573: Marketing a Spouse's Business

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1147

Original opinion text

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

Advisory Opinion: 1110
Year Issued: 1987
RPC(s): RPC 1.8(a)
Subject: Transaction with client; promissory note secured by deed of trust for undisputed attorney fees

The Committee was of the opinion that the obtaining of a promissory note for the balance of undisputed attorneys fees, secured by deeds of trust, must comply with the requirements of Rule 1.8(a) of the Rules of Professional Conduct. In addition, the Committee directed me to call your attention to In Re McGlothen, 99 W.2d 515, 663 P.2d 1330 (1983) which discusses some of the issue raised by your inquiry.