MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2001-29
Re: Attorney’s Lien: Retaining Checks Payable to the Client Following Termination of Representation by Client
Your request for an opinion by this Committee sets forth that you represented two clients, a mother and son, in a proceeding to exercise the mother’s elective share of her deceased husband’s estate. During the course of this representation, the decedent’s son was appointed personal representative of his father’s estate, and you successfully resolved an unpaid mortgage note to the benefit of the estate and laid the legal foundation for your client to assert her elective share. You also filed a malpractice claim on behalf of your clients against the decedent’s former attorney. Your client prohibited you from entering settlement negotiations to amicably resolve the malpractice claim and subsequently terminated your representation of him. You stated that the Court approved your withdrawal as representative of your two individual clients and the estate of your clients’ deceased family member due to “irreconcilable differences regarding how best to proceed” on your clients’ behalf.
Under the “Attorney Representation and Fee Agreement” signed by your clients, your fee would be either 15% of any assets realized through your client’s successful assertion of an elective share, plus expenses, or in the event that your client’s attempt to assert an elective share of her deceased husband’s estate was unsuccessful, an hourly rate of $200 per hour plus costs and expenses. The sum of your fees billed at an hourly rate, was not to exceed $30,000. The Fee Agreement also provides for a late fee of 1% per month on all bills remaining unpaid for ninety (90) days and a collection fee of 1/3 of the total amount owed. According to your statement, you remain unpaid for $18,697.89, of which $574.09 represent expenses and the remainder represents time expended pursuing your clients’ claims, interest and collection fees.
This sum is net of $5,000 received in the form of an initial retainer. You state that you have retained two checks payable to the your former client in the sum of $12,401.20.
Maryland permits an attorney to place a retaining lien on papers, securities and money which come into his possession. Attorney Grievance Comm’n of Maryland v. Sheridan, 357 Md. 1, 31(1999) (quoting Diamond v. Diamond, 298 Md. 24, 34-35 (1983)).
An attorney has a retaining lien on all papers, securities and money belonging to his client which come into his possession in the course of his professional employment. This is a general lien which gives him the right to retain such things until all his charges against his client are paid. Id. (emphasis in original).
The right to a retaining lien matures immediately upon termination of the representation, regardless of any immature contingency in the fee agreement. Vogelhut v. Kandel, 308 Md. 183, 191 (1986) (Surrender of papers under a retaining lien valid consideration for a contract between a attorney and his successor because the attorney had a legal right to possession of the papers.). However, see Skeens v. Miller, 331 Md. 331 (1993) and compare with Sotnuah v. Flacks, 352 Md. 241 (1998). When retaining papers, an attorney must bear in mind the requirements of RPC 1.15 and Rule 16-602 regarding property of clients and third parties held by an attorney in connection with the representation. We explained in MSBA Ethics Opinion 87-5 that such funds held by a attorney subject to a retaining lien may not be appropriated for personal or professional use. This committee will neither opine on the ethical propriety of past conduct nor render any legal opinion. Nonetheless, this material may be instructive to you regarding the sufficiency of your actions in instituting a proper common law retaining lien.
Maryland Rule of Professional Conduct (RPC) 1.16(d) states: “Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests . . . The lawyer may retain papers relating to the client to the extent permitted by other law.” MARYLAND RULE OF PROFESSIONAL CONDUCT 1.16(d) (West, 2001). Provided that retention of the checks payable to your client consists of a lawful retaining lien on your clients papers, RPC 1.16(d) permits you to retain the checks in question until your former clients pay your outstanding charges.