Ethics/Professional Responsibility
Apr. 28, 2017
Gifts from client (Rule 1.8.3)
See more on Gifts from client (Rule 1.8.3)Proposed Rule 1.8.3 removes ambiguities in the current rule dealing with gifts from clients. By Ray Ryan
Raymond Y. Ryan
Partner
Stanford, Ryan & Associates, APC
Legal malpractice
2535 Camino Del Rio S Ste 324
San Diego , CA 92108-3757
Phone: (619) 696-6160
Email: ray@thelegalmalpracticefirm.com
Thomas Jefferson School of Law
Stanford, Ryan & Associates is exclusively dedicated to litigating legal malpractice cases for consumers of legal services throughout California.
Special Coverage
PROPOSED RULES OF PROFESSIONAL CONDUCT
Each holiday season, lawyers traditionally receive bottles of wine and alcohol from friends, vendors and clients. Receiving small gifts is commonly ethical for lawyers. On the other hand, inheriting your client's estate will raise eyebrows and probably draw the wrong kind of attention to you and your practice.
California Rule of Professional Conduct 4-400 generally frowns upon lawyers who receive large gifts through testamentary instruments from their clients. But the current rule may not go far enough to protect the property of vulnerable clients and their natural successor's rights. For discipline to be ordered, the State Bar's chief trial counsel has to prove that the lawyer engaged in the "impermissible influence" of a client. Magee v. State Bar, 58 Cal. 2d 423 (1962). Although the lawyer bears the burden of overcoming the inference of undue influence in these infrequent situations, the departed client has no voice in the proceedings making discipline in this area challenging.
Proposed Rule 1.8.3 removes any ambiguities by adding an entire paragraph declaring that a lawyer may not ethically prepare a testamentary instrument giving the lawyer, or the lawyer's blood relatives, any substantial gift from a client who is not a relative. The wrinkle is that a scribner may assign themselves fiduciary roles for their clients' estates as executors or trustees so long as compliance with other rules are followed. Therefore, the new proposed rule crystallizes the primary concept of fairness between client and lawyer involving gifts while making it easier for the State Bar's chief trial counsel to prosecute alleged violations.
Rule 1.8.3 Gifts From Client
(Proposed rule adopted by the board March 9, 2017)
(a) A lawyer shall not:
(1) solicit a client to make a substantial* gift, including a testamentary gift, to the lawyer or a person* related to the lawyer, unless the lawyer or other recipient of the gift is related to the client, or
(2) prepare on behalf of a client an instrument giving the lawyer or a person* related to the lawyer any substantial* gift, unless (i) the lawyer or other recipient of the gift is related to the client or (ii) the client has been advised by an independent lawyer who has provided a certificate of independent review that complies with the requirements of Probate Code § 21384.
(b) For purposes of this rule, related persons* include a person* who is "related by blood or affinity" as that term is defined in California Probate Code § 21374(a).
Comment
[1] A lawyer or a person* related to a lawyer may accept a gift from the lawyer's client, subject to general standards of fairness and absence of undue influence. A lawyer also does not violate this rule merely by engaging in conduct that might result in a client making a gift, such as by sending the client a wedding announcement. Discipline is appropriate where impermissible influence occurs. See Magee v. State Bar (1962) 58 Cal.2d 423 [24 Cal.Rptr. 839].
[2] This rule does not prohibit a lawyer from seeking to have the lawyer or a partner* or associate of the lawyer named as executor of the client's estate or to another potentially lucrative fiduciary position. Such appointments, however, will be subject to rule 1.7(b) and (c).
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