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96/97-10

 

Abstract 96/97-10

Summary of Facts Provided

A broker who handles the sale of dental practices proposes to recommend an attorney and then guaranty payment of the attorney's fees and costs if the attorney is chosen by a selling dentist to represent that dentist in connection with the sale of the dental practice.

Issues and Conclusions

May the attorney accept the dentist clients under applicable Colorado Rules?

The mere fact that payment of the attorney's fees is guaranteed by a person other than the client does not violate Colorado Rule 1.8(f), as long as each of the three prerequisites of that Rule are met -- the client must consent to the guaranty after full disclosure and consultation with the attorney; the attorney must remain fully independent notwithstanding the guaranty; and the attorney must fully maintain the client's rights of confidentiality as required by Colorado Rule 1.6. Moreover, the attorney is cautioned to be alert to meeting the further requirements of Colorado Rules 1.7(b), 5.4(a) and (c), 7.1, 7.2(c) and 7.3, which are briefly summarized below.

Colorado Rule 1.7(b) states that an attorney shall not proceed with any representation which is "materially limited" by the interests of the attorney or of some third person. The attorney must carefully consult with the client and should analyze whether the proposed guaranty of fees and costs might adversely impact on the relationship with the client, or on the attorney's independence and professional judgment. After such full consultation and analysis, the attorney must obtain the client's informed consent to the guaranty arrangement.

Similarly, Colorado Rule 5.4(c) prohibits a lawyer from undertaking the representation of any client where another "person who recommends, employs or pays the lawyer" directs or regulates the lawyer's services or judgment. Colorado Rule 5.4(a) generally prohibits an attorney from sharing legal fees with a non-lawyer, except under certain circumstances not present here.

Finally, Colorado Rules 7.1, 7.2(c) and 7.3 prohibit any false communications about a lawyer's services, prohibit the solicitation of clients, and prohibit a lawyer from paying anything of value to a third person in exchange for recommending the lawyer's services to another. The attorney here must take reasonable steps to assure that the broker does not do indirectly anything on behalf of the attorney which the attorney acting alone could not do under the Colorado Rules. See also, Colorado Bar Ethics Opinion 91 (Jan. 16, 1993) (22 Colo. Law. 497 (Mar. 1993).