Can Divorce-Split Property Proceedings Be Done With Attorneys on a Contingency Pay Basis, Offering Lawyers a Part of the Estate to Pay for Court Costs?
I cannot answer this question as it applies in all jurisdictions because I am not licensed in all jurisdictions, but I can answer this question at that applies in the jurisdiction where I practice divorce and family law (Utah):
Utah Rules Professional Conduct Rule 1.5 provides:
(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof[.]
Divorce attorneys can acquire an interest in a client’s property through an attorney’s lien. This excerpt from an article by Keith A. Call in the Utah Bar , Volume 27 No. 1 Jan/Feb 2014l explains the attorney’s lien clearly and succinctly:
Rule 1.8(i) specifically provides that a lawyer shall not acquire an interest in the cause of action or subject matter of the litigation, except that the lawyer may (1) “acquire a lien authorized by law to secure [his] fee,” and (2) enter into a reasonable contingent fee arrangement in civil cases. Id. R. 1.8(i).
The Statutory Attorney’s Lien
A “lien authorized by law” as described in Rule 1.8(i)(1) includes the statutory attorney’s lien found in Utah Code section 38-2-7. By statute, a lawyer automatically receives a lien on any money or property that is the “subject of or connected with the work performed.” Utah Code Ann. § 38-2-7(2) (LexisNexis 2010). This includes real or personal property, funds held by the attorney, and any settlement, judgment, and proceeds thereof. Id. The statute includes limitations on pending criminal and domestic relations matters. Id. § 38-2-7(9).
The statutory attorney’s lien is not a “business transaction” with the client and is therefore exempt from the requirements of Rule 1.8(a). See Utah State Bar, Ethics Advisory Op. Comm., Op. 01-01 (2001). The Ethics Advisory Opinion Committee has further opined that, given a lack of clarity in the extent of an attorney’s statutory lien rights, lawyers should not be subject to discipline for asserting lien rights according to a good faith interpretation of the statute. See id. The statutory “attorney’s lien commences at the time of employment.” Utah Code Ann. § 38-2-7(3). Notice of the lien can be given by filing a notice of lien in a pending legal action in which the attorney performed services or, in the case of real property, by filing a notice of lien with the county recorder. Id. § 38-2-7(5).
To enforce the statutory lien, a lawyer must first demand payment from the client. If the client fails to pay within thirty days, the lawyer can move to intervene in the case in which the attorney performed services or the lawyer may file a separate legal action to enforce the lien. Id. § 38-2-7(4)-(5).
(9) This section does not authorize an attorney to have a lien in the representation of a client in a criminal matter or domestic relations matter where a final order of divorce has not been secured unless:
(a) the criminal matter has been concluded or the domestic relations matter has been concluded by the securing of a final order of divorce or the attorney/client relationship has terminated; and
(b) the client has failed to fulfill the client’s financial obligation to the attorney.
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