Getting paid – CA Supreme Court weighs in

In 2004, the California Supreme Court in Fletcher v Davis said that a lien by an attorney on a fund or judgment the lawyer receives to ensure compensation of an hourly fee engagement is enforceable.

However, when lien when created at the beginning of the engagement is an adverse interest to the client and requires the lawyer to advise the client that the client is entitled to independent counsel to review the lien agreement. Failure to give this advice and follow other requirements of Rule 3-300 of CA Rules of Professional Conduct makes the lien invalid.

The fact that the lien can be valid is remarkable. But requiring the lawyer to advise the client to get another lawyer weakens the initial lawyer-client relationship. Is it better, then, to forgo seeking such a lien and be very alert to the collection policies of the firm and the payment patterns of clients.

Categorized in: Cash Flow - Finances