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Ethics Opinion

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RI-58

September 5, 1990

SYLLABUS

    A lawyer who has accepted a retainer for future legal work to be performed, but who has no way of contacting the client for instructions and consultation relating to the representation, must maintain the retainer in the lawyer trust account and await further instructions.

    A lawyer should establish procedures for accepting funds and make reasonable efforts to ensure that all employees comply with those procedures.

    Whether the lawyer would be permitted to engage in the same or substantially related matter on behalf of another client, or use a fact adverse to the prospective client, must be analyzed on the facts of each case.

    References: MRPC 1.15, 3.1, 5.3; RI-38; MCLA 567.11 et seq.

TEXT

A lawyer received a phone call from a woman who was inquiring for her fiance as to the attorney fee in an uncontested divorce case without children. The lawyer quoted the applicable fees and expenses, and scheduled an appointment for the fiance for the next morning. The lawyer was not given a phone number or address for the prospective client.

That afternoon while the lawyer was out of the office a man purporting to be the client came into the office and paid the lawyer's receptionist a cash amount equal to the discussed applicable fee. The client did not appear for the scheduled appointment nor has he contacted the office since that time. The lawyer never talked to or met with the prospective client.

The lawyer has checked the telephone directory and requested an address verification through the city, but has been unable to establish contact. The lawyer has no information with which to start a domestic relations suit, and maintains the cash fee in the firm's trust account. The lawyer asks for guidance with respect to any further ethical duties.

Regardless of whether or not a lawyer-client relationship has been established, MRPC 1.15(a) requires a lawyer to deposit funds of clients or third parties coming into the lawyer's possession in the firm trust account, or a segregated trust account in the name of the individual. The funds are to be maintained until the lawyer receives notice or instructions as to their disposition. The issues involving disposition of the retainer have been previously discussed and resolved in a prior opinion, RI-38. Essentially, the lawyer must take reasonable efforts to locate the "client," and if those efforts are unsuccessful the money is forfeited to the state pursuant to the statutory escheat procedure in MCLA 567.11, et seq.

The remaining issues involve what, if any, professional obligations are owed to this "client."Under these facts, the lawyer has insufficient information to prepare initial pleadings, notices or even communications concerning the legal matter, and thus is under no obligation to act in the divorce matter discussed. MRPC 1.1, 1.2, 2.1, 3.1, require a lawyer to provide competent services in order to achieve the client's objectives in a diligent and timely manner, and to keep the client reasonably informed of the status of the matter. These criteria do not come into play until a lawyer-client relationship has been formed. While the point of formation of such a relationship may vary depending on the facts of each case, it would be unrealistic to conclude that a lawyer-client relationship was formed by payment of a retainer, where the lawyer had never met the "client" and had no information with which to contact the client or do any other act to meet the "client's" objectives.

MRPC 1.15 requires a lawyer to keep complete records of all trust account funds and preserve them for a period of five years. Presumably, a record of this sort could not be complete without having the "client's" address and/or telephone number or some other means of contacting the client. To avoid similar problems in the future the lawyer should establish procedures for accepting funds and make reasonable efforts to ensure that the subordinates comply with those procedures. MRPC 5.3.

Whether the lawyer would be permitted to engage in the same or substantially related matter on behalf of another client, or use a fact adverse to the prospective client, must be analyzed on the facts if such circumstances arise and pursuant to MRPC 1.7, 1.8, 1.9.

 
     

 

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