Rules of Professional Conduct Related Ethical Opinions

1.15 Safekeeping Property

88-02: Scope of Representation; Truthfulness in Statements to Others

If an attorney is satisfied that a third party has a valid lien against the settlement of the attorney's client, the attorney should pay the funds accordingly.

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88-06: Conflict of Interest; Diligence

Circumstances in which a lawyer may disburse settlement proceeds obtained on behalf of a client against which a third party is asserting a lien. Obligation of lawyer to initiate formal proceedings to have the validity if the lien determined.

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89-10: Confidentiality of Information; Conflict of Interest; Professional Independence of Lawyer

It is ethically proper for a lawyer or law firm to accept credit cards for the payment of legal fees and retainers. The acceptance of credit cards does not infringe upon the confidential nature of communications between an attorney and a client, nor does it represent a conflict of interest or an interference with the attorney's professional independence. The lawyer and the client must enter into an agreement as to which party will bear the lender’s discount; the client must fully understand the terms of this agreement.

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90-11: Scope of Representations; Safekeeping Property; Expediting Litigation

Attorney must exercise independent professional judgment where he has secured and recorded a money judgment, the judgment debtor requests attorney to accept payment and enter satisfaction thereof but client cannot be located to obtain instructions.

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91-01: Confidentiality of Information; Safekeeping Property; Duty as to Client Property

Release, preservation or destruction of clients' financial and business documents when client cannot be located.

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91-10: Safekeeping Property

Attorney may apply court-awarded attorney's fees and costs to the balance owed him if client is not responding to repeated telephone calls and letters.

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92-01: Client Property; Retaining Liens

Obligation of an attorney in possession of his client's file to turn over documents, where a dispute has arisen between the client and the client's former attorney and both are claiming an interest in documents in the file.

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93-03: Contingent Fees; Domestic Relations Cases

Where attorney, at the conclusion of representation, returns to the client all original documents and any other document from the file which belong to the client, it is not ethically improper for the attorney to charge the client for the expense of making additional copies of the file at the client's request.

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93-14: Safeguard Property; Confidences; Tape Recordings

Opinion considers what an attorney should do with a tape recording given to the attorney by a client when the tape is a recording of telephone conversations made by client's spouse to other individuals including the spouse's former attorney in a prior divorce. The tape was not obtained illegally. The opinion concludes that the attorney may review the contents of the tape, with the client's informed consent and the attorney may have a duty to safeguard the tape and must advise the client of limitations on the attorney's conduct. One dissent.

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97-02: Personal Injury; Settlements; Creditors of Client

This opinion addresses several ethical issues regarding a lawyer's duties both to her client and to third parties when faced with a federal health insurance contract that has a right of recovery and/or subrogation against a personal injury settlement.  The policy's right of subrogation creates an "interest" in the proceeds, under ER 1.15, such that the lawyer cannot counsel the client to sign a release that might extinguish the insurer's claim unless the attorney intends to honor the claim.  Similarly, the lawyer cannot disburse the settlement proceeds without notifying the plan and delivering to the insurer any proceeds to which it is entitled. [ERs 1.7, 1.15]

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97-03: Client Funds; Trust Accounts; Missing Clients

A lawyer holding excess funds in a trust account whose ownership cannot be determined after reasonable efforts to do so, ethically should dispose of the funds pursuant to Arizona's Uniform Unclaimed Property Act, A.R.S. Sections 44-301 to 44-340. [ER 1.15]

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98-06: Liens; Creditors of Clients; Client Funds and Property; Settlements

This opinion addresses an attorney’s obligations to a third party who claims an interest in funds.  [ER 1.15]
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98-07: Client Files

This opinion discusses an attorneys responsibilities for a client's file after termination of representation. [ERs 1.4, 1.15, 1.16]
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99-02: Fees; Retainer Fees; Fee Agreements; Retainer Agreements

A non-refundable fee is ethical if reasonable under E.R. 1.5. A client must be fully informed about and expressly agree to such a fee, preferably in writing. Non-refundable fees are earned upon receipt and do not go into a lawyer's trust account. [ER 1.4 (b), 1.5, 1.15, 1.16 (d)]
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01-08: Withdrawal from Representation; Missing Clients; Communication with Client

When a client moves and fails to communicate with his lawyer, the lawyer may withdraw from the representation if the lawyer uses reasonable efforts to: 1) locate the client to inform him of the withdrawal; and 2) protect the client's interests upon withdrawal, including maintaining client confidences and safeguarding client property. [ERs 1.4, 1.6, 1.15, 1.16(b)]
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03-05: Conflicts of Interest; Settlements; Creditors of Client; Indemnify Releasee; Liens

A claimant's attorney may not ethically enter into any settlement agreement that would require the attorney to indemnify or hold the Releasee harmless from any lien claims against the settlement proceeds.
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03-07: Trust Account/ADR Practice Only

A lawyer who engages solely in alternative dispute resolution does not represent clients and, therefore, is not required to maintain a trust account in accordance with ER 1.15 and Rule 43, Rules of the Supreme Court of Arizona (Ariz. R.S.Ct.).
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04-01: Liens; Files of Client; Collection of Legal Fees

An attorney may not assert a retaining lien against any items in a client’s file that would prejudice the client’s rights. While an attorney may withhold internal practice management memoranda that does not reflect work done on the client’s behalf, the burden is on the attorney claiming the lien to identify with specificity any other documents or materials in the file which the attorney asserts are subject to the retaining lien, and which would not prejudice the client’s interests if withheld from the client.
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04-03: Client Funds and Property; Liens; Collection of Legal Fees; Missing Clients; Creditors of Client

An attorney cannot, without the consent of his former client, ethically disburse to himself funds from a former client's share of funds in the attorney's possession, where the former client owes the attorney unpaid fees, but the funds in the attorney's possession are unrelated to the representation of the former client. If the attorney is unable to locate the former client to obtain her consent, the attorney should commence an interpleader action.
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04-05: Deceased and Disabled Lawyers; Client Property; Trust Accounts

It is prudent for a lawyer to make arrangements for the administration of his or her client trust account in the event of the lawyer’s death or disability. It is beyond the jurisdiction of the Committee to offer legal advice as to the particular means of making such arrangements, but a prudent lawyer is well-advised to identify someone in advance of such a contingency who can assume such a responsibility, to develop a plan that covers both the contingencies of disability and death, and to incorporate plans for the administration of the client trust account into a broader plan for winding up the lawyer’s affairs if either contingency occurs.
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07-02: Maintaining Client Files; Client's Papers and Documents; Electronic Storage

In appropriate cases, a lawyer may keep current and closed client files as electronic images in an attempt to maintain a paperless law practice or to more economically store files.

After digitizing paper documents, a lawyer may not, without client consent, destroy original paper documents that belong to or were obtained from the client. After digitizing paper documents, a lawyer may destroy copies of paper documents that were obtained from the client unless the lawyer has reason to know that the client wants the lawyer to retain them. A lawyer has the discretion to decide whether to maintain the balance of the file solely as electronic images and destroy the paper documents.

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08-01: Fees; Trust Accounts; Credit Cards

After the Committee on the Rules of Professional Conduct issued this opinion, the Supreme Court of Arizona amended ER 1.15 and Rule 43 to allow lawyers, under certain circumstances, to take credit cards for advance fees and costs. Click here for the link to the Supreme Court of Arizona's website.

A lawyer may accept credit-card payments only for earned fees, earned-upon-receipt retainers, or reimbursement for advanced costs. Such credit-card payments may not be deposited into the lawyer’s trust account. A lawyer may not accept payment in advance by credit card for unearned fees or costs not yet advanced. A lawyer may receive a single, non-cash payment from a client consisting of funds belonging partly to the client and partly to the lawyer. Such a payment must occur by check, money order, or electronic-fund transfer, and must be deposited into the lawyer’s trust account. After the transaction has cleared the issuing bank, the lawyer’s portion must be removed promptly from the trust account.

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08-02: Client Files; Confidentiality of Information; Safekeeping Property; Duty as to Client Property

OPINION PARTIALLY WITHDRAWN; SEE OPINION 15-02

Lawyers have certain ethical obligations in maintaining closed client files.  Clients are entitled to most of the contents of a closed file.  Lawyers should establish a file-retention policy and communicate that policy to the client, in writing, at the commencement of the lawyer/client relationship.  If a lawyer does not have a file-retention policy, the lawyer will have additional ethical obligations to fulfill prior to the destruction of any closed client file.

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09-03: Trust Accounts; Safekeeping Property

An Arizona-licensed lawyer who maintains an office in Arizona but whose law firm also has an office in another jurisdiction may keep trust funds in a trust account held outside of Arizona provided that the client (or third person, where relevant) consents and the account is held at an approved financial institution. If the account is a pooled trust account on which interest and dividends are not paid to clients, the interest and dividends on the funds from the Arizona-licensed lawyer must be paid to the Arizona Foundation for Legal Services and Education.
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11-03: Liens; Safekeeping Client Property; Third-Party Interest in Settlement Funds

A lawyer holding property in which both the client and a third person have an “interest” must account for the property, pay undisputed sums to the proper party, and abide resolution of any disputes.  Arizona Rules of Professional Conduct (“ERs”) 1.15(d), (e).  ER 1.15(d) requires a lawyer with knowledge of claims against the client to protect those with an “interest” in funds in the lawyer’s control.  An “interest” is a matured legal or equitable claim.  The ethical rules do not require a claimant’s lawyer to search public records or other sources for medical liens or claims in order to acquire knowledge of an “interest.”

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13-01: Internet Marketing Vouchers or Coupons

Whether an Internet marketing voucher or coupon sold by a lawyer for legal representation is consistent with the Arizona Rules of Professional Conduct will depend on the terms and conditions of the voucher or coupon sold as well as the other facts and circumstances. Absent specific terms and conditions, however, it is unlikely that an Arizona lawyer can ethically use Internet marketing voucher- or coupon-based legal services due to a panoply of ethical concerns arising under Ethical Rules (ERs) 1.1, 1.2, 1.6, 1.7, 1.9, 1.15, 1.16, 1.18, 5.4, 7.1, and 7.2. 

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13-02: Client Files; Withholding Documents

In the extreme circumstances in which a lawyer is reasonably concerned that by providing a tangible copy of certain documents to an incarcerated client, the safety of the client or a third person may be jeopardized, the lawyer may ethically retain the documents and refuse to allow the incarcerated client to possess the documents during the representation. The lawyer must still fully inform the client as to the contents of the documents, discuss information contained in the documents with the client, and explain the lawyer’s rationale for wanting to retain possession of the documents. If the client cannot be persuaded to allow the lawyer to retain physical possession of the documents, the lawyer may ethically retain possession of the documents to protect the client’s safety or the safety of a third person, over the client’s objection.

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