Washington Lawyer - March/April 2021 - 45

SPEAKING OF E THICS
a charging lien as to funds recovered from the
case and explained how such a claim could
affect the total amount of attorney's fees Jim
might be responsible for if Stan won or settled
the case. In Opinion 379, the committee discusses the requirements of Rule 1.5(c), which
sets forth the information that must be communicated to the client in contingency fee agreements. The committee states: " The client's
potential liability to predecessor counsel for any
recovery in a contingent fee case is so well
understood that successor counsel may have an
affirmative obligation to warn the client about
it in their initial negotiations about successor
counsel's fee. " The committee goes on to say
that " absent such disclosure, many clients would
not fully understand the basis or rate of the fees
for which they might ultimately be liable. " 3
Whether an attorney has a valid charging lien is
a question of law. The case law demonstrates
that in order to assert a charging lien a lawyer
must demonstrate four things: (1) language in
the fee agreement that gives rise to an equitable lien;4 (2) substantial performance of
services by the attorney;5 (3) the attorney was
discharged without cause;6 and (4) there is
recovery of real or personal property that is the
subject of the fee agreement.7 Jonas is free to
assert that he has a charging lien if he believes
he has a basis in law and fact for doing so,
or if he believes he can make a " good-faith
argument for an extension, modification, or
reversal of existing law. " 8
Even if Jim did not tell Stan that the case was
previously handled by another attorney, a
review of the client file would have put Stan on
notice that there was a predecessor counsel.
He also would have known the extent of the
work performed by Jonas. Therefore, Stan
should have notified Jim about his potential
liability to Jonas for attorney's fees.
Obligation of Successor Counsel to
Safeguard Funds. Once Stan received the
notice of lien, he should not have disbursed all
the funds from the settlement to himself and
the client. Rule 1.15(d) requires that a lawyer
hold in their trust account any funds that are in
dispute.9 Stan knew before he disbursed the
funds that a third party, Jonas, had a potential
claim to some of the funds from the settlement. In Opinion 379, the committee discusses
in detail the requirements of Rule 1.15(d). They
also further discuss Opinion 293, which provides guidance on property in dispute and how
to determine whether that dispute gives rise to

a " just claim, " which would require successor
counsel to hold disputed funds in a trust
account.
The committee expressly states, " We have no
doubt that a charging lien is a 'just claim' that
successor counsel cannot ignore in disbursing
the proceeds of the representation. " In light
of Opinions 293 and 379, Jonas's notice of a
charging lien was a " just claim, " which Stan was
aware of prior to disbursing the funds. Therefore,
Stan likely violated Rule 1.15(d). He should have
set aside the disputed portion of the funds until
there was resolution of the matter.10

CONCLUSION
The ethical issues surrounding charging liens
are ones that require care and attention. Legal
Ethics Opinion 379 provides a roadmap to
those issues and should be consulted by attorneys who accept contingency fee cases both
as initial and successor counsel.
Contact the D.C. Bar legal ethics counsel at
202-737-4700, ext. 1010.

NOTES

1 Compliance with Rule 1.5 starts with ensuring
that your fee is reasonable in accordance
with Rule 1.5(a). Additionally, in the context of
contingency fee cases, your agreement must
also comply with Rule 1.5(c).
2 See also Opinion 357, which discusses the
treatment of files held in electronic format, and
Opinion 372, which discusses client files in the
context of law firm dissolutions.
3 Rule 1.5(b) requires that a lawyer communicate
the basis or rate of the fee, the scope of the
representation, and the expenses for which the
client will be responsible.
4 Friedman v. Harris, 158 F.2d 187 (D.C. Cir. 1946).
5 In re Waller, 524 A.2d 748 (D.C. 1987).
6 Kaushiva v. Hutter, 454 A.2d 1373 (D.C. 1983).
7 Elam v. Monarch Life Insurance Company, 598 A.2d
1167 (D.C. 1991).
8 See D.C. Rule 3.1
9 " If a dispute arises concerning the respective
interests among persons claiming an interest in
such property . . . the portion in dispute shall be
kept separate by the lawyer until the dispute is
resolved. Any funds in dispute shall be deposited
in a separate account meeting the requirements
of paragraph (a) and (b). "
10 In re Robinson, 225 A.3d 402 (D.C. 2020) (finding
that the respondent violated Rule 1.15(d) when
he failed to place the disputed portion of the
attorney's fees in a trust account pending
resolution of the dispute).

MARCH/APRIL 2021

WASHINGTON LAWYER 45

http://ww.dcbarfoundation.org

Washington Lawyer - March/April 2021

Table of Contents for the Digital Edition of Washington Lawyer - March/April 2021