Multistate Professional Responsibility Examination (MPRE)The Client-Lawyer RelationshipHard
A lawyer successfully represents a client in a personal injury lawsuit, securing a large settlement. The written fee agreement between the lawyer and client stipulates a 33% contingency fee. After deducting the lawyer's agreed-upon percentage and litigation expenses, a substantial amount remains. The client instructs the lawyer to hold the remaining funds in the client trust account indefinitely because the client is currently undergoing a difficult divorce and fears their spouse will attempt to claim the funds. What is the lawyer's ethical obligation regarding these funds?
- AThe lawyer must deposit the funds into an interest-bearing account and inform the client.
- BThe lawyer must promptly disburse the funds to the client, as the representation is complete.
- CThe lawyer must seek a court order to determine the appropriate handling of the funds.
- DThe lawyer may hold the funds in the client trust account as per the client's instruction.
Show answer & explanationAnswer & explanation
Correct answer: B. The lawyer must promptly disburse the funds to the client, as the representation is complete.
A lawyer must promptly deliver to the client any funds or other property that the client is entitled to receive. While a lawyer generally follows client instructions, holding funds indefinitely to defraud a spouse is assisting in a fraudulent act, which is impermissible. The lawyer cannot participate in or facilitate such a scheme.
Why the other options are wrong
- A. An interest-bearing account is generally for large sums held for a long time, but the core issue is the prompt delivery duty, not just the type of account.
- C. Seeking a court order is an extreme step and not the primary ethical obligation here. The primary obligation is to avoid assisting in fraud and to deliver funds.
- D. While a lawyer generally follows client instructions, they cannot do so if it involves assisting in a fraudulent or criminal act. Holding funds to conceal them from a spouse in a divorce is likely fraudulent.
Prompt Delivery of Client Funds
A lawyer must promptly deliver to the client any funds or other property that the client is entitled to receive. A lawyer cannot assist a client in a fraudulent scheme by holding funds indefinitely.
- Prompt delivery is mandatory.
- Cannot assist in client fraud/evasion.
- Ethical duty overrides client's unlawful instructions.
Memory trick: Fast Funds, No Fraud: Deliver client money quickly, don't aid evasion.