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Lawyers and gifts: ‘The ethical implications are not always so clear’

Assistant Ethics Counsel Columns

EthicsWhile both lawyers and clients frequently offer gifts with the best of intentions, the ethical implications are not always so clear. To help, here are some common scenarios involving gifts and what to watch for in Florida’s Rules of Professional Conduct.

Scenario #1:

A prospective client comes to you for a family law matter. You do not take the case, but you recommend a colleague to the prospective client. The prospective client hires the colleague. As a show of gratitude, the colleague sends you a gift certificate – can you keep it? Rule 4-7.17(b) of the Rules Regulating The Florida Bar states that “[a] lawyer may not give anything of value to a person for recommending the lawyer’s services.. . . ”

Can I keep the gift certificate as a “referral fee?” Rule 4-1.5(g) requires a lawyer to accept joint responsibility for the representation if dividing fees with a lawyer in another firm. Unless you want to be jointly responsible for the case, the best advice is to send the gift certificate back to the colleague with your kind regards.

Scenario #2:

It’s holiday time – presents for everyone, right? After all, you would like to show your current and former clients how much you appreciate their continued business and support. Can you?

Rule 4-1.8 prohibits a lawyer from providing financial assistance to a client in connection with pending or contemplated litigation. Additionally, Rule 4-5.4(a) prohibits the lawyer from sharing legal fees with a nonlawyer, so the value of any gift cannot be tied to the number of clients brought into the firm by the clients’ recommendations or a percentage of fees generated by the clients’ recommendations.

But why is a lawyer prohibited from giving a holiday gift that could be considered financial assistance? Rule 4-1.8(e) prohibits a lawyer from providing financial assistance to a client in connection with pending or contemplated litigation except that the lawyer may advance court costs and litigation of litigation. Lawyers are not permitted to advance living expenses. The comment to Rule 4-1.8 explains that making or guaranteeing loans to clients for living expenses is not permitted, “because to do so would encourage clients to pursue lawsuits that might not otherwise be brought and because such assistance gives lawyers too great a financial stake in the litigation.” Lawyers have been disciplined by the Florida Supreme Court for violating Rule 4-1.8(e). In The Florida Bar v. Rue, 643 So. 2d 1080 (Fla. 1994), a lawyer was suspended for 91 days from the practice of law for, among other things, advancing money to clients for living expenses in connection with litigation cases. In The Florida Bar v. Suprina, 468 So. 2d 988 (Fla. 1985), a lawyer was publicly reprimanded for making improper loans to clients.

The safest approach is to send your client a de minimus gift. Holiday cards are permissible for any recipient with whom the lawyer has a prior professional relationship.

Scenario #3:

A happy client sends you a gift card. Can you keep it? It depends.

Rule 4-1.8(c) addresses a lawyer’s acceptance of gifts from a client. Pursuant to the rule, a lawyer may not solicit or draft a gift for themselves or for a relative of the lawyer unless the client offering the gift is also a relative such as a “spouse, child, grandchild, parent, grandparent, or other relative with whom the lawyer or the client maintains a close, familial relationship.”

What if you do not solicit the gift, but your client is so happy with your work that the gift certificate is $20,000? Can you keep it?

The best advice is to graciously refuse the gift. The comment to Rule 4-1.8 explains that “a simple gift such as a present given at a holiday or as a token of appreciation is permitted. If a client offers the lawyer a more substantial gift, [the rule] does not prohibit the lawyer from accepting it, although the gift may be voidable by the client under the doctrine of undue influence, which treats client gifts as presumptively fraudulent.” Additionally, Pennsylvania Informal Ethics Opinion 95-177 (1996) suggests that acceptance of substantial gift from a client could be seen as excessive fee disguised as gift. Excessive fees are prohibited by Rule 4-1.5(a).

If a lawyer does accept a gift from a client, the lawyer must disclose the gift to the lawyer’s firm. In The Florida Bar v. Shankman, 908 So. 2d 379 (Fla. 2005), a lawyer was suspended from the practice of law for 91 days for breach of duty to firm, the client, and a referring lawyer as the disciplined lawyer did not disclose that he had accepted a $20,000 “bonus” from client in a contingency fee case.

Finally, please remember that if you ever have a question regarding gifts or any other issue in the Rules of Professional Conduct, you may seek written guidance from The Florida Bar’s Ethics & Advertising Department or contact the Ethics Hotline at 1-800-235-8619.