020121 OREO, ETH 2021-197

• Case Date: February 01, 2021
• Court: Oregon

ETH 2021-197 Formal Opinion No. 2021-197 Oregon Ethics Opinions February 2021          Payment to Lawyer from Estate Assets          Facts:          Lawyer represents Personal Representative in connection with the administration of a decedent’s probate estate.          Questions:          1. May Lawyer receive a fee from probate or estate funds before obtaining a court order authorizing the payments?          2. May Lawyer receive a fee from personal funds of Personal Representative before obtaining a court order authorizing the payments?          3. Would the answers be any different if Lawyer is Personal Representative?          Conclusions:          1. No.          2. Yes, qualified.          3. No.          Discussion:          Oregon RPC 1.5(a) provides that “[a] lawyer shall not enter into an agreement for, charge or collect an illegal or clearly excessive fee or a clearly excessive amount for expenses.” Illegal conduct is not limited to criminal conduct but includes conduct that is forbidden by statute. In re Hockett, 303 Or. 150, 162, 734 P.2d 877 (1987) (This case was decided based on former DR 7-102(A)(7) prior to the adoption of the Oregon Rules of Professional Conduct.)          Legal fees and personal representative fees must be approved by order of the court before they can be paid from estate funds. ORS 116.183. A lawyer who accepts attorney fees from estate assets without obtaining prior court approval engages in unethical conduct by collecting an illegal fee. “[A]ny such attorney fee that is collected without approval is unlawful and, hence, an ‘illegal’ fee.” In re Altstatt, 321 Or. 324, 333, 897 P.2d 1164 (1995), cert dismissed, 517 U.S. 1129 (1996).          However, ORS 116.183 does not prohibit a lawyer from being paid from the personal representative’s own funds. In fact, the statute clearly contemplates that Personal Representative will typically expend his or her own funds on attorney fees and subsequently apply for reimbursement from the estate. “A personal representative shall be...