ETH 2010-6.

• Court: Ohio

Ohio Ethics Opinions 2010. ETH 2010-6. The Supreme Court of OhioBOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE 65 SOUTH FRONT STREET, 5^TH FLOOR, COLUMBUS, OH 43215-3431 (614) 387-9370 (888) 664-8345 FAX: (614) 387-9379 www.supremecourt.ohio.govOFFICE OF SECRETARYOPINION 2010-6Issued October 8, 2010SYLLABUS: A lawyer representing a client in a civil matter may not enter into a contingent fee agreement whereby the client grants the lawyer a power of attorney to take any action and execute all documents that the attorney deems necessary in the matter, including but not limited to signing on the client's behalf a settlement agreement and release, a settlement check, or a closing statement. Such use of a broad power of attorney in a contingent fee agreement contravenes Prof. Cond. Rule 1.2(a) by improperly allocating all of the authority regarding the representation from the client to the lawyer and disregards Prof. Cond. Rule 1.4(a) by eliminating required communication by the lawyer to the client. Such practice is improper unless a lawyer is able to demonstrate that there is an extraordinary circumstance in which there is an exigent reason for a client to grant such authority to the lawyer. For example, an extraordinary circumstance might arise when there is an urgent surgery or travel to a remote location.OPINION: This opinion addresses a question regarding a lawyer's use of a contingent fee agreement in which a client grants a power of attorney to the lawyer as to all aspects of a legal matter.

May a lawyer representing a client in a civil matter, enter into a contingent fee agreement whereby the client grants the lawyer a power of attorney to take any action and execute all documents that the attorney deems necessary in the matter, including but not limited to signing on the client's behalf a settlement agreement and release, a settlement check, or a closing statement?

Introduction A lawyer's contingent fee representation of a client in a civil matter requires skillful communication. A lawyer must communicate effectively to understand the client's objectives of representation, explain settlement offers, reach agreement to settlement terms, obtain necessary client signatures, and disburse settlement proceeds. Such communication is a time honored legal skill, but is a time laden process. In an effort to streamline a contingent fee representation, a busy lawyer might be tempted to obtain a client's power of attorney, granting the lawyer authority to make decisions and sign necessary documents on the client's behalf in the matter. The lawyer might rationalize that such authority would benefit a client, for example, by eliminating the need for a client to travel to the attorney's office to sign documents or to sign a settlement disbursement. But such benefit, if any, does not outweigh the ethical risks that arise when a lawyer requires a client to sign a contingent fee agreement granting such broad authority to the lawyer. As explained in this opinion, a power of attorney granting a lawyer authority to make all decisions and execute all documents that the lawyer deems necessary in a client's contingent fee matter might streamline a lawyer's representation and provide some convenience for a client, but, in the absence of extraordinary circumstances, the practice is unethical for the lawyer and shortchanges the client's role in the legal representation. The proposed use of a broad power of attorney in a contingent fee agreement contravenes Prof. Cond. Rule 1.2(a) by improperly allocating all of the authority regarding the representation from the client to the lawyer, and disregards Prof. Cond. Rule 1.4(a) by improperly eliminating required communication. Allocating authority and communicating with a client as required by Prof. Cond. Rules 1.2(a) and 1.4(a) The proper allocation of authority between a lawyer and client is addressed in Prof. Cond. Rule 1.2. Prof. Cond. Rule 1.2(a) requires that "[a] lawyer shall abide by a client's decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued." Further, Prof. Cond. Rule 1.2(a) unequivocally requires that "[a] lawyer shall abide by a client's decision whether to settle a matter." As explained in Comment [1] to Prof. Cond. Rule 1.2: "Division (a) confers upon the client the ultimate authority to determine the purposes to be served by legal representation, within the limits imposed by law and the lawyer's professional obligations. The decisions specified in division (a), such as to whether to settle a civil matter, must also be made by the client...