According to a recent opinion from the New York State Bar Association Committee on Professional Ethics, attorneys who represent a client in both a criminal and civil matter are permitted to use the proceeds from the civil case to cover legal fees in the criminal defense matter.
The committee issued the opinion in response to an attorney who asked if the fees incurred in a criminal defense matter could be funded by the proceeds of a settlement or award from a personal injury matter that the attorney was also handling for the client. The committee answered affirmatively. However, the committee stated that the deal must be “fair and reasonable” to the client. Whether the transaction is fair and reasonable to the client is a fact-specific inquiry.
Additionally, the lawyer must also comply with Rule 1.8(a)’s disclosure and consultation provisions. The lawyer must ensure that the engagement letter in the criminal defense matter fully discloses the transaction in a manner that can be reasonably understood by the client. Further, the attorney must advise the client of the benefits of seeking independent legal counsel and give the client a reasonable opportunity to obtain the advise of such counsel.
Finally, the client must provide informed written consent to the terms of the transaction after the attorney has explained the material risks of the fee arrangement and has advised the client of reasonable alternatives to the fee arrangement. As long as the fee arrangement is fair and reasonable to the client and the attorney has complied with Rule 1.8(a), the lawyer may proceed with the transaction without facing potential ethics violations.
Find the full opinion here.
