UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 96-25
Do the Rules of Professional Conduct and/or other relevant rules or ethical considerations allow collection of a Note, including, if necessary, foreclosure of a Mortgage held as security for attorneys fees in a domestic case?
Summary:
There is no general ethical prohibition against collecting a fee by suing on a note, and foreclosing a mortgage, given to secure the fee. However, a lawyer may not obtain a security interest in property as long as that property is the subject matter of domestic litigation.
Opinion:
In domestic relations cases, Rule 1.5(d) prohibits only fees contingent upon the granting of a divorce, or the amount of alimony, support, or equitable division of property. The fees charged should, of course, be reasonable in light of the factors set forth in Rule 1.5(a).
In Advisory Opinion 81-01, it was opined that a lawyer could secure payment of his fee through taking a promissory note which included interest. Likewise, in Advisory Opinion 81-21, the use of civil process to enforce payment of a fee was implicitly endorsed. Accordingly, provided that the fee to be collected otherwise meets the requirements of Rule 1.5, use of civil process, such as suit on a note or foreclosure of a mortgage given as security for the fee generally is not prohibited by the Rules of Professional Conduct. However, in a domestic relations case, the ownership of marital property may be a subject of the litigation. A lawyer may not obtain a security interest in property as long as title to the property is a subject matter of litigation. Rule 1.8(j).