By Stephen Anderson

The Illinois Supreme Court Rules Committee will conduct a hearing Friday, Oct. 24, in Chicago to hear comment on proposed amendments to Rule 1.15 on Safekeeping Property, and Rule 1.8 on Conflict of Interest.

Also to be considered is a proposal from the Supreme Court Committee on Professional Responsibility for a new Rule 5.7 on Responsibilities Regarding Law-Related Services.

Two proposals for changes in Rule 1.15 are based on the Illinois Supreme Court’s 2007 ruling in Brian Dowling v. Chicago Options Associates Inc. et al. that for the first time recognizes the viability of advance payment retainers (226 Ill. 2d 277).

A proposal from the Committee on Professional Responsibility includes a paragraph (c) that requires fees paid in advance to be deposited in a client trust account, but “does not apply to a classic retainer, an advance payment retainer, or a fixed fee.”

Extensive amendments to the comment section refer to the Dowling opinion and iterate the court’s statement of a guiding principle in the choice of the type of retainer that “is the protection of the client’s interests.”

The Attorney Registration and Disciplinary Commission has proposed an alternate amendment to Rule 1.15 that spells out specifically the court’s list of factors that must be observed in any agreement between a lawyer and client regarding advance payment of fees.

The ARDC also has provided a summary of “New Standards for Retainers” based on the Dowling opinion. The ARDC emphasizes that an advance payment retainer agreement must be in writing, and its elements clearly disclosed to the client.

“The Dowling Court provided guidance to the profession in determining what types of retainers are appropriate,” the ARDC submitted. “The decision depends on the circumstances of each case.”

The ruling also noted that “advanced payment retainers should be used only sparingly, when necessary to accomplish some purpose for the client that cannot be accomplished by using a security retainer.”

The Rules Committee notice and agenda, and the texts of all proposals may be accessed at www.state.il.us/court/SupremeCourt/Public_Hearings/default.asp.

The Supreme Court Rules Committee will accept written comments until Friday, Oct. 10, c/o Administrative Office of the Illinois Courts, 13th floor, 222 N. LaSalle, Chicago 60601.

For additional information, call Paul Dismukes at (312) 793-7275.

Conflict of interest

The proposal by the Committee on Professional Responsibility to amend Rule 1.8 includes new language for paragraph (a) and subsequent subparagraphs, as follows:

“A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client” unless terms of acquiring the interest are fair and reasonable to the client, fully disclosed and transmitted in writing.

The client must be given an opportunity to seek advice from independent counsel, and must give informed consent in writing to the essential terms, “including whether the lawyer is representing the client in the transaction.”

Extensive comment includes a warning against “the possibility of overreaching” a relationship of trust and confidence between a lawyer and client.

The proposal for a new Rule 5.7 states, in (a), that “A lawyer shall be subject to the Rules of Professional Conduct with respect to the provision of law-related services.”

The term, as defined in (b), “denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.”

Attached comment states that the rule “applies to the provision of law-related services by a lawyer even when the lawyer does not provide any legal services to the person for whom the law-related services are performed and whether the law-related services are performed through a law firm or a separate entity.”