CI-585

March 16, 1981

SYLLABUS

Absent a specific contractual undertaking to the contrary, a lawyer has no obligation to advance any costs on behalf of a client. The lawyer does have an ethical duty to advise the client that he or she will not advance costs and the consequences of such refusal upon the client's interest.

References: DR 5-103(B)

TEXT

Your letter addressed to the Committee on Professional Ethics has been referred to the undersigned for reply.

The facts of the situation facing you are that a client is delinquent in paying her legal fees as well as $125 in costs to be incurred by your firm to close a commercial real estate transaction in which it appears that your client is the buyer. You ask what steps should be taken in light of the fact that you have not recorded the Warranty Deed of the client nor paid the transfer taxes.

Absent a specific contractual undertaking to the contrary, an lawyer has no obligation to advance any costs on behalf of a client. DR 5-103(B) permits the advancement of costs "so long as the client remains ultimately reliable." The lawyer does have an ethical duty to advise the client that he or she will not advance costs and the consequences of such refusal upon the client's interest.

Although this letter is an opinion of the undersigned only, it has been circulated to all members of the Ethics Committee for their comments and approval prior to being sent to you.