Attorney ethics are strict guidelines set by the ABA and many state bars that are created to protect the integrity of attorneys and their clients best interest. Though, the lines of these ethics aren’t always clear and a seemingly innocent situation can have consequences, up to disbarment.

It’s probably happened to many attorneys: upon receiving a holiday gift from a client, it crosses our minds – is this ethical? On the other end of the question is, is it ethical to give a gift to a client?

In the classic, beloved, attorney answer to both questions – it depends.

The ethical rules of receiving gifts

Let’s look at what the American Bar Association advises. Rule 1.8 of the ABA Model Rules of Professional Conduct, Paragraph (c), states that, “A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or another recipient of the gift is related to the client.”

The word “token” plays a substantial role in the meaning of Paragraph (c). Comment [6] states that “A lawyer may accept a gift from a client if the transaction meets general standards of fairness. For example, a simple gift such as a present given at a holiday or as a token of appreciation is permitted.”

Defining substantial

What about substantial gifts? And what exactly is the definition of a substantial gift?

In an article appearing in Bloomberg BNA, Joan Rogers writes about how model state New Hampshire clarifies the meaning of “substantial” and the issue of lawyers accepting gifts from clients. The New Hampshire Bar Association Ethics Committee also found guidance from Section 127(2) of the Restatement of (Third) of the Law Governing Lawyers (2000). The committee found that a gift giver’s financial situation regarding wealth factors in determining whether a gift is substantial.

The committee also looked to the Commentaries on the Model Rules of Professional Conduct (4th ed. 2006), by the American College of Trust and Estate Counsel for guidance. That publication suggested that “substantial” includes the financial situation of both the client and the attorney.

According to Paragraph (c), nothing prevents lawyers accepting gifts from clients, whether testamentary or that requires the attorney to prepare an instrument if the client is related to the attorney. “Related” includes “a spouse, child, grandchild, parent, grandparent or other relative or individual with whom the lawyer or the client maintains a close, familial relationship.”

Ethical implications of gift-giving

In the rules of attorney ethics, is it appropriate to give a client a gift? Rule 1.8 of the ABA Model Rules of Professional Conduct does not address gifts from an attorney to a client per se, but does state in Paragraph (e) that, “A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: (1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and (2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.”

Washington, another model state, reasoned that giving loans to clients may give an attorney too much stake in the outcome of litigation. This according to Washington Advisory Opinions 1959 and 1523.

As far as what could be construed as a financial gift from someone other than the client, Paragraph (f) of the ABA Model Rules of Professional Conduct states that “ A lawyer shall not accept compensation for representing a client from one other than the client unless: (1) the client gives informed consent; (2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and (3) information relating to representation of a client is protected as required by Rule 1.6.”

Conclusion on attorney ethics

Although – in general – an attorney is not barred from receiving or giving a holiday gift, to avoid possible awkward moment, it’s a good idea for the law firm to draw up a policy on gift-giving. Having a policy would give an attorney an “out” if a client chose to gift her with an overly expensive gift. It would also help draw boundaries for attorneys who choose to give a gift.

Make sure to check out “Small Law Firm Bonus Structures for this Holiday season” and “Holiday Marketing for Your Law Firm” for more information pertaining to this holiday season!