A lawyer must protect funds he's holding for a client.

I represent a commercial client in several matters. I am also holding for that client monies in my escrow that I've recovered for the client, but the client has not asked me to distribute the monies yet. For some reason, my client has become upset with me and refuses to pay my legal fees on the unrelated other cases. Can I deduct that fee out of the other monies I am holding for the same client?

Although it seems like it would be perfectly reasonable if a client owes money and refuses to pay, to deduct it from other funds the lawyer is holding for the same client, it is really unreasonable and would be unethical. A lawyer has an obligation to hold a client's fund in an IOLTA account in the short run. If the funds are substantial, then the funds should be held for a longer period of time in an escrow-bearing interest account, see Rules of Professional Conduct 1.15. Therefore the lawyer correctly held the client's funds in the IOLTA and/or interest-bearing escrow account.

The fact that the lawyer is representing the same client in other unrelated matters does not in any way impact on the funds the lawyer is holding for the client. The lawyer cannot touch those funds without the client's permission. If the client demands distribution, then the lawyer must do so.

The fact that the client owes the lawyer monies on unrelated matters does not give the lawyer the right to just deduct those amounts from the unrelated monies the lawyer is holding for the same client. This is different from a situation where a lawyer recovers the cost and fee in a settlement. The lawyer then gets a one-third or 40 percent fee out of the client's money when it comes in. That's permissible since it was agreed upon in the contingent fee and the lawyer recovered the monies. But, it is a different situation when a lawyer is seeking to recover unpaid fees on an unrelated case for the same client.

Obviously there are ways to resolve these matters, such as fee dispute committees, mediation, etc. But, apparently, the client has a disagreement and now believes the lawyer hasn't earned the monies or has done something that should cause some of the fee to be remitted. Whether the client is right or wrong, the lawyer has no right to take the unrelated client's monies until there is a court order. Even then the lawyer would have to be very specific with the court if a judgement was awarded to get permission to execute on the unrelated monies the lawyer was holding for the client.

In essence, there is truly a conflict between the lawyer's interest and the client's interest. Although the lawyer may be right, and the client may be absolutely wrong and is just being pig-headed, about the situation, the lawyer can't put his interest above his client's. On the unrelated case, the lawyer is holding monies for the client as the lawyer is supposed to. The lawyer, under Rule 1.7 of the Rules of Professional Conduct, which is the general conflict of interest rule, cannot put his or her interest above the client's and take the monies on unrelated cases.

Obviously, this is frustrating. In this modern age of practicing law, clients can be difficult, particularly when it comes to payment. Clients will be a cheerleader as long as they don't have to pay any money. The second they have to pay, oftentimes a different client appears. If there are disputed funds held in an escrow account, the lawyer must leave the funds in the escrow account until the dispute is resolved, Rule 1.15. The fact that the lawyer is part of the dispute doesn't change that.

The bottom line is the lawyer has to protect funds the lawyer is holding for the client in the segregated IOLTA and/or interest-bearing accounts. The fact the lawyer is holding the funds doesn't give the lawyer the right to invade the funds for reimbursement on unrelated matters, even if it involves the same client.

Attorneys engaging in sexual harassment will not be tolerated.

With all the recent allegations of sexual harassement, improper touching, and/or just crude sexual comments, what would happen to a lawyer if they acted in that fashion?

Clearly, this type of conduct is absolutely and totally unacceptable for a member of the bar. The standards and ethics of the legal practice have evolved over the last 130 years when the first Code of Ethics was established by the state of Alabama for lawyers, and then the American Bar Association's initial Canons of Ethics was established in 1905. All of the ethical rules were written to provide the minimal standards of conduct for a person given the privilege to practice law. Being a professional is more than having an advanced degree or superior knowledge, being a professional is a way of life where one puts their client's interests above their own. It's a way of life that is done in a civil fashion and which does not demean or harass another person, whether it's a female, whether it's an employee, a male or a client, etc. The Rules of Professional Conduct all established the ethical background and basis to ensure that professionalism prevails.

The Rules of Professional Conduct were amended about eight or nine years ago to include a prohibition between having sexual relationships with clients. Rule 1.8 (j) was enacted that states the following: “A lawyer shall not have sexual relations with a client unless a consensual relationship existed between them when the client-lawyer relationship commenced.”

The comment to that rule helps to define a lawyer's relationship. Comment 17 notes the relationship between a lawyer and a client is a fiduciary one. It notes the unequal nature of the relationship and notes how a sexual relationship can “involve unfair exploitation of the trust of the client to the client's disadvantage.” Comment 17 also notes the danger of this relationship because of the lawyer's emotional involvement. It also notes that the lawyer's judgement may be impaired in terms of the exercise of the independent professional judgement needed. The comment also notes that the blurring of lines between professional and personal relationships makes it difficult to protect the client's interest and confidentiality.

But, bad or boorish or demeaning or harassing conduct to any person is not something any lawyer should engage in. Making suggestive comments to an employee, a client, to another lawyer or to court staff person, is just absolutely wrong and would undermine the dignity of the legal profession.

Lawyers have duties. Rules 5.1, 5.2 and 5.3 of the Rules of Professional Conduct deal with the responsibilities to both their professional employees and lay employees. A lawyer must properly supervise and ensure there is no sexual harassment. The days of lawyers allowing their personal issues or libido to justify mistreatment of clerks and/or staff are long over. The love them and leave them is from another era and severely discredited. Lawyers must respect their clients, staff and colleagues and set the example. To subject an employee or client to sexual suggestions or related conduct is no longer acceptable and never should've been acceptable.

Lawyers who continue to engage in improper sexual conduct or harassment will be subject to professional discipline, including substantial suspension.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pa. 19381.