ETHICS DOCKET NO. 1988-36

MARYLAND STATE BAR ASSOCIATION, INC.

COMMITTEE ON ETHICS

ETHICS DOCKET NO. 1988-36

Fees: Securing Payment of Attorney’s Fee by Use of ""Consent to Judgment""

You have made three separate inquiries, all of which concern the issue of the use of a ""consent to judgment"" to collect a lawyer's fee. I have assumed that a ""consent to judgment"" is the same as a confessed judgment clause, which is a common clause in promissory notes of commercial lenders.

Your first inquiry concerns whether or not a lawyer may use a confessed judgment as a means of collection. Your second inquiry asks whether or not you can use a confessed judgment if you do not reduce a client's fee. Your third, and final, inquiry concerns whether or not an attorney may provide in ""his written fee agreement, that clients sign (along with the fee agreement) several 'consents to judgment' containing blanks,"" which the attorney would fill in from time to time when needed.

This Committee has entertained the issue of collection of attorney fees using confessed judgment clauses in promissory notes and concluded, in Ethics Docket 83-22, that the Code of Professional Responsibility, now entitled the Maryland Rules of Professional Conduct, imposes a duty of loyalty on lawyers to their clients. This duty requires a lawyer to insure that his client knowingly and voluntarily signs an instrument. Ethics Docket 83-22 discusses this knowing and voluntary decision.

The Committee understands that there may be federal and state requirements on the use of confessed judgment clauses. Therefore, the voluntary ad knowing decision of your client should include an explanation of the legal requirements of confessed judgment clauses as well.