February 08, 2016 Top Story

Doing Business with Clients Could Result in No Legal Fees

Agreement with client for interest in patent in lieu of legal fees violates ethics rule

Kelso L. Anderson

Attorneys who enter into business transactions with their clients for legal representation in lieu of attorney fees are ethically obligated to advise their clients to seek independent counsel to assess a transaction’s propriety. Otherwise, attorneys risk losing any remuneration emanating from the business transaction. Priest v. Coch et al. ABA Section of Litigation leaders believe Priest serves as a prophetic reminder to litigators to follow all ethics rules when engaging in business with clients.

Initial Agreement and Representation

The plaintiff in Priest was Law Offices of Peter H. Priest, a North Carolina law firm specializing in patent law. Starting in 2004, attorney Priest and his firm represented the defendants, Gabriel Coch and Information Patterns, LLC (IP), in the filing and prosecution of a patent for a computer program for geo-collaboration and Internet-based mapping. Coch and two partners founded IP to develop the program. In 2005, Priest’s firm filed a formal patent application for the program with the United States Patent and Trademark Office (USPTO).

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