BARTERING FOR
BUSINESS From haircuts to paintings, how and what I bartered for my legal services By Elizabeth Blust
I
n the opening scene of the movie“To Kill a Mockingbird” — and in a later scene in the book by Harper Lee — client Walter Cunningham brings a bag of hickory nuts to lawyer Atticus Finch as payment for the latter’s help with the former’s entailment. Now that I am a lawyer myself, I understand not only what entailment is (and why, as young Scout Finch commiserates with Mr. Cunningham later, “entailments are bad” and take “a long time sometimes”, Ch. 15), but also the value of accepting barter as a means of payment for legal services. My first barter experience was with my first client. My long-time hairdresser and her husband had a property issue, so I helped them understand and protect their rights. They paid a cash deposit and we agreed that part of their remaining payment would be a few haircuts from her and some tomatoes and other produce from their garden. An unexpected frost killed off the tomatoes, but I ended up getting two haircuts, some other vegetables, and a check for $75. My second barter experience was not planned. A trust administration for a surviving spouse took much more of my time than either of us had anticipated, and the deceased spouse had died with a lot more debt than the surviving spouse knew about. I reminded my client that she had once mentioned that she did not know what to do with all her furniture, since she would be moving to a smaller place. We agreed, in 36 SAN DIEGO LAWYER May/June 2018
a written amendment to the representation agreement, to exchange furniture for a portion of my bill. A few of the pieces found immediate new life — I used her old dining table as my office desk for the next five years — but I will admit that a few were “mercy barters” that still bide their time in my garage.
$1,000.00, should help avoid questions of improper gifting (See CRPC 4-400 and Bus. & Prof. Code §6148).
Likewise, I doubt Atticus Finch needed all those hickory nuts.
One potential obstacle to bartering in certain circumstances is new Rule of Professional Conduct 1.15 (effective November 1, 2018), requiring advance fees to be held in trust, in most circumstances. What if the attorney needs plumbing services now and agrees to perform legal services for the plumber at a later date? Can a bartered service be held in a client trust account? Perhaps the written fee agreement could state that the barter income is an advanced flat fee for services, and that if the legal services are not
The California Rules of Professional Conduct do not specifically address barter, so attorneys must align their barter income with all of the rules regarding fees. As with cash compensation, the fee cannot be unconscionable and should be proportional to the value of the services performed. CRPC 4200. A written agreement clearly stating the barter terms, even for representation expected to incur expenses less than
All attorneys should avoid obtaining an interest in property that is adverse to the client’s interest unless the transaction is fair, the client understands that the interest is adverse, the agreement is in writing, and the client is advised in writing that he may have the agreement reviewed by an independent attorney. CRPC 3-300. In fact, this potential exists any time an attorney reserves the right to place a lien on the client’s property. Perhaps the most unusual form of bartering is obtaining title to property by foreclosing on a lien. Christin Winkler-Muñoz of San Diego Tax Group, LLC, says that appellate attorneys often include a lien against a car or house as a key part of the fee agreement. If the attorney ends up taking title to the property, that is a non-cash exchange for legal services — barter.