A lawyer's lien means an attorney can take ownership of any property or money a client obtains in a case if the client hasn't made payments for legal services. This has to be established as a form of security deposit with two different liens generally applied. However, some states have questioned the ethical implications of a lawyer taking property or money from a client.
Charging Lien
This type of lien is typically used in action suits, says Tax Sales Secrets. It is applied when a client wins any money as part of a judgment in the lawsuit, yet the client refuses or can't pay for the services of the lawyer. In this instance, the lawyer will take a percentage of any money awarded. Sometimes the lawyer will impose a tax lien on any money before it is paid out. That way the lawyer can take a specified amount from the money before his client gets it so legal expenses can be paid.
Retaining Lien
While a charging lien applies to money, a retaining lien applies to property won in an action suit. If the client can't pay for legal services, Tax Sales Secrets says the lawyer has a right to take possession of the property won or some of the property until the lawyer is paid in full. In most cases, this lien is applied to divorce settlements where the awarding of real estate is involved.
Ethics of Liens in Vermont
Ethical implications of lawyer liens have been analyzed in various states. Vermont is one state that has formulated ethical guidelines toward lawyers imposing liens on their clients. Lawyers in Vermont can't impose liens if it impairs the client's interests or creates prejudice toward the client, according to Vtbar.org. At the same time, the Advisory Ethics Opinion says that lawyers have the right to obtain a fee for their services by using legally permissible liens.
Lawyer Lien Statute in Colorado
In Colorado, no common law exists for lawyer liens. Instead, Colorado goes by a state statute created in 2001. This statute gives the right of a lawyer to ethically impose a lien the moment that he decides to represent a client, says The Colorado Lawyer.
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