Under Rule 1.8, when is a business transaction with a client permissible?

Under Rule 1.8, when is a business transaction with a client permissible?

• A. If the transaction is fair to the client, fully disclosed in writing, the client has reasonable opportunity for independent counsel, and informed consent is obtained.
• B. If the transaction is favorable to the lawyer regardless of disclosure.
• C. If the client signs automatically without independent counsel.
• D. If the client has no knowledge of the transaction.

Answer: (A)

Rule 1.8 allows a lawyer to enter into a business transaction with a client only if four safeguards are met: the terms must be fair and reasonable to the client, they must be fully disclosed in writing in a way the client can understand, the client must have a reasonable opportunity to seek independent legal counsel, and the client must give informed consent in writing. This structure protects the client’s autonomy and prevents exploitation when the lawyer has a financial interest in a matter. The described option fits all four requirements: the transaction is fair, it is fully disclosed in writing, the client is given a reasonable chance to consult with independent counsel, and the client provides informed written consent. If any one of these conditions isn’t met—if the arrangement isn’t fair, isn’t adequately disclosed, the client isn’t offered independent counsel, or the client hasn’t given informed consent—the transaction would violate the rule. Other options fail because they skip essential protections: favoring the lawyer without proper disclosure or consent, signing automatically without independent counsel, or having the client unaware of the transaction undermines informed consent and independence.

Rule 1.8 allows a lawyer to enter into a business transaction with a client only if four safeguards are met: the terms must be fair and reasonable to the client, they must be fully disclosed in writing in a way the client can understand, the client must have a reasonable opportunity to seek independent legal counsel, and the client must give informed consent in writing. This structure protects the client’s autonomy and prevents exploitation when the lawyer has a financial interest in a matter.

The described option fits all four requirements: the transaction is fair, it is fully disclosed in writing, the client is given a reasonable chance to consult with independent counsel, and the client provides informed written consent. If any one of these conditions isn’t met—if the arrangement isn’t fair, isn’t adequately disclosed, the client isn’t offered independent counsel, or the client hasn’t given informed consent—the transaction would violate the rule.

Other options fail because they skip essential protections: favoring the lawyer without proper disclosure or consent, signing automatically without independent counsel, or having the client unaware of the transaction undermines informed consent and independence.