IMPORTANT NOTICE: This article is provided solely for research and archival purposes. MCLE self-study credit is no longer available. Even if you follow the instructions and submit payment you will not be granted MCLE self-study credit. Please note that low-cost MCLE is provided by the California Lawyers Association, pursuant to Business and Professions Code section 6056.

Answer the following questions after reading the article on attorneys' fees. Use the answer form provided to send the test, along with a $20 processing fee, to the State Bar. Please allow at least eight weeks for MCLE certificates to reach you in the mail.

1. California law absolutely prohibits business transactions between lawyer and an existing client.

2. Regulation of lawyer-client business transactions is derived solely from the Rules of Professional Conduct.

3. Rule 3-300, Rules of Professional Conduct, regulates only business transactions or pecuniary interests adverse to current, existing clients.

4. Entering into a business transaction with a sophisticated client obviates the need for strict compliance with rule 3-300, Rules of Professional Conduct.

5. If a lawyer acquires an interest in a client’s property with the intention of benefiting the client, strict compliance with rule 3-300 is not necessary.

6. The presumption of breach of fiduciary duty does not apply to contingency fee agreements executed at the inception of the lawyer-client relationship.

7. A lawyer may loan a needy client money to pay the funeral expenses of a minor child without advising the client in writing of the opportunity to seek the advice of independent counsel.

8. An attorney is permitted to borrow money, pursuant to an oral contract, from a client that she has represented for years.

9. A corporate lawyer may not sue his former corporate employer for wrongful termination without violating rule 3-300.

10. If a lawyer knows that her clients have invested in a publicly traded company, she is not permitted to purchase shares in the company on the same terms of a public offering because the lawyer will thereby engage in a business transaction with the clients.

11. A lawyer is permitted to receive an undisclosed finder’s fee for inducing his clients to engage in a business transaction of another client.

12. A lawyer who borrows money from a client may assert the privacy of information about her own financial situation.

13. A corporate client’s spontaneous gift of shares in the corporation in recognition of its lawyer’s extraordinary legal services may be accepted by the lawyer immediately and the gift need not be supported by any consideration.

14. A lawyer may be disciplined for his employee’s negligent failure to follow procedures in compliance with rule 3-300.

15. A lawyer may never acquire an interest in a client’s property which is adverse to the client.

16. A pecuniary interest adverse to a client includes a set of circumstances in which a lawyer can foresee that her acquisition is potentially detrimental to the client.

17. A lawyer’s use of a client’s credit cards to purchase clothes and family holiday gifts is de minimis and outside the scope of rule 3-300.

18. Use of confidential client information in competition with the client’s specialized business is an acquisition adverse to the client.

19. A lawyer need not advise a client to have a trust reviewed by another attorney where the lawyer creates a trust at the client’s request in which the lawyer may become a sole trustee and would then be authorized to borrow any sum of money from the trust on any terms without approval of any third party.

20. Acquiring a special power of attorney permitting the attorney to execute the client’s signature to litigation documents requires compliance with rule 3-300.

This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour, of which one hour will apply to legal ethics.

The State Bar of California certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.