N.M. R. Prof'l. Cond. 16-108

As amended through January 19, 2021
Rule 16-108 - Conflict of interest; current clients; specific rules
A.Business transactions with or adverse to client. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.
B.Use of information limited. A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these rules.
C.Client gifts. A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, grandparent or other relative or individual with whom the lawyer or the client maintains a close, familial relationship.
D.Literary or media rights. Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation.
E.Financial assistance. A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
(1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
F.Compensation from third party. A lawyer shall not accept compensation for representing a client from one other than the client unless:
(1) the client gives informed consent;
(2) there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required by Rule 16-106 NMRA of the Rules of Professional Conduct.
G.Representation of two or more clients. A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.
H.Prospective malpractice liability limitation. A lawyer shall not:
(1) make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless the client is independently represented in making the agreement; or
(2) settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
I.Proprietary interest in cause of action. A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:
(1) acquire a lien authorized by law to secure the lawyer's fee or expenses; and
(2) contract with a client for a reasonable contingent fee in a civil case.
J.Client-lawyer sexual relationships. A lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced.
K.Lawyer association. While lawyers are associated in a firm, a prohibition in the foregoing Paragraphs A through I that applies to any one of them shall apply to all of them.

N.M. R. Prof'l. Cond. 16-108

As amended by Supreme Court Order No. 08-8300-029, effective November 3, 2008; as amended by Supreme Court Order No. 16-8300-005, effective December 31, 2016.

Committee commentary. -

Business Transactions Between Client and Lawyer

[1] A lawyer's legal skill and training, together with the relationship of trust and confidence between lawyer and client, create the possibility of overreaching when the lawyer participates in a business, property, or financial transaction with a client, for example, a loan or sales transaction or a lawyer investment on behalf of a client. The requirements of Paragraph A must be met even when the transaction is not closely related to the subject matter of the representation, as when a lawyer drafting a will for a client learns that the client needs money for unrelated expenses and offers to make a loan to the client. The rule applies to lawyers engaged in the sale of goods or services related to the practice of law, for example, the sale of title insurance or investment services to existing clients of the lawyer's legal practice. See Rule 16-507 NMRA. It also applies to lawyers purchasing property from estates they represent. It does not apply to ordinary fee arrangements between client and lawyer, which are governed by Rule 16-105 NMRA, although its requirements must be met when the lawyer accepts an interest in the client's business or other non-monetary property as payment of all or part of a fee. In addition, the rule does not apply to standard commercial transactions between the lawyer and the client for products or services that the client generally markets to others, for example, banking or brokerage services, medical services, products manufactured or distributed by the client, and utilities' services. In such transactions, the lawyer has no advantage in dealing with the client, and the restrictions in Paragraph A are unnecessary and impracticable.

[2] Paragraph (A)(1) requires that the transaction itself be fair to the client and that its essential terms be communicated to the client, in writing, in a manner that can be reasonably understood. Paragraph (A)(2) requires that the client also be advised, in writing, of the desirability of seeking the advice of independent legal counsel. It also requires that the client be given a reasonable opportunity to obtain such advice. Paragraph (A)(3) requires that the lawyer obtain the client's informed consent, in a writing signed by the client, both to the essential terms of the transaction and to the lawyer's role. When necessary, the lawyer should discuss both the material risks of the proposed transaction, including any risk presented by the lawyer's involvement, and the existence of reasonably available alternatives, and should explain why the advice of independent legal counsel is desirable. See Rule 16-100(E) NMRA (definition of informed consent).

[3] The risk to a client is greatest when the client expects the lawyer to represent the client in the transaction itself or when the lawyer's financial interest otherwise poses a significant risk that the lawyer's representation of the client will be materially limited by the lawyer's financial interest in the transaction. Here the lawyer's role requires that the lawyer must comply, not only with the requirements of Paragraph A, but also with the requirements of Rule 16-107 NMRA. Under that rule, the lawyer must disclose the risks associated with the lawyer's dual role as both legal adviser and participant in the transaction, such as the risk that the lawyer will structure the transaction or give legal advice in a way that favors the lawyer's interests at the expense of the client. Moreover, the lawyer must obtain the client's informed consent. In some cases, the lawyer's interest may be such that Rule 16-107 NMRA will preclude the lawyer from seeking the client's consent to the transaction.

[4] If the client is independently represented in the transaction, Paragraph (A)(2) of this rule is inapplicable, and the Paragraph (A)(1) requirement for full disclosure is satisfied either by a written disclosure by the lawyer involved in the transaction or by the client's independent counsel. The fact that the client was independently represented in the transaction is relevant in determining whether the agreement was fair and reasonable to the client as Paragraph (A)(1) further requires.

Use of Information Related to Representation

[5] Use of information relating to the representation to the disadvantage of the client violates the lawyer's duty of loyalty. Paragraph B applies when the information is used to benefit either the lawyer or a third person, such as another client or business associate of the lawyer. For example, if a lawyer learns that a client intends to purchase and develop several parcels of land, the lawyer may not use that information to purchase one of the parcels in competition with the client or to recommend that another client make such a purchase. The rule does not prohibit uses that do not disadvantage the client. For example, a lawyer who learns a government agency's interpretation of trade legislation during the representation of one client may properly use that information to benefit other clients. Paragraph B prohibits disadvantageous use of client information unless the client gives informed consent, except as permitted or required by these rules. See Rules 16-102(D), 16-106, 16-109(C), 16-303, 16-401(B), 16-801, and 16-803 NMRA.

Gifts to Lawyers

[6] A lawyer may accept a gift from a client, if the transaction meets general standards of fairness. For example, a simple gift such as a present given at a holiday or as a token of appreciation is permitted. If a client offers the lawyer a more substantial gift, Paragraph C does not prohibit the lawyer from accepting it, although such a gift may be voidable by the client under the doctrine of undue influence, which treats client gifts as presumptively fraudulent. In any event, due to concerns about overreaching and imposition on clients, a lawyer may not suggest that a substantial gift be made to the lawyer or for the lawyer's benefit, except where the lawyer is related to the client as set forth in Paragraph C.

[7] If effectuation of a substantial gift requires preparing a legal instrument such as a will or conveyance the client should have the detached advice that another lawyer can provide. The sole exception to this rule is where the client is a relative of the donee.

[8] This rule does not prohibit a lawyer from seeking to have the lawyer or a partner or associate of the lawyer named as executor of the client's estate or to another potentially lucrative fiduciary position. Nevertheless, such appointments will be subject to the general conflict of interest provision in Rule 16-107 NMRA when there is a significant risk that the lawyer's interest in obtaining the appointment will materially limit the lawyer's independent professional judgment in advising the client concerning the choice of an executor or other fiduciary. In obtaining the client's informed consent to the conflict, the lawyer should advise the client concerning the nature and extent of the lawyer's financial interest in the appointment, as well as the availability of alternative candidates for the position.

Literary Rights

[9] An agreement by which a lawyer acquires literary or media rights concerning the conduct of the representation creates a conflict between the interests of the client and the personal interests of the lawyer. Measures suitable in the representation of the client may detract from the publication value of an account of the representation. Paragraph D does not prohibit a lawyer representing a client in a transaction concerning literary property from agreeing that the lawyer's fee shall consist of a share in ownership in the property, if the arrangement conforms to Rule 16-105 NMRA and Paragraphs A and I of this rule.

Financial Assistance

[10] Lawyers may not subsidize lawsuits or administrative proceedings brought on behalf of their clients, including making or guaranteeing loans to their clients for living expenses, because to do so would encourage clients to pursue lawsuits that might not otherwise be brought and because such assistance gives lawyers too great a financial stake in the litigation. These dangers do not warrant a prohibition on a lawyer lending a client court costs and litigation expenses, including the expenses of medical examination and the costs of obtaining and presenting evidence, because these advances are virtually indistinguishable from contingent fees and help ensure access to the courts. Similarly, an exception allowing lawyers representing indigent clients to pay court costs and litigation expenses regardless of whether these funds will be repaid is warranted.

Person Paying for a Lawyer's Services

[11] Lawyers are frequently asked to represent a client under circumstances in which a third person will compensate the lawyer, in whole or in part. The third person might be a relative or friend, an indemnitor (such as a liability insurance company) or a co-client (such as a corporation sued along with one or more of its employees). Because third-party payers frequently have interests that differ from those of the client, including interests in minimizing the amount spent on the representation and in learning how the representation is progressing, lawyers are prohibited from accepting or continuing such representations unless the lawyer determines that there will be no interference with the lawyer's independent professional judgment and there is informed consent from the client. See Rule 16-504(C) NMRA (prohibiting interference with a lawyer's professional judgment by one who recommends, employs, or pays the lawyer to render legal services for another).

[12] Sometimes, it will be sufficient for the lawyer to obtain the client's informed consent regarding the fact of the payment and the identity of the third-party payer. If, however, the fee arrangement creates a conflict of interest for the lawyer, then the lawyer must comply with Rule 16-107 NMRA. The lawyer must also conform to the requirements of Rule 16-106 NMRA concerning confidentiality. Under Rule 16-107(A) NMRA, a conflict of interest exists if there is significant risk that the lawyer's representation of the client will be materially limited by the lawyer's own interest in the fee arrangement or by the lawyer's responsibilities to the third-party payer (for example, when the third-party payer is a co-client). Under Rule 16-107(B) NMRA, the lawyer may accept or continue the representation with the informed consent of each affected client, unless the conflict is non-consentable under that paragraph. Under Rule 16-107(B) NMRA, the informed consent must be confirmed in writing.

Aggregate Settlements

[13] Differences in willingness to make or accept an offer of settlement are among the risks of common representation of multiple clients by a single lawyer. Under Rule 16-107 NMRA, this is one of the risks that should be discussed before undertaking the representation, as part of the process of obtaining the clients' informed consent. In addition, Rule 16-102(A) NMRA protects each client's right to have the final say in deciding whether to accept or reject an offer of settlement and in deciding whether to enter a guilty or nolo contendere plea in a criminal case. The rule stated in this paragraph is a corollary of both of those rules and provides that, before any settlement offer or plea bargain is made or accepted on behalf of multiple clients, the lawyer must inform each of them about all the material terms of the settlement, including what the other clients will receive or pay if the settlement or plea offer is accepted. See also Rule 16-100(E) NMRA (definition of informed consent). Lawyers representing a class of plaintiffs or defendants, or those proceeding derivatively, may not have a full client-lawyer relationship with each member of the class; nevertheless, such lawyers must comply with applicable rules regulating notification of class members and other procedural requirements designed to ensure adequate protection of the entire class.

Limiting Liability and Settling Malpractice Claims

[14] Agreements prospectively limiting a lawyer's liability for malpractice are prohibited unless the client is independently represented in making the agreement because they are likely to undermine competent and diligent representation. Also, many clients are unable to evaluate the desirability of making such an agreement before a dispute has arisen, particularly if they are then represented by the lawyer seeking the agreement. This paragraph does not, however, prohibit a lawyer from entering into an agreement with the client to arbitrate legal malpractice claims, provided the client is fully informed of the scope and effect of the agreement and gives informed consent. In this context informed consent requires the lawyer to, at a minimum, "inform [the] client that arbitration will constitute a waiver of important rights, including, the right to a jury trial, potentially the right to broad discovery, and the right to an appeal on the merits." Castillo v. Arrieta, 2016-NMCA-040, ¶ 23, 368 P.3d 1249. Nor does this paragraph limit the ability of lawyers to practice in the form of a limited-liability entity, where permitted by law, provided that each lawyer remains personally liable to the client for his or her own conduct and the firm complies with any conditions required by law, such as provisions requiring client notification or maintenance of adequate liability insurance. Nor does it prohibit an agreement in accordance with Rule 16-102 NMRA that defines the scope of the representation, although a definition of scope that makes the obligations of representation illusory will amount to an attempt to limit liability.

[15] Agreements settling a claim or a potential claim for malpractice are not prohibited by this rule. Nevertheless, in view of the danger that a lawyer will take unfair advantage of an unrepresented client or former client, the lawyer must first advise such a person in writing of the appropriateness of independent representation in connection with such a settlement. In addition, the lawyer must give the client or former client a reasonable opportunity to find and consult independent counsel.

Acquiring Proprietary Interest in Litigation

[16] Paragraph I states the traditional general rule that lawyers are prohibited from acquiring a proprietary interest in litigation. Like Paragraph E, the general rule has its basis in common law champerty and maintenance and is designed to avoid giving the lawyer too great an interest in the representation. In addition, when the lawyer acquires an ownership interest in the subject of the representation, it will be more difficult for a client to discharge the lawyer if the client so desires. The rule is subject to specific exceptions developed in decisional law and continued in these rules. The exception for certain advances of the costs of litigation is set forth in Paragraph E. In addition, Paragraph I sets forth exceptions for liens authorized by law to secure the lawyer's fees or expenses and contracts for reasonable contingent fees. The law of each jurisdiction determines which liens are authorized by law. These may include liens granted by statute, liens originating in common law, and liens acquired by contract with the client. When a lawyer acquires by contract a security interest in property other than that recovered through the lawyer's efforts in the litigation, such an acquisition is a business or financial transaction with a client and is governed by the requirements of Paragraph A. Contracts for contingent fees in civil cases are governed by Rule 16-105 NMRA.

Client-Lawyer Sexual Relationships

[17] The relationship between lawyer and client is a fiduciary one in which the lawyer occupies the highest position of trust and confidence. The relationship is almost always unequal; thus, a sexual relationship between lawyer and client can involve unfair exploitation of the lawyer's fiduciary role, in violation of the lawyer's basic ethical obligation not to use the trust of the client to the client's disadvantage. In addition, such a relationship presents a significant danger that, because of the lawyer's emotional involvement, the lawyer will be unable to represent the client without impairment of the exercise of independent professional judgment. Moreover, a blurred line between the professional and personal relationships may make it difficult to predict to what extent client confidences will be protected by the attorney-client evidentiary privilege, since client confidences are protected by privilege only when they are imparted in the context of the client-lawyer relationship. Because of the significant danger of harm to client interests and because the client's own emotional involvement renders it unlikely that the client could give adequate informed consent, this rule prohibits the lawyer from having sexual relations with a client regardless of whether the relationship is consensual and regardless of the absence of prejudice to the client.

[18] Sexual relationships that predate the client-lawyer relationship are not prohibited. Issues relating to the exploitation of the fiduciary relationship and client dependency are diminished when the sexual relationship existed prior to the commencement of the client-lawyer relationship. However, before proceeding with the representation in these circumstances, the lawyer should consider whether the lawyer's ability to represent the client will be materially limited by the relationship. See Rule 16-107(A)(2) NMRA.

[19] When the client is an organization, Paragraph J of this rule prohibits a lawyer for the organization (whether inside counsel or outside counsel) from having a sexual relationship with a constituent of the organization who supervises, directs, or regularly consults with that lawyer concerning the organization's legal matters.

Imputation of Prohibitions

[20] Under Paragraph K, a prohibition on conduct by an individual lawyer in Paragraphs A through I also applies to all lawyers associated in a firm with the personally prohibited lawyer. For example, one lawyer in a firm may not enter into a business transaction with a client of another member of the firm without complying with Paragraph A, even if the first lawyer is not personally involved in the representation of the client. The prohibition set forth in Paragraph J is personal and is not applied to associated lawyers.

[Adopted by Supreme Court Order No. 08-8300-029, effective November 3, 2008; as amended by Supreme Court Order No. 16-8300-005, effective December 31, 2016; as amended by Supreme Court Order No. 17-8300-018, effective December 31, 2017.]

.

ANNOTATIONS The 2017 amendment, approved by Supreme Court Order No. 17-8300-018, effective December 31, 2017, revised the committee commentary regarding a lawyer's duty to fully inform the client of the scope and effect of an agreement to arbitrate legal malpractice claims. The 2016 amendment, approved by Supreme Court Order No. 16-8300-005, effective December 31, 2016, prohibited a lawyer from having sexual relations with a client unless the sexual relationship predated the client-lawyer relationship, and revised the committee commentary; added a new Paragraph J and redesignated former Paragraph J as Paragraph K; in the committee commentary, added the section titled "Client-Lawyer Sexual Relationships", including Paragraphs 17 through 19, and redesignated former Paragraph 17 as Paragraph 20. The 2008 amendment, approved by Supreme Court Order No. 08-8300-029, effective November 3, 2008, in the title of the rule, changed the phrase "prohibited transactions" to "current clients; specific rules"; in Subparagraph (2) of Paragraph A, changed "the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction" to the current language; in Subparagraph (3) of Paragraph A, changed "the client consents in writing thereto" to the current language; in Paragraph B, deleted "Unless otherwise required by these rules, a" at the beginning of the sentence and changed "consents after consultation" to "gives informed consent, except as permitted or required by these rules"; in Paragraph C, replaced the former language of the rule which prohibited a lawyer from preparing an instrument which would give the lawyer or a person related to the lawyer a gift from a client by the current language; in Subparagraph (1) of Paragraph E, changed "provided the client remain ultimately liable for such costs and expense" to "the repayment of which may be contingent on the outcome of the matter"; in Subparagraph (1) of Paragraph F, changed "consents after consultation" to "gives informed consent"; in Paragraph G, changed "consents after consultation, including" to "gives informed consent, in writing signed by the client. The lawyer's"; in Subparagraph (1) of Paragraph H, changed "permitted by law" to "the client"; in Subparagraph (2) of Paragraph H, changed "settle a claim for which liability" to "settle a claim or potential claim for such liability" and changed "without first advising that person in writing that independent representation is appropriate" to the current language which prohibits a settlement unless the person is advised in writing of the desirability of seeking independent legal advice; deleted former Paragraph I which prohibited representation adverse to the representation by a related lawyer; relettered former Paragraph J as Paragraph I; and added a new Paragraph J. Relation of attorney and client is one of highest trust and confidence, requiring the attorney to observe the utmost good faith towards his client, and not to allow his private interests to conflict with those of his client. Very strict and rigid rules have always been enforced under which an attorney could not maintain a purchase from his client unless he was able to clearly show that he had made a full communication to his client of all that he knew of advantage to the client regarding the subject of the negotiations. Van Orman v. Nelson, 1967-NMSC-069, 78 N.M. 11, 427 P.2d 896, rev'd on other grounds, 1969-NMSC-035, 80 N.M. 119, 452 P.2d 188. Information which attorney must convey to client. - An attorney has an affirmative duty to fully inform a client, not only of the attorney's interest in the transaction, but also how such interest might affect the attorney's personal judgment and that the client is free to seek outside legal advice regarding the transaction. In re D'Angelo, 1986-NMSC-052, 105 N.M. 391, 733 P.2d 360. Duty no less than real estate broker. - The duty owed by an attorney to his client is certainly no less exacting than that owed by a real estate broker to his principal. Van Orman v. Nelson, 1969-NMSC-035, 78 N.M. 11, 427 P.2d 896, rev'd on other grounds, 1969-NMSC-035, 80 N.M. 119, 452 P.2d 188. Property ownership between clients and attorney. - If the attorney had an interest in a client corporation and its real property, he violated this rule by failing to comply with the requirements for entering into a business transaction with a client since he failed to obtain the client's written consent to the alleged transaction. Of a more serious nature was the action taken by the attorney when he learned the property had been placed for sale since he resorted to issuing false and unauthorized deeds to protect an asserted interest in a client's property which is antithetical to a lawyer's duties to the client and the legal system. In re Schmidt, 118 N.M. 213, 880 P.2d 310 (1994). Attorneys must minimize any potential conflict of interest. - Where attorney accepted a flat fee from a client in the form of real property, the attorney violated Rule 16-108(A) NMRA by agreeing to accept the client's property without advising the client to seek independent counsel, without obtaining the client's informed consent, or without ensuring that the terms of the transaction were fair and reasonable to the client, because Rule 16-108 NMRA was promulgated to ensure that transactions between clients and attorneys remain fair and reasonable and to ensure that attorneys do not exercise an unfair advantage over their clients. In re Montclare, 2016-NMSC-023. Advances from attorney's own funds. - If costs are advanced, the advance must come from the attorney's own funds; and where an attorney who advanced funds from a trust account in which the attorney had commingled personal and clients trust was saved from disbursing funds that belonged to other clients, it was not proper for him to make advances from the fund. In re Cannain, 1997-NMSC-001, 122 N.M. 710, 930 P.2d 1162. No conflict with statute. - The statute which makes an attorney joinly liable with the client for the services of a court reporter (36-2-13.1 NMSA 1978) does not conflict with Subparagraph E(1) of this rule. Trambley v. Wyman, 1998-NMCA-035, 125 N.M. 13, 956 P.2d 144, cert. denied, 124 N.M. 589, 953 P.2d 1087 (1998). Contracts between client and attorney will be closely scrutinized by the courts and when a client challenges the fairness of such a contract the attorney has the burden of showing not only that he used no undue influence but that in every particular he acted honestly and in good faith. Van Orman v. Nelson, 1967-NMSC-069, 78 N.M. 11, 427 P.2d 896, rev'd on other grounds, 1969-NMSC-035, 80 N.M. 119, 452 P.2d 188. Factors in determining fairness. - Inadequacy of consideration is but one factor in determining whether a transaction between attorney and client is fair; others include a showing that the attorney made a full and frank disclosure of all relevant information that he had and that the client had independent advice before completing the transaction. Van Orman v. Nelson, 1967-NMSC-069, 78 N.M. 11, 427 P.2d 896, rev'd on other grounds, 1969-NMSC-035, 80 N.M. 119, 452 P.2d 188. Agreement voidable. - The trial court's conclusion that an agreement was voidable may clearly be sustained upon the ground that the attorney failed to fully disclose all facts relating to the sale of the house which he was consummating, particularly with respect to the purchase price; furthermore, the client had no independent advice before signing the agreement and deed. Van Orman v. Nelson, 1967-NMSC-069, 78 N.M. 11, 427 P.2d 896, rev'd on other grounds, 1969-NMSC-035, 80 N.M. 119, 452 P.2d 188. If the court finds that the transactions between the attorney and his client were not made in the best of faith and were not made without an advantage to the attorney or disadvantage to his client, that said transactions were not fair and not equitable and the client was not fully informed of her rights and interests, the attorney's actions are incompatible with the high fidelity he owed to his client as a member of the legal profession. Van Orman v. Nelson, 1967-NMSC-069, 78 N.M. 11, 427 P.2d 896, rev'd on other grounds, 1969-NMSC-035, 80 N.M. 119, 452 P.2d 188. Exchange of service agreement not standard commercial transaction. - An attorney was required to disclose in writing the terms of an arrangement with his client, whereby the attorney received construction work from the client at a reduced rate and his payments were often deferred, since the agreement was not a standard commercial transaction excepted from this rule. Fowler Bros. v. Young, 91 F.3d 1367 (10th Cir. 1996). Constitutional rights violation requires "actual" conflict. - A conflict of interest violation of these rules will not in itself constitute a violation of constitutional rights because under case law an "actual" conflict must be established. United States v. Gallegos, 39 F.3d 276 (10th Cir. 1994). Disclosure provision of this rule does not place an attorney in the position of a trustee. Fowler Bros. v. Young, 91 F.3d 1367 (10th Cir. 1996). Disbarment warranted. - Disbarment was justified because of the inadequacy of an attorney's representation of clients in violation of Rules 16-101, 16-102(A), 16-103 and 16-104(A) NMRA, by his business transaction and trust account violations of this rule and Rules 16-115 and 16-116(D) NMRA, and violations of Rule 16-801 NMRA and other rules relating to disciplinary proceedings. In re Darnell, 1997-NMSC-025, 123 N.M. 323, 940 P.2d 171. Contingency arrangement. - Attorney who took case on a contingency arrangement was sanctioned for fees and costs in the amount of $26,769.80 for failing to settle a case at the request of the client or withdraw as attorney in the case. Vesco v. Snedecker, 236 F. Supp. 2d 1272 (D.N.M. 2002 ). Law reviews. - For article, "Ethics and the Settlement of Civil Rights Cases: Can Attorneys Keep Their Virtue and Their Fees?", see 16 N.M.L. Rev. 283 (1986). Am. Jur. 2d, A.L.R. and C.J.S. references. - 7 Am. Jur. 2d Attorneys at Law §§ 121, 199, 200, 263. Fee collection practices as ground for disciplinary action, 91 A.L.R.3d 583. Liability insurance coverage as extending to liability for punitive or exemplary damages, 16 A.L.R.4th 11. Propriety of attorney acting as both counsel and class member or representative, 37 A.L.R.4th 751. Liability of professional corporation of lawyers, or individual members thereof, for malpractice or other tort of another member, 39 A.L.R.4th 556. Liability of attorney, acting for client, for malicious prosecution, 46 A.L.R.4th 249. Attorney's assertion of retaining lien as violation of ethical code or rules governing professional conduct, 69 A.L.R.4th 974. Attorney's retaining lien: what items of client's property or funds are not subject to lien, 70 A.L.R.4th 827. 7 C.J.S. Attorney and Client §§ 77 to 87.