Often attorneys request that their clients sign a promissory note with a confessed judgment provision to make it easier for the law firm to collect fees owed from clients. The promissory note states that the client will pay his or her outstanding balance over a period of time and, if the client default on the payments, the law firm can obtained a confessed judgment for the balance owed.
A client should never sign such a promissory note, because there is a preexisting contractual obligation for the client to pay the fees owed.
Rule 1.8(a) of the Maryland Lawyers’ Rules of Professional Conduct require that the attorney inform the client of the desirability of seeking independent counsel and to give the client a reasonable opportunity to seek independent counsel prior to executing a promissory note. Rule 1.8 also requires that the attorney provide the client with informed consent in the form of a writing signed by the client, even if the client chooses not to seek independent counsel.
When a client signs a promissory note while being represented by the attorney, this creates a financial relationship between the client and the attorney. Such a relationship is a prima facia violation of Rules 1.7(a) (prohibiting representation when an attorney has a personal conflict of interest with the client) and 1.8(a). See Atty. Griev. Comm’n v. Snyder, 368 Md. 242, 265 (2002); Atty. Griev. Comm’n v. Korotki, 318 Md. 646, 666 (1990) (“to sustain a transaction of advantage to himself with his client, the attorney has the burden of showing, not only that he used no undue influence, but that he gave his client all the information and advice which it would have been his duty to give if he himself had not been interested, and that the transaction was as beneficial to the client as it would have been had the client dealt with a stranger”). Indeed, “when attorney and client contract during their attorney-client relationship, ‘the law makes a presumption against the attorney and in favor the client’”. Id. (quoting Etzel v. Duncan, 112 Md. 346, 350-51 (1910)). “This rule is founded upon public policy, because the confidential and fiduciary relationship enables an attorney to exercise a very strong influence over his client and often affords him opportunities to obtain undue advantage by availing himself of the client’s necessities, credulity and liberality”. Hughes v. McDaniel, 202 Md. 626, 633 (1953).
