Gifts From Clients Aren’t Always Problem Free

Sometimes clients genuinely wish to say thanks, particularly during this time of year, and the giving of a gift can be a very appropriate and meaningful way for clients to do so. However, the interesting question is this. Does the acceptance of a gift from a client come with any risks? The answer is yes if the gift has any real monetary value. Here’s why.

ABA Model Rule 1.8 cautions against accepting substantial gifts from clients, deeming such gifts presumptively fraudulent in commentary to the rule. Unfortunately, lawyers are left to their own devices when it comes to determining what is and what isn’t a substantial gift. All I can say is that the specific circumstances will matter. Token gifts such as a thank-you note with a moderately priced gift certificate, bottle of wine, or tickets to a local event seem reasonable, as would a bouquet of flowers or food or treats intended to be shared with everyone in the office. Such gifts seem appropriate, because in most instances and depending upon the financial wherewithal of the client, they would not be considered substantial.

Another way to come at this problem might be to ask yourself if accepting the gift comes with strings, such as feeling that you now owe the client something, or fearing that the client will have expectations down the road. In short, if by accepting a gift, you feel your relationship with the client will change, then there’s a serious problem and I’d have you consider not accepting it.

Potential disciplinary trouble isn’t my only concern. What if a very wealthy client wanted to drop off a new car or pass along tickets for a two-week, all-expense paid overseas vacation for two? While the client may not view the gift as substantial, your partners often will. Now you’re having to deal with a dispute over ownership of the gift. You, as the receiving attorney, view the gift as a personal gift; but your partners view it as a gift to the firm due to all the work the firm has done for the client over the years. Firm break-ups can and do occur under such circumstances.

Finally, what happens if, after the gift was given, the attorney-client relationship sours? Again, if the gift was substantial, later on a court may view the gift as substantial enough that it should be considered part of the overall fee, potentially making the total fee unreasonable. Now we’re back into the world of discipline.

As I see it, gifts that have real monetary value aren’t worth the risk. Every commentator on this topic that I have read has come to the same conclusion. They all say the best course is to explain the ethical rules and gracefully decline the gift. When done well, your “thanks but I can’t accept” can even become a reassurance that the client’s matters are indeed in good hands, yours. That’s a win/win if you ask me!