- 63 -
F.2d 119 (5th Cir. 1959).38 Although the narrow ground issue need
not detain us indefinitely, a few observations are in order.
Respondent argues that Wisconsin ethical rules prohibit an
attorney from acquiring a "proprietary interest" in a cause of
action he is pursuing for his client. See Wis. Sup. Ct. R.
20:1.8(j) (1998). That rule actually states, however, that "A
lawyer shall not acquire a proprietary interest * * * except that
the lawyer may: (1) acquire a lien granted 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." Id. (Emphasis
added.) Therefore, the rule clearly permits an attorney to
acquire the interests in his client's cause of action
contemplated by the Wisconsin attorney’s lien laws; it also
suggests that those interests are proprietary interests.
38 See Smelker v. Chicago & N. W. Ry., 81 N.W. 994, 994
(Wis. 1900), which quoted the Wisconsin attorney’s lien statute
as originally enacted in 1891. Although Smelker is an old case,
diligent research has not disclosed any authority reversing it or
declaring it obsolete. It is cited and summarized as standing
for the propositions described in the text in 146 A.L.R. 67, 69
(1943) (“ANNOTATION. Merits of client’s cause of action or
counterclaim as affecting attorney’s lien or claim for his
compensation against adverse party, in case of compromise without
attorney’s consent”) and 7 Am. Jur. 2d, Attorneys at Law, sec.
323 (1997) (“Right to continue action client has settled”). Our
opinions distinguishing the decision of the Court of Appeals in
Cotnam v. Commissioner, supra, on the basis of differences in
State law have relied on Pennsylvania cases from 1852 and 1919,
and on Texas cases from 1913 and 1920. See Estate of Gadlow v.
Commissioner, 50 T.C. 975, 980 (1968) (distinguishing
Pennsylvania law); Srivastava v. Commissioner, T.C. Memo. 1998-
362 (Texas law).
Page: Previous 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 NextLast modified: May 25, 2011