Certified Legal Professional (CLP) Practice Exam

What is required before an attorney can enter into a business transaction with a client?

1. A) Assurance of market value

2. B) A written consent from the client

3. C) Verbal confirmation from a partner attorney

4. D) A competitive hourly rate agreement

The correct answer is: B) A written consent from the client

Before an attorney can enter into a business transaction with a client, it is essential that the attorney obtains a written consent from the client. This requirement ensures that the client fully understands the terms of the transaction and acknowledges any potential conflicts of interest that may arise. The formal written consent serves as a protective measure for both the attorney and the client, reinforcing ethical standards and maintaining transparency in their professional relationship. Obtaining written consent is aligned with legal ethics, which prioritize client protection and informed decision-making. It also helps create a clear record of the client's agreement, which can be useful in any future disputes or misunderstandings regarding the transaction. In many jurisdictions, this step is mandated by the rules governing professional conduct for attorneys. The other options, while they may seem relevant to business transactions, do not fulfill the ethical obligation required when a lawyer is engaging in business dealings with a client. For instance, assurance of market value does not ensure the client's understanding or approval of the transaction. Similarly, verbal confirmation from a partner attorney lacks the necessary formality and assurance that a written consent provides. A competitive hourly rate agreement relates more to service fees rather than the specific requirements for entering into a business transaction with a client.