Under Model Rule 1.8(a), may a lawyer engage in a business transaction with a client?

• A. Yes, but the terms must be fair and the client must give informed consent after full disclosure.
• B. Yes, without any disclosure.
• C. No, never.
• D. Only if the client is a business partner.

Answer: (A)

A lawyer may enter into a business transaction with a client only if safeguards are in place to protect the client from conflicts of interest. Under Model Rule 1.8(a), the terms must be fair and fully disclosed in writing in a manner the client can understand; the client must be advised in writing to seek independent legal counsel in connection with the transaction; and the client must give informed consent in writing to the essential terms of the transaction. This combination ensures the client understands the deal, isn’t pressured, and has an opportunity to obtain objective advice.

So the correct answer is that yes, it’s permitted, but only when those protections are satisfied. If there’s no disclosure, no informed consent, or no opportunity to consult independent counsel, the transaction would be improper. The notion is not limited to relationships like business partnerships; the rule applies broadly to prevent exploitation of the client.