Pity the poor lawyer who fails to work against a large retainer. That would be most of us. While large amounts in the trust account remains the best guarantee against "surprise pro bono" representation, few clients have the wherewithal to fully pay in advance the cost of litigation or large transactional matters. Those clients who can are usually too sophisticated to do so. So what is an attorney who finds himself with a sizable account receivable and a client who has stopped paying to do?
The very first thing is to carefully review the client's fee agreement. This will either be a source of reassurance and cause for self-congratulation, or a source of anxiety and cause for self-flagellation, particularly if there is no signed fee agreement. Particularly for attorneys working on a contingency basis, scrutiny of the fee agreement is critical, for in Colorado, if the agreement does not provide for the specific contingency of the attorney's voluntary withdrawal, such withdrawal will likely preclude recovery of any fee, even one based on quantum meruit. See Elliott v. Joyce, 889 P.2d 43 (Colo. 1994). See generally, Luce, Quantum Meruit!: The Rights of the Discharged Contingent Fee Lawyer, and Luce, Attorneys' Fee Disputes: Will Your Fee Agreement Hold Up?. A contingency fee lawyer in this situation must calculate and compare (1) the cost of seeing the representation through to completion, the probability of recovery and the likely amount of any judgment or settlement, against (2) the time invested to date and the likelihood the judgment will be collectable.
Next, the attorney should consider whether there is any meaningful security for payment of fees. This requires understanding and analysis of the two forms of security available to Colorado lawyers: the retaining lien and the charging lien. It is alarming, but not surprising, how many attorneys who can grasp the subtleties and nuances of Article 9 of the Uniform Commercial Code do not even know where to look to find the limited security rights available to lawyers. Unaltered since 1903, the Colorado attorney's lien statutes are indeed somewhat of a dark mystery, a painful example of both poor legislative drafting and of how attorneys are perhaps the least effective of all professions at collectively protecting their own business interests. The purpose of this article is to expose the mystery of attorney's liens to the bright light of analysis, and to assist Colorado lawyers in making sense, and occasionally dollars, of these ancient riddles. A solid understanding of these statutes is essential, not simply for protection of the attorney's financial health, but also for protection of one's professional license. The invalid assertion of an attorney's lien is grounds for professional discipline. See People v. Brown, 840 P.2d 1085, 1088 (Colo. 1992) (improper assertion of retaining lien violated DR 1-102(A)(5)); People v. Smith, 830 P.2d 1003, 1005 (Colo. 1992) (unauthorized recordation of charging lien and subsequent failure to release violated DR 1-102(A)(5)).
Where to Look
The Colorado attorney's lien statutes are codified at §§ 12-5-119 and -120, C.R.S. (hereafter, "Section 119" and "Section 120"). These statutes preempt any common law attorney's lien in Colorado. Fillmore v. Wells, 10 Colo. 228, 15 P. 343 (1887); Donaldson, Hoffman & Goldstein v. Gaudio, 260 F.2d 33 n.1 (10th Cir. 1958). The statutes create two classes of attorney's liens:
[a] general, retaining or possessory lien, and a special, particular, or charging lien. The former attaches to all papers, books, documents, securities, and money coming into an attorney's possession in the course of his professional employment. The attorney has a right to retain them in his possession until the general balance due for legal services is paid, whether such services grew out of the special matters then in his hands, or other legal matters. The right to the special, particular, or charging lien, on the other hand, rests, not on possession, but on the equity of an attorney to be paid his fees and disbursements out of the judgment obtained as a result of his skill and service. . . . There is a clear distinction between the two classes of liens. It is said that a failure to distinguish between them has led to confusion, not to say conflict, in the decisions.
Collins v. Thuringer, 92 Colo. 433, 21 P.2d 709, 710 (1933). Although the Colorado statutes preserve the two classes of attorney's liens recognized at common law, the classes are not cleanly divided between Sections 119 and 120; as discussed below, elements of each class of liens can be found in both statutes. As the Colorado Supreme Court observed in classic understatement, "[t]he provisions concerning the two classes of liens are not so clearly separated as might be desired . . . ." Collins, 21 P.2d at 710. Although the language of the statutes, of course, should not be ignored, a clear grasp of the differences, uses, and limitations of the two classes of liens is more readily obtained from the case law interpreting them.
Generally speaking, a retaining lien is a possessory lien, exercised by an attorney over things "which have come into his possession in the course of his professional employment," Section 120, or which are "in [his] hands," Section 119. The retaining lien is perfected by possession; no notice is required. More importantly, the retaining lien allows cross-collateralization, i.e., property subject to the lien may be retained until the attorney has been paid in full for all legal work done; the lien is not lost simply because the attorney has been fully paid regarding the matter to which the retained property pertains. The retaining lien exists "until the general balance due . . . for legal services is paid, whether such services grew out of the special matters then in his hands, or other legal matters." Collins, 21 P.2d at 710; In re Estate of Benney, 790 P.2d 319, 322 (Colo. 1990) (quoting Collins).
One Retaining Lien Statute or Two?
Section 120 describes the retaining lien as applying to "any papers of his client." While Section 120 unquestionably creates a retaining lien, In re Estate of Benney, 790 P.2d at 322, the first clause of Section 119 also creates "a lien on any money, property, choses in action, or claims and demands in [the attorney's] hands" (emphasis added). The lien created by this language is unmistakably in the nature of a retaining lien, i.e., it describes a lien created and perfected by possession. Further, Colorado courts have consistently construed the retaining lien as extending to "all papers, books, securities and money coming into an attorney's possession in the course of his professional employment." Jenkins v. Weinshienk, 670 F.2d 915, 919 (10th Cir. 1982) (quoting Collins, 21 P.2d at 710). Is this a tacit recognition that this first clause of Section 119 also creates a retaining lien, or merely an expansive reading of the word "papers" in Section 120? A related question is: "does the possessory lien defined in Section 119 have the cross-collateralization effect of a true retaining lien, or is the lien available only to the extent of the value of services provided in a particular matter?" The answer to these questions can be found in In re Estate of Benney, supra. There, the court observed:
The statutory text [of Section 119] also provides for a charging lien when the client's money, property, claim or chose in action comes into the hands of the attorney rendering legal services to the client."
790 P.2d at 322 (emphasis added). Thus, the lien created by the first clause of Section 119 is a hybrid: a possessory charging lien, perfected by possession, but limited in scope to fees relating to a particular matter.
Subject Matter of the Retaining Lien
Despite the oft repeated language of Collins -- that a retaining lien "attaches to all papers, books, documents, securities, and money coming into an attorney's possession in the course of his professional employment," 21 P.2d at 710 -- two recent cases raise some question as to whether, 65 years after Collins was decided, the Colorado Supreme Court is willing to read Section 120 quite so broadly.
In People v. Brown, 840 P.2d 1085 (Colo. 1992), succumbing to the virtue of not deciding more than it needed to, the Colorado Supreme Court discussed, but avoided deciding, the issue of the scope of a retaining lien. There, attorney-respondent Brown asserted a retaining lien on third-party documents he had borrowed for use in his client's trial, contrary to assurances Brown had made to the owners that their documents would be promptly returned. Id. at 1086. The court correctly held that, because Brown had waived any retaining lien that might have been asserted in the third-party documents, it need not address the scope of the retaining lien. Id. at 1088. In a lengthy footnote, however, the court suggested that its prior pronouncements regarding the scope of the retaining lien might be too broad:
We thus find it unnecessary to delineate the precise scope of the retaining lien or to determine which items coming into an attorney's possession are not subject to the lien.
. . . We acknowledge, however, that in a few cases that did not turn on the scope of the retaining lien we have used language to describe the lien that was broader than the statutory language. E.g., Collins v. Thuringer, 92 Colo. 433, 437, 21 P.2d 709, 710 (1933); see also Jenkins v. Weinshienk, 670 F.2d 915, 919 (10th Cir. 1982) (quoting language from Collins).
840 P.2d 1088 n.2.
One year later, in People v. Mills, 861 P.2d 708 (Colo. 1993), the court left undisturbed a Grievance Committee Hearing Panel's finding that, although the attorney-respondent could not assert a charging lien on the entire amount held by him for estate distributions (because it exceeded the amount due for services related to the estate), he could reasonably believe he was entitled to assert a retaining lien on that amount. The court twice noted, however, that, understandably, the complainant did not contest these conclusions, id. at 710, leaving open again the question of whether the court might have narrowed the scope of the retaining lien had it been given the procedural opportunity to do so.
Accordingly, whether the breadth of Collins' pronouncements regarding the scope of the retaining lien will be constricted in the future remains uncertain. All that is certain is that the Colorado Supreme Court has made it clear it may do so, given the right case.
A retaining lien may only be asserted against property which has come into the attorney's "possession in the course of his professional employment." Thus, property held by an attorney in some other capacity, e.g., as a trustee or escrow agent, is not subject to a retaining lien. See People v. Brown, 840 P.2d 1088 n.2 (observing that other courts have concluded that property delivered to an attorney for a special purpose is not subject to the retaining lien). Nor does the lien extend to property which the attorney may have received in the course of professional employment, from one other than the "client." See id. (observing that Oregon, construing a similar retaining lien statute, has held that third parties' papers are not "papers of his client").
A Coercive, But Passive, Cross-Collateralization Lien
Where applicable, the retaining lien confers a right upon the attorney to retain possession of the property until all amounts owing to the attorney on any matter have been paid in full. The retaining lien is a "coercive" lien in the sense that, if valuable property which cannot be easily or cheaply replaced has come into the attorney's possession during the course of professional employment, the attorney is in a position to exercise considerable leverage in seeking payment of fees. At the same time, the retaining lien is "passive," insofar as the attorney has the right to retain subject property, but no right to foreclose upon it. In Re Oiltech, 38 B.R. at 487 n.4 (citing Browy v. Brannon, 527 F.2d 799 (7th Cir. 1976) (construing Illinois retaining lien)). Thus, for example, 1,000,000 shares of Microsoft stock subject to a retaining lien in the hands of Netscape's lawyers may be relatively worthless, since Microsoft may be all too willing to cancel the outstanding certificate and reissue a new certificate directly to its shareholder at little or no cost. On the other hand, an irreplaceable heirloom or unique documents necessary to establish a claim or defense may provide the retaining lawyer with considerable leverage.
In Jenkins(1) v. Weinshienk, supra, the Tenth Circuit both recognized and endorsed the coercive effect of the Colorado retaining lien. There, attorney Jenkins' client sought to compel the delivery of certain documents in Jenkins' file necessary to prove his case. The trial court entered an order conditioning Jenkins' motion to withdraw upon his delivering his files to his client's substitute counsel or permitting substitute counsel to inspect and copy the files. 670 F.2d at 917. These orders were later amended to require the client to post a $3,500 bond to secure the attorney's lien claim for fees due in the ongoing case. The court rejected, however, Jenkins' request for a larger bond covering unpaid amounts for legal work performed on other matters. Id. Thereafter, Jenkins filed petitions for writs of mandamus and prohibition seeking vacatur of Judge Weinshienk's orders. In granting the requested relief, the Tenth Circuit cogently observed:
Jenkins' assertion of the retaining lien has clearly inconvenienced [his clients] in the [district court] case. If they do not settle with him, pay up, or file an adequate bond, they may have to duplicate his work, and they may miss some defense or valid claim within Jenkins' knowledge. But that is the essence -- the power and the bite -- of the attorney's retaining lien. If we were to hold the lien must give way because it hampers the clients' defense of their suit, we would emasculate the retaining lien as it applies to general balances owed attorneys.
670 F.2d at 920 (emphasis added). The Tenth Circuit held that the trial court must either respect Jenkins' retaining lien, or require his client to post a bond large enough to protect Jenkins' claim for outstanding fees in all matters. Id.
Retaining Lien Limitations and Waivers
While regularly given their due weight, retaining liens are subject to several limitations and exceptions.
First, as the Tenth Circuit held in Jenkins, the posting of adequate substitute collateral may convince a court to release the retaining lien. Second, it settled that an attorney may waive the right to assert a retaining lien. See People v. Brown, 840 P.2d at 1088; People ex rel. MacFarlane, 581 P.2d at 718 ; In re Marriage of Rosenberg, 690 P.2d at 1295. A limited, constructive waiver of the retaining lien occurs when an attorney asserts a claim or counterclaim for fees owed against a client. Such a claim acts as a forfeiture "to exclusive possession of his client's papers relevant to the fee dispute. . . ." Jenkins, 676 P.2d at 1204.
The retaining lien may yield in a variety of other situations, e.g., where papers are essential to the defense of a criminal charge, where the attorney asserting the lien has engaged in misconduct, where the attorney has withdrawn without just cause or reasonable notice, or where a client is unable, rather than unwilling, to pay or post a bond. See Jenkins, 676 P.2d at 1204 n.3 and Jenkins, 670 F.2d at 919-20. See also People ex rel. MacFarlane, 581 P.2d at 718 (discharge or removal for professional misconduct bars assertion of retaining lien regarding property related to matter in which the misconduct occurred only; however, suspension or disbarment bars assertion of retaining lien in all matters in which attorney was engaged); People v. Radinsky, 512 P.2d 627 (Colo. 1973) (suggesting that assertion of retaining lien in a contingency fee matter prior to the completion of the contingency is improper, except, perhaps, to the extent of the quantum meruit value of services rendered). See generally, Colo. Bar Ass'n Opinion 82, Assertion of Attorney's Retaining Lien on Client's Papers (April 15, 1989).
Although the client's inability to pay may be grounds for relief from the effect of a retaining lien, the mere filing of bankruptcy is not. See In Re Life Imaging Corp., 31 B.R. 101, 102 (Bkrptcy. D. Colo. 1983) (attorney's lien valid under state law not extinguished by filing of bankruptcy, but court may order delivery of files contingent upon posting security equal to decrease in value of lien). Accord In Re Oiltech, 38 B.R. at 489 (recognizing "the problematic task of valuing an attorney's lien and adequately protecting it" in determining the adequacy of substitute collateral).
Retaining Lien Mechanics
Because the retaining lien is perfected by possession, no other notice is necessary or required. In Re Oiltech, Inc. v. Nelson & Harding, 38 B.R. 484, 486 (Bkrptcy. Nev. 1984) (construing the Colorado attorney's lien statutes). The lien does not attach until the attorney has completed some compensable work, id. (quoting People ex rel. MacFarlane v. Harthun, 195 Colo. 38, 581 P.2d 716, 718 (1978); In re Printcrafters, Inc., 208 B.R. 968 (Bkrptcy. D. Colo. 1997) (retaining lien is not prospective and does not attach until the attorney has completed some compensable work). However, it is not necessary to determine the amount of fees owing to an attorney to determine the validity of the retaining lien. Jenkins v. Weinshienk, 670 F.2d at 919. Both retaining and charging liens are equitable in nature. Accordingly there is no right to a jury in an action to determine their validity. See In re Marriage of Rosenberg, 690 P.2d 1293 (Colo. App. 1984) (construing the nature of attorney's lien statutes generally in adjudication of an asserted charging lien).
Section 120's Quasi Retaining Lien
Before leaving the subject of retaining liens, special note of the second clause of Section 120 should be made. This provision extends a retaining lien to "money due to [the lawyer's] clients in the hands of an adverse party in an action or proceeding in which the attorney was employed from the time of giving notice of the lien to that party." Although the Colorado Supreme Court has characterized this clause as a retaining lien, in In re Estate of Benney, 790 P.2d at 322, it resembles a charging lien, much in the same way the first clause of Section 119, discussed above, resembles a retaining lien.
First, by its terms, it is non-possessory. Second, it is perfected only upon giving notice to the adverse party. Third, it requires the existence of "an action or proceeding" which, as discussed below, is a condition precedent to most charging liens. It has, however, the cross-collateralization characteristic of a retaining lien, insofar as it is modified by the phrase "[a]n attorney has a lien for a general balance of compensation . . . ."
Three Distinct Charging Liens
The dense text of Section 119 creates three distinct liens:
All attorneys- and counselors-at-law shall have a lien on  any money, property, choses in action, or claims and demands in their hands,  on any judgment they may have obtained or assisted in obtaining, in whole or in part, and  on any and all claims and demands in suit for any fees or balance of fees due or to become due from any client.
The first clause of Section 119, as discussed above, is a hybrid: a possessory charging lien, perfected by possession, but securing only fees relating to a particular matter. In analyzing attorney's lien rights, this clause should be read together with the second clause of Section 120, discussed above, which creates a retaining lien in "money due to [the lawyer's] clients in the hands of an adverse party." Insofar as Section 119's first clause creates a lien on "money" and "property," it overlaps with Section 120's retaining lien, as the word "papers" has been construed. Although the cross-collateralization power of the retaining lien in some ways makes it the more powerful lien, because a retaining lien is a "passive" lien, it cannot be foreclosed upon. Thus, the first clause of Section 119 adds the power to actually foreclose on money and property in the lawyer's hands. If real property relates to a judgment obtained by a lawyer, the charging lien will attach to it. Fillmore v. Wells, 10 Colo. 228, 15 P. 343 (1887); Dolan v. Flett, 582 P.2d 694 (Colo. App. 1978). No opinion has construed the lien created upon "choses in action," and most discussion regarding the lien created upon "claims and demands in [the attorney's hands]," concerns the third clause of Section 119. Before turning to the other two types of charging liens created by Section 119, it is worth observing that only the lien created by this first clause does not, by its terms, require that a lawsuit actually be pending; all that is required is that the attorney have the listed items, "in [his or her] hands."
The remaining two liens created by Section 119 create a security interest in "any judgment" the lawyer "obtained or assisted in obtaining, in whole or in part," and on any "claims and demands in suit." The charging lien also extends to any settlement the attorney may have obtained, provided a suit was actually commenced. In addition to fees for services, the charging lien also covers unreimbursed costs the lawyer has advanced in connection with the case. Kallsen v. Big Horn Harvestore Systems, Inc., 761 P.2d 291 (Colo. App. 1988).
Charging Liens Lack Cross-Collateralization Power
Each of the charging liens lack the cross-collateralization power of a retaining lien; they extend only to secure the attorney's efforts in a particular suit, and do not extend to the general balance of compensation owed to the attorney on other matters:
In contrast to the retaining lien, which secures the payment of attorney fees for all legal matters on which services have been rendered, the charging lien is limited to securing the payment of the reasonable value of the attorney fees in the particular matter then being handled by the attorney. See generally Collins, 92 Colo. at 438, 21 P.2d at 711. Where the attorney obtains or assists in obtaining a judgment in favor of the client, therefore, the charging lien extends only to the attorney fees for those professional services rendered in obtaining the judgment and not for unrelated services. Id.; see also Duncan v. Strickney Co., 97 Colo. 9, 46 P.2d 750 (1935).
In re Estate of Benney, 790 P.2d at 323.(2) Although codified, the charging lien is inherently equitable in nature; like a workman's lien, it creates an interest in the fruit of the lawyer's efforts. See id. at 322 ("The purpose of the charging lien is to satisfy the attorney's equitable claim for services rendered to the client.").
Charging Liens on Settlement Proceeds and "Demands in Suit"
One of the earliest studies of the dense vernacular of Section 119 is that of the late Judge Alfred Arraj in In Re Forrest A. Heath Company, 159 F. Supp. 632 (D. Colo. 1958). Judge Arraj's approach of breaking down the multiple clauses of this statute and analyzing each separately remains the best. See id. at 635-36.
The bulk of Judge Arraj's opinion concerns interpretation of the third clause of Section 119's phrase "in suit." In In Re Forrest A. Heath Company, the attorney seeking to assert a charging lien had recovered a $57,000 out-of-court settlement for his client without ever commencing litigation. Judge Arraj concluded that, for purposes of a charging lien, a demand cannot be "in suit" until a summons has been issued and served. Id. at 636. Noting that enactment of the attorney's lien statutes abrogated any Colorado common law equitable lien which might have previously existed, id., the court concluded:
Certainly, attorneys should be compensated for their services; however, a lien cannot be created by the mere fact that an attorney is entitled to be paid for his services. To allow the lien in the instant case would be to give this creditor (claimant) a preferred position which the applicable law does not intend.
Id. at 637. The Tenth Circuit affirmed. Donaldson, Hoffman & Goldstein, supra.
Two lessons may be gleaned from this case. First, the second clause of Section 120, which creates a retaining lien in "money due to [the lawyer's] client in the hands of the adverse party," would have also been unavailing to the disappointed lawyer, because that clause requires that there be "an action or proceeding." Second, whenever possible, an attorney should arrange for settlement payments to be made through the attorney. Had the attorney in In Re Forrest A. Heath Company had physical possession of the settlement check, the retaining lien created by the first clause of Section 120 would have applied, but this was not the case. See Donaldson, Hoffman & Goldstein, 260 F.2d at 335 ("Appellants acknowledge that they never had possession of the property received by the bankrupt in the settlement. . . . "). See also In Re Oiltech, Inc, 38 B.R. at 487 (retaining lien attached to settlement check in possession of attorney whose client was to receive settlement payment); MCI Constructors, Inc. v. District Court of Pueblo County, Colo., 799 P.2d 40, 44 (Colo. 1990) (charging lien applies to settlement funds in hands of adverse party once the settlement agreement has been carried out, but only to the extent that the client has an interest in the funds that remain).
Charging Lien Mechanics
The operation of the charging lien is fairly straightforward. With regard to "demands in suit" and "judgments obtained in whole or part by any attorney," the charging lien is non-possessory and is perfected against third parties(3) by filing a notice with the clerk of the court in which the suit is pending. The lien notice must "set forth specifically the agreement of compensation between such attorney and his client [and] state the basis and amount of the lien in the pending action . . . ." Where services are ongoing, the better practice is to state the amount then due, and basis upon which future compensation is to be computed, e.g., the hourly rate or contingency fee. While not per se prohibited, it is unwise to simply attach a copy of the fee agreement and incorporate it by reference. First, it is not clear that doing so will satisfy the content requirements of the lien notice. Second, most fee agreements contain far more detail that is required by the lien notice; detail which may used by an adversary to the client's disadvantage.
[Once] duly entered of record, shall be notice to all persons and to all parties, including the judgment creditor, to all persons in the case against whom a demand exists, and to all persons claiming by, through, or under any person having a demand in suit or having obtained a judgment that the attorney whose appearance is thus entered has a first lien on such demand in suit or on such judgment for the amount of his fees. Such notice of lien shall not be presented in any manner to the jury in the case in which the same is filed. Such lien may be enforced by the proper civil action.
A charging lien may be foreclosed upon, either in an ancillary proceeding in the case which gave rise to the lien, or in a separate action. In re Marriage of Mann, 697 P.2d 778 (Colo. App. 1984). The burden of proof is on the attorney asserting the lien to establish a right to the lien.Gooding v. Lyon, 63 Colo. 328, 166 P. 564 (1917). Like retaining liens, a perfected charging lien survives bankruptcy. In Re Life Imaging Corp., 31 B.R. 101, 102 (Bkrptcy. D. Colo. 1983). However, once the client has filed bankruptcy, the automatic stay bars the attorney from filing the notice required to perfect the charging lien as to third parties. In re The Marlin Oil Co., 67 B.R. 284 (Bkrptcy. Colo. 1986); In re Storage Technology Corp., 45 B.R. 363 (D. Colo. 1985); Marriage of Berkland, 762 P.2d 779 (Colo. App.1988); In re Electronic Metal Products, Inc., 916 F.2d 1502 (10th Cir. 1990).
Because a client's interest in a potential judgment, or in property which may be the subject of a judgment, might be transferred to an otherwise bona fide third-party purchaser during the pendency of the case, it is advisable to file a charging lien notice at the earliest opportunity, especially if the client's financial situation is precarious; it is not necessary to wait until a judgment is obtained to file the lien notice. Early filing will also avoid the potentially disastrous consequences of the normal rule that, when a judgment is entered in favor of opposing parties in a lawsuit, the court should "net" the judgments against each other and enter a single judgment. See Stiner v. Planned Management Services, Inc., 923 P.2d 186 (Colo. App.1995) (netting of judgments rule inapplicable if attorney's lien on one of the judgments attaches prior to request for entry of net judgment).
Charging Lien Limitations and Waivers
Like a retaining lien, the right to assert a charging lien may be waived or lost through attorney misconduct, including suspension or disbarment of the attorney. People ex rel. MacFarlane, 581 P.2d at 718. It has also been held that public policy prevents a charging lien from attaching to child support payments, In re Marriage of Etcheverry, 921 P.2d 82 (Colo. App.1996); however, a charging lien will attach to property distribution awards between spouses. In re Marriage of Berkland, 762 P.2d 779 (Colo. App.1988) (lien may be enforced against marital property prior to division of property by permanent orders). Accord In re Marriage of Weydert, 703 P.2d 1336 (Colo. App.1985).
However, most of the exceptions to enforcement of retaining liens, discussed above, should not apply to charging liens. It is difficult, for example, to see how payment of the attorney's fees might affect an "important personal liberty interest." Nor should the client's inability to pay obliterate a charging lien, which can only be foreclosed against funds the attorney's services have created.
The statutes relating to the creation and perfection of attorney's liens, mired in syntax written nearly 100 years ago, are not impervious to understanding, but require close attention to detail. Ignored or misunderstood, the attorney will find herself without a perfected lien, or worse, subject to a grievance for having improperly asserted a lien where none exists. On the other hand, carefully followed, the rights created by Sections 119 and 120 are the best and only security that an attorney not working against a retainer enjoys.
- Colorado attorneys owe a debt of gratitude to attorney Joseph P. Jenkins for establishing important case law regarding Colorado attorney's liens not only in federal court, but also in state court. See Jenkins v. District Court in and for the Eighth Judicial District, 676 P.2d 1201 (Colo. 1984).
- Two commentators have expressed the opinion that, with regard to the first clause of Section 120, an attorney may "charge against the identified types of property fees that were incurred in matters other than the particular matters to which the property in question relates." Cowden and Herscovici, Perfection and Enforcement of Attorney's Liens in Colorado, 26 The Colorado Lawyer 57 (March 1997) (citing Klein and Todd, The Treatment of Attorney's Liens in Colorado, 16 The Colorado Lawyer 623 (April 1987), in turn citing Collins, 21 P.2d at 710). Klein and Todd's analysis of Collins is erroneous, and Cowden and Herscovici's reliance on that analysis is misplaced. As discussed above, after In re Estate of Benney and People v. Mills, supra, there can be no doubt that none of the liens created by Section 120 has a cross-collateralization feature.
- Like most liens, between the debtor-client and the creditor-attorney, the charging lien is perfected without formal notice, and attaches from the moment compensable services are rendered by that attorney. People ex rel. MacFarlane, 581 P.2d at 718.