# Iowa Ct. R. 32:1.8: Rule 32:1.8. CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES

> Iowa · Court rules · In force

URL: https://www.frixlaw.com/law-library/statutes/SRULES_IA_CH32_R32_1_8

## Section

- **Citation:** Iowa Ct. R. 32:1.8
- **Heading:** Rule 32:1.8. CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES
- **Jurisdiction:** Iowa
- **Kind:** Court rules
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Iowa Court Rules / Iowa Rules of Professional Conduct / Chapter 32 - Iowa Rules of Professional Conduct / Iowa Ct. R. 32:1.8

## Text

(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire
an ownership, possessory, security, or other pecuniary interest adverse to a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and
reasonable to the client and are fully disclosed and transmitted in writing in a manner that can

be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a reasonable
opportunity to seek the advice of independent legal counsel on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential terms
of the transaction and the lawyer’s role in the transaction, including whether the lawyer is
representing the client in the transaction.
(b) A lawyer shall not use information relating to representation of a client to the
disadvantage of the client unless the client gives informed consent, except as permitted or
required by these rules.
(c) A lawyer shall not solicit any substantial gift from a client, including a testamentary
gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to
the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to
the client. For purposes of this paragraph, related persons include a spouse, child, sibling,
grandchild, parent, grandparent, or other relative or individual with whom the lawyer or the
client maintains a close, familial relationship.
(d) Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate
an agreement giving the lawyer literary or media rights to a portrayal or account based in
substantial part on information relating to the representation.
ibling,
grandchild, parent, grandparent, or other relative or individual with whom the lawyer or the
client maintains a close, familial relationship.
(d) Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate
an agreement giving the lawyer literary or media rights to a portrayal or account based in
substantial part on information relating to the representation.
(e) A lawyer shall not provide financial assistance to a client in connection with pending or
contemplated litigation, except that:
(1) a lawyer may advance court costs and expenses of litigation, the repayment of which
may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of litigation
on behalf of the client.
(f) A lawyer shall not accept compensation for representing a client from one other than the
client unless:
(1) the client gives informed consent;
(2) there is no interference with the lawyer’s independence of professional judgment or with
the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required by rule 32:1.6.
(g) A lawyer who represents two or more clients shall not participate in making an aggregate
settlement of the claims of or against the clients, or in a criminal case an aggregated agreement
as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing
signed by the client. The lawyer’s disclosure shall include the existence and nature of all the
claims or pleas involved and of the participation of each person in the settlement.
(h) A lawyer shall not:
(1) make an agreement prospectively limiting the lawyer’s liability to a client for malpractice;
or
(2) settle a claim or potential claim for such liability with an unrepresented client or former
client unless that person is advised in writing of the desirability of seeking and is given a
reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
yer shall not:
(1) make an agreement prospectively limiting the lawyer’s liability to a client for malpractice;
or
(2) settle a claim or potential claim for such liability with an unrepresented client or former
client unless that person is advised in writing of the desirability of seeking and is given a
reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
(i) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter
of litigation the lawyer is conducting for a client, except that the lawyer may:
(1) acquire a lien authorized 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.
(j) A lawyer shall not have sexual relations with a client, or a representative of a client, unless
the person is the spouse of the lawyer or the sexual relationship predates the initiation of the
client-lawyer relationship. Even in these provisionally exempt relationships, the lawyer should
strictly scrutinize the lawyer’s behavior for any conflicts of interest to determine if any harm
may result to the client or to the representation. If there is any reasonable possibility that the
legal representation of the client may be impaired, or the client harmed by the continuation of
the sexual relationship, the lawyer should immediately withdraw from the legal representation.
(k) While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a)
through (i) that applies to any one of them shall apply to all of them.
If there is any reasonable possibility that the
legal representation of the client may be impaired, or the client harmed by the continuation of
the sexual relationship, the lawyer should immediately withdraw from the legal representation.
(k) While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a)
through (i) that applies to any one of them shall apply to all of them.
(l) A lawyer related to another lawyer shall not represent a client whose interests are
directly adverse to a person whom the lawyer knows is represented by the related lawyer
except upon the client’s informed consent, confirmed in a writing signed by the client. Even

if the client’s interests do not appear to be directly adverse, the lawyer should not undertake
the representation of a client if there is a significant risk that the related lawyer’s involvement
will interfere with the lawyer’s loyalty and exercise of independent judgment, or will create
a significant risk that client confidences will be revealed. For purposes of this paragraph,
“related lawyer” includes a parent, child, sibling, spouse, cohabiting partner, or lawyer related
in any other familial or romantic capacity.
Comment
Business Transactions Between Client and Lawyer
[1] A lawyer’s legal skill and training, together with the relationship of trust and confidence
between lawyer and client, create the possibility of overreaching when the lawyer participates in a
business, property, or financial transaction with a client, for example, a loan or sales transaction or a
lawyer investment on behalf of a client. The requirements of paragraph (a) must be met even when
the transaction is not closely related to the subject matter of the representation, as when a lawyer
drafting a will for a client learns that the client needs money for unrelated expenses and offers to
make a loan to the client
al transaction with a client, for example, a loan or sales transaction or a
lawyer investment on behalf of a client. The requirements of paragraph (a) must be met even when
the transaction is not closely related to the subject matter of the representation, as when a lawyer
drafting a will for a client learns that the client needs money for unrelated expenses and offers to
make a loan to the client. The rule applies to lawyers engaged in the sale of goods or services
related to the practice of law, for example, the sale of investment services to existing clients of the
lawyer’s legal practice. See rule 32:5.7. It also applies to lawyers purchasing property from estates
they represent. It does not apply to ordinary fee arrangements between client and lawyer, which are
governed by rule 32:1.5, although its requirements must be met when the lawyer accepts an interest
in the client’s business or other nonmonetary property as payment of all or part of a fee. In addition,
the rule does not apply to standard commercial transactions between the lawyer and the client for
products or services that the client generally markets to others, for example, banking or brokerage
services, medical services, products manufactured or distributed by the client, and utilities’ services.
In such transactions, the lawyer has no advantage in dealing with the client, and the restrictions in
paragraph (a) are unnecessary and impracticable.
[2] Paragraph (a)(1) requires that the transaction itself be fair to the client and that its essential
terms be communicated to the client, in writing, in a manner that can be reasonably understood.
Paragraph (a)(2) requires that the client also be advised, in writing, of the desirability of seeking the
advice of independent legal counsel. It also requires that the client be given a reasonable opportunity
to obtain such advice
that the transaction itself be fair to the client and that its essential
terms be communicated to the client, in writing, in a manner that can be reasonably understood.
Paragraph (a)(2) requires that the client also be advised, in writing, of the desirability of seeking the
advice of independent legal counsel. It also requires that the client be given a reasonable opportunity
to obtain such advice. Paragraph (a)(3) requires that the lawyer obtain the client’s informed consent,
in a writing signed by the client, both to the essential terms of the transaction and to the lawyer’s
role. When necessary, the lawyer should discuss both the material risks of the proposed transaction,
including any risk presented by the lawyer’s involvement, and the existence of reasonably available
alternatives and should explain why the advice of independent legal counsel is desirable. See rule
32:1.0(e) (definition of informed consent).
[3] The risk to a client is greatest when the client expects the lawyer to represent the client in
the transaction itself or when the lawyer’s financial interest otherwise poses a significant risk that
the lawyer’s representation of the client will be materially limited by the lawyer’s financial interest
in the transaction. Here the lawyer’s role requires that the lawyer must comply, not only with the
requirements of paragraph (a), but also with the requirements of rule 32:1.7. Under that rule, the
lawyer must disclose the risks associated with the lawyer’s dual role as both legal adviser and
participant in the transaction, such as the risk that the lawyer will structure the transaction or give
legal advice in a way that favors the lawyer’s interests at the expense of the client. Moreover, the
lawyer must obtain the client’s informed consent. In some cases, the lawyer’s interest may be such
that rule 32:1.7 will preclude the lawyer from seeking the client’s consent to the transaction
d
participant in the transaction, such as the risk that the lawyer will structure the transaction or give
legal advice in a way that favors the lawyer’s interests at the expense of the client. Moreover, the
lawyer must obtain the client’s informed consent. In some cases, the lawyer’s interest may be such
that rule 32:1.7 will preclude the lawyer from seeking the client’s consent to the transaction.
[4] If the client is independently represented in the transaction, paragraph (a)(2) of this rule is
inapplicable, and the paragraph (a)(1) requirement for full disclosure is satisfied either by a written
disclosure by the lawyer involved in the transaction or by the client’s independent counsel. The fact
that the client was independently represented in the transaction is relevant in determining whether
the agreement was fair and reasonable to the client as paragraph (a)(1) further requires.
Use of Information Related to Representation
[5] Use of information relating to the representation to the disadvantage of the client violates the

lawyer’s duty of loyalty. Paragraph (b) applies when the information is used to benefit either the
lawyer or a third person, such as another client or business associate of the lawyer. For example,
if a lawyer learns that a client intends to purchase and develop several parcels of land, the lawyer
may not use that information to purchase one of the parcels in competition with the client or to
recommend that another client make such a purchase. The rule does not prohibit uses that do not
disadvantage the client. For example, a lawyer who learns a government agency’s interpretation of
trade legislation during the representation of one client may properly use that information to benefit
other clients. Paragraph (b) prohibits disadvantageous use of client information unless the client
gives informed consent, except as permitted or required by these rules. See rules 32:1.2(d), 32:1.6,
32:1.9(c), 32:3.3, 32:4.1(b), 32:8.1, and 32:8.3
o learns a government agency’s interpretation of
trade legislation during the representation of one client may properly use that information to benefit
other clients. Paragraph (b) prohibits disadvantageous use of client information unless the client
gives informed consent, except as permitted or required by these rules. See rules 32:1.2(d), 32:1.6,
32:1.9(c), 32:3.3, 32:4.1(b), 32:8.1, and 32:8.3.
Gifts to Lawyers
[6] A lawyer may accept a gift from a client, if the transaction meets general standards of fairness.
For example, a simple gift such as a present given at a holiday or as a token of appreciation is
permitted. If a client offers the lawyer a more substantial gift, paragraph (c) does not prohibit the
lawyer from accepting it, although such a gift may be voidable by the client under the doctrine of
undue influence, which treats client gifts as presumptively fraudulent. In any event, due to concerns
about overreaching and imposition on clients, a lawyer may not suggest that a substantial gift be
made to the lawyer or for the lawyer’s benefit, except where the lawyer is related to the client as set
forth in paragraph (c).
[7] If effectuation of a substantial gift requires preparing a legal instrument such as a will or
conveyance the client should have the detached advice that another lawyer can provide. The sole
exception to this rule is where the client is a relative of the donee.
[8] This rule does not prohibit a lawyer from seeking to have the lawyer or a partner or associate
of the lawyer named as executor of the client’s estate or to another potentially lucrative fiduciary
position.
Nevertheless, such appointments will be subject to the general conflict of interest
provision in rule 32:1.7 when there is a significant risk that the lawyer’s interest in obtaining the
appointment will materially limit the lawyer’s independent professional judgment in advising the
client concerning the choice of an executor or other fiduciary
r to another potentially lucrative fiduciary
position.
Nevertheless, such appointments will be subject to the general conflict of interest
provision in rule 32:1.7 when there is a significant risk that the lawyer’s interest in obtaining the
appointment will materially limit the lawyer’s independent professional judgment in advising the
client concerning the choice of an executor or other fiduciary. In obtaining the client’s informed
consent to the conflict, the lawyer should advise the client concerning the nature and extent of the
lawyer’s financial interest in the appointment, as well as the availability of alternative candidates for
the position.
Literary Rights
[9] An agreement by which a lawyer acquires literary or media rights concerning the conduct of
the representation creates a conflict between the interests of the client and the personal interests of
the lawyer. Measures suitable in the representation of the client may detract from the publication
value of an account of the representation. Paragraph (d) does not prohibit a lawyer representing a
client in a transaction concerning literary property from agreeing that the lawyer’s fee shall consist
of a share in ownership in the property, if the arrangement conforms to rule 32:1.5 and paragraphs
(a) and (i).
Financial Assistance
[10] Lawyers may not subsidize lawsuits or administrative proceedings brought on behalf of their
clients, including making or guaranteeing loans to their clients for living expenses, because to do so
would encourage clients to pursue lawsuits that might not otherwise be brought and because such
assistance gives lawyers too great a financial stake in the litigation. These dangers do not warrant a
prohibition on a lawyer lending a client court costs and litigation expenses, including the expenses of
medical examination and the costs of obtaining and presenting evidence, because these advances are
virtually indistinguishable from contingent fees and help ensure access to the courts
use such
assistance gives lawyers too great a financial stake in the litigation. These dangers do not warrant a
prohibition on a lawyer lending a client court costs and litigation expenses, including the expenses of
medical examination and the costs of obtaining and presenting evidence, because these advances are
virtually indistinguishable from contingent fees and help ensure access to the courts. Similarly, an
exception allowing lawyers representing indigent clients to pay court costs and litigation expenses
regardless of whether these funds will be repaid is warranted.
Person Paying for a Lawyer’s Services

[11] Lawyers are frequently asked to represent a client under circumstances in which a third
person will compensate the lawyer, in whole or in part. The third person might be a relative or
friend, an indemnitor (such as a liability insurance company), or a co-client (such as a corporation
sued along with one or more of its employees). Because third-party payers frequently have interests
that differ from those of the client, including interests in minimizing the amount spent on the
representation and in learning how the representation is progressing, lawyers are prohibited from
accepting or continuing such representations unless the lawyer determines that there will be no
interference with the lawyer’s independent professional judgment and there is informed consent from
the client. See also rule 32:5.4(c) (prohibiting interference with a lawyer’s professional judgment by
one who recommends, employs, or pays the lawyer to render legal services for another).
[12] Sometimes, it will be sufficient for the lawyer to obtain the client’s informed consent
regarding the fact of the payment and the identity of the third-party payer. If, however, the fee
arrangement creates a conflict of interest for the lawyer, then the lawyer must comply with rule 32:1.7.
The lawyer must also conform to the requirements of rule 32:1.6 concerning confidentiality
for another).
[12] Sometimes, it will be sufficient for the lawyer to obtain the client’s informed consent
regarding the fact of the payment and the identity of the third-party payer. If, however, the fee
arrangement creates a conflict of interest for the lawyer, then the lawyer must comply with rule 32:1.7.
The lawyer must also conform to the requirements of rule 32:1.6 concerning confidentiality. Under
rule 32:1.7(a), a conflict of interest exists if there is significant risk that the lawyer’s representation
of the client will be materially limited by the lawyer’s own interest in the fee arrangement or by
the lawyer’s responsibilities to the third-party payer (for example, when the third-party payer is
a co-client). Under rule 32:1.7(b), the lawyer may accept or continue the representation with the
informed consent of each affected client, unless the conflict is nonconsentable under that paragraph.
Under rule 32:1.7(b), the informed consent must be confirmed in writing.
[12a] When the lawyer is publicly-compensated, such as in the case of a public defender in a
criminal case or a guardian appointed in a civil case or when civil legal services are provided by a
legal aid organization, the fee arrangement ordinarily does not pose the same risk of interference
with the lawyer’s independent professional judgment that exists in other contexts. Under paragraph
(f), such a lawyer must disclose the fact that the lawyer is being compensated through public funding
or that legal services are being provided as part of a legal aid organization; however, formal consent
by the client to the fee arrangement is not required under such circumstances given the limited ability
of an indigent client as a practical matter to refuse the services of the lawyer being compensated
through public funding or through legal aid.
Aggregate Settlements
[13] Differences in willingness to make or accept an offer of settlement are among the risks of
common representation of multiple clients by a single lawyer
rrangement is not required under such circumstances given the limited ability
of an indigent client as a practical matter to refuse the services of the lawyer being compensated
through public funding or through legal aid.
Aggregate Settlements
[13] Differences in willingness to make or accept an offer of settlement are among the risks of
common representation of multiple clients by a single lawyer. Under rule 32:1.7, this is one of
the risks that should be discussed before undertaking the representation, as part of the process of
obtaining the clients’ informed consent. In addition, rule 32:1.2(a) protects each client’s right to have
the final say in deciding whether to accept or reject an offer of settlement and in deciding whether
to enter a guilty or nolo contendere plea in a criminal case. The rule stated in this paragraph is a
corollary of both these rules and provides that, before any settlement offer or plea bargain is made or
accepted on behalf of multiple clients, the lawyer must inform each of them about all the material
terms of the settlement, including what the other clients will receive or pay if the settlement or plea
offer is accepted. See also rule 32:1.0(e) (definition of informed consent). Lawyers representing a
class of plaintiffs or defendants, or those proceeding derivatively, may not have a full client-lawyer
relationship with each member of the class; nevertheless, such lawyers must comply with applicable
rules regulating notification of class members and other procedural requirements designed to ensure
adequate protection of the entire class.
Limiting Liability and Settling Malpractice Claims
[14] Agreements prospectively limiting a lawyer’s liability for malpractice are prohibited because
they are likely to undermine competent and diligent representation. Also, many clients are unable
to evaluate the desirability of making such an agreement before a dispute has arisen, particularly if
they are then represented by the lawyer seeking the agreement
ability and Settling Malpractice Claims
[14] Agreements prospectively limiting a lawyer’s liability for malpractice are prohibited because
they are likely to undermine competent and diligent representation. Also, many clients are unable
to evaluate the desirability of making such an agreement before a dispute has arisen, particularly if
they are then represented by the lawyer seeking the agreement. This paragraph does not, however,
prohibit a lawyer from entering into an agreement with the client to arbitrate legal malpractice
claims, provided such agreements are enforceable and the client is fully informed of the scope and
effect of the agreement. Nor does this paragraph limit the ability of lawyers to practice in the form

of a limited-liability entity, where permitted by law, provided that each lawyer remains personally
liable to the client for his or her own conduct and the firm complies with any conditions required by
law, such as provisions requiring client notification or maintenance of adequate liability insurance.
Nor does it prohibit an agreement in accordance with rule 32:1.2 that defines the scope of the
representation, although a definition of scope that makes the obligations of representation illusory
will amount to an attempt to limit liability.
[15] Agreements settling a claim or a potential claim for malpractice are not prohibited by this
rule. Nevertheless, in view of the danger that a lawyer will take unfair advantage of an unrepresented
client or former client, the lawyer must first advise such a person in writing of the appropriateness of
independent representation in connection with such a settlement. In addition, the lawyer must give
the client or former client a reasonable opportunity to find and consult independent counsel.
Acquiring Proprietary Interest in Litigation
[16] Paragraph (i) states the traditional general rule that lawyers are prohibited from acquiring a
proprietary interest in litigation
g of the appropriateness of
independent representation in connection with such a settlement. In addition, the lawyer must give
the client or former client a reasonable opportunity to find and consult independent counsel.
Acquiring Proprietary Interest in Litigation
[16] Paragraph (i) states the traditional general rule that lawyers are prohibited from acquiring a
proprietary interest in litigation. Like paragraph (e), the general rule has its basis in common law
champerty and maintenance and is designed to avoid giving the lawyer too great an interest in the
representation. In addition, when the lawyer acquires an ownership interest in the subject of the
representation, it will be more difficult for a client to discharge the lawyer if the client so desires.
The rule is subject to specific exceptions developed in decisional law and continued in these rules.
The exception for certain advances of the costs of litigation is set forth in paragraph (e). In addition,
paragraph (i) sets forth exceptions for liens authorized by law to secure the lawyer’s fees or expenses
and contracts for reasonable contingent fees. Iowa law determines which liens are authorized. These
may include liens granted by statute and liens acquired by contract with the client. When a lawyer
acquires by contract a security interest in property other than that recovered through the lawyer’s
efforts in the litigation, such an acquisition is a business or financial transaction with a client and
is governed by the requirements of paragraph (a). Contracts for contingent fees in civil cases are
governed by rule 32:1.5.
Client-Lawyer Sexual Relationships
[17] The relationship between lawyer and client is a fiduciary one in which the lawyer occupies
the highest position of trust and confidence
orts in the litigation, such an acquisition is a business or financial transaction with a client and
is governed by the requirements of paragraph (a). Contracts for contingent fees in civil cases are
governed by rule 32:1.5.
Client-Lawyer Sexual Relationships
[17] The relationship between lawyer and client is a fiduciary one in which the lawyer occupies
the highest position of trust and confidence. The relationship is almost always unequal; thus, a sexual
relationship between lawyer and client can involve unfair exploitation of the lawyer’s fiduciary
role, in violation of the lawyer’s basic ethical obligation not to use the trust of the client to the
client’s disadvantage. In addition, such a relationship presents a significant danger that, because
of the lawyer’s emotional involvement, the lawyer will be unable to represent the client without
impairment of the exercise of independent professional judgment. Moreover, a blurred line between
the professional and personal relationships may make it difficult to predict to what extent client
confidences will be protected by the attorney-client evidentiary privilege, since client confidences are
protected by privilege only when they are imparted in the context of the client-lawyer relationship.
Because of the significant danger of harm to client interests and because the client’s own emotional
involvement renders it unlikely that the client could give adequate informed consent, this rule
prohibits the lawyer from having sexual relations with a client regardless of whether the relationship
is consensual and regardless of the absence of prejudice to the client.
[18] Sexual relationships that predate the client-lawyer relationship are not prohibited. Issues
relating to the exploitation of the fiduciary relationship and client dependency are diminished
when the sexual relationship existed prior to the commencement of the client-lawyer relationship
regardless of whether the relationship
is consensual and regardless of the absence of prejudice to the client.
[18] Sexual relationships that predate the client-lawyer relationship are not prohibited. Issues
relating to the exploitation of the fiduciary relationship and client dependency are diminished
when the sexual relationship existed prior to the commencement of the client-lawyer relationship.
However, before proceeding with the representation in these circumstances, the lawyer should
consider whether the lawyer’s ability to represent the client will be materially limited by the
relationship. See rule 32:1.7(a)(2).
[19] When the client is an organization, paragraph (j) of this rule prohibits a lawyer for the
organization (whether inside counsel or outside counsel) from having a sexual relationship with
a constituent of the organization who supervises, directs, or regularly consults with that lawyer
concerning the organization’s legal matters.
Imputation of Prohibitions

[20] Under paragraph (k), a prohibition on conduct by an individual lawyer in paragraphs (a)
through (i) also applies to all lawyers associated in a firm with the personally prohibited lawyer.
For example, one lawyer in a firm may not enter into a business transaction with a client of another
member of the firm without complying with paragraph (a), even if the first lawyer is not personally
involved in the representation of the client. The prohibitions set forth in paragraphs (j) and (l) are
personal and are not applied to associated lawyers.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/SRULES_IA_CH32_R32_1_8. Check the current official text before relying on it. Not legal advice.