                        Docket No. 102578.


                       IN THE
                  SUPREME COURT
                         OF
                THE STATE OF ILLINOIS




BRIAN DOWLING, Appellee, v. CHICAGO OPTIONS
ASSOCIATES, INC., et al. (DLA Piper Rudnick Gray Cary (US),
                     LLP, Appellant).

                     Opinion filed May 3, 2007.



   JUSTICE GARMAN delivered the judgment of the court, with
opinion.
   Chief Justice Thomas and Justices Fitzgerald and Karmeier
concurred in the judgment and opinion.
   Justice Freeman concurred in part and dissented in part, with
opinion, joined by Justices Kilbride and Burke.



                             OPINION

    Plaintiff, Brian Dowling, commenced proceedings to collect on
two judgments he obtained against defendants, Chicago Options
Associates and Michael E. Davis. In the process, Dowling learned
that Davis had paid retainers to his lawyers, DLA Piper Rudnick Gray
Cary (US), LLP (now known as DLA Piper (US) LLP) (hereafter
Piper), in connection with efforts to protect his assets from Dowling’s
judgments. Dowling sought turnover of those retainers from Piper.
The circuit court of Cook County ruled in Dowling’s favor and
ordered Piper to pay over to Dowling the sum of $137,576.53. The
appellate court affirmed. 365 Ill. App. 3d 89.

                           BACKGROUND
     Dowling sued defendants for breach of contract. As a result of this
action, two judgments were entered on behalf of Dowling in the total
amount of $817,830.45. Thereafter, Davis set out to shield his assets
from the reach of Dowling’s judgments. In February 2003, Davis
hired Piper to represent him in connection with the purchase of a
home in Florida. For this purpose, Davis deposited a large sum of
money in a trust account held by Piper. The purchase of the home was
completed on February 24, 2003, with funds paid from the trust
account. On February 26, 2003, Davis and his wife, Emily Seibel,
authorized Piper to allocate $100,000 (the actual amount was
$100,094.72) of that money as a retainer, based upon an agreement
referred to by the parties as an “engagement letter.” Piper transferred
that money to its general account and applied it to monthly bills
attributable to work performed for Davis and Seibel in connection
with the purchase of their Florida home and, later on, in connection
with the instant Illinois litigation with Dowling. The engagement
letter was addressed to Davis and Seibel and referenced “Client
Engagement; 308813–000020.” It stated, in pertinent part, as follows:
        “Dear Michael and Emily:
            We are pleased to have the opportunity to represent you
        regarding your purchase of a home in Florida and to give you
        general advice regarding asset protection.
                                  ***
            We customarily send monthly invoices for services
        rendered and other charges incurred for your account during
        the previous month. The monthly invoice details the work
        performed and the types of charges incurred. Payment will be
        due thirty (30) days after the date of our invoice. Payment
        should be made in U.S. dollars, in checks or drafts payable to
        ‘Piper Rudnick LLP.’
            You have authorized us to allocate $100,000 of the cash
        on hand as a retainer. These funds will be applied toward
        payment of the final monthly invoice containing entries with

                                  -2-
        respect to the above-referenced matter and will be subject to
        repayment by us if the amount of our fees for work done and
        costs incurred that remain unpaid do not equal the amount of
        the retainer then held by us. Under such circumstances, the
        balance of the retainer would then be returned to you when
        our representation of you on this matter ceases. We reserve
        the right to use any part of said funds to satisfy a delinquent
        payment, and to discontinue our representation until you
        forward funds to restore the full retainer.
                                   ***
             *** Finally, I remind you that we are taking very
        aggressive positions to attempt to protect your assets and
        satisfy your related concerns. Those positions are likely to be
        attacked in litigation in Florida or Illinois. While we believe
        that our advice will, more likely than not, be upheld in court,
        given the animosity between you and the judgment creditor,
        litigation is a virtual certainty.”
    On September 23, 2003, a citation to discover assets was served
on Davis; he failed to appear at the hearing on the citation and was
eventually held in contempt for failure to appear. On October 17,
2003, a citation was issued to “Piper Rudnick LLP Trust,” based upon
the transfer of money from Davis’ Chicago bank account to Piper for
the purchase of his Florida home. Dowling filed a motion to require
Piper to turn over all money belonging to Davis and held in Piper’s
trust account or, in the alternative, to enjoin Piper from distributing
from its trust account any monies received from Davis. At a hearing
on November 20, 2003, Piper, through one of its partners, Gerald B.
Lurie, represented to the circuit court that Piper was not holding any
funds for Davis in its trust account. Based on this information, the
court denied Dowling’s motion. Both citations were dismissed on
June 8, 2004, and leave was granted to file a second citation. On June
8, 2004, Seibel drew a check for $50,000 on a Florida account
belonging to her and Davis and gave it to Piper. Piper applied that
money to its monthly bills for Davis and Seibel relating to Dowling’s
collection efforts.
    Dowling’s counsel subsequently learned that Piper had received
funds from Davis which it had deposited in its general account. A
second citation to discover assets was issued and served on Piper on

                                 -3-
August 6, 2004. Piper produced records showing payments to Piper
from Davis and Seibel and Piper’s application of those payments.
Dowling then filed a motion to turnover assets, requesting that Piper
be ordered to pay Dowling $137,576.53 of the funds paid to Piper by
Davis and Seibel. Those amounts consisted of $87,576.53, the
balance on the $100,000 retainer as of October 27, 2003, and the
$50,000 paid to Piper by Seibel on June 8, 2004. Oral argument was
heard on April 18, 2005. The circuit court granted Dowling’s motion
and ordered Piper to pay Dowling $137,576.53. Piper filed a notice
of appeal, seeking vacatur of the turnover order.
    On appeal, Piper argued that the circuit court erred in ordering the
funds turned over to Dowling. Piper argued that the retainers
belonged, not to Davis, but to Piper. According to Piper, the only way
Davis could have reclaimed those funds was to terminate Piper’s
representation of him. The appellate court disagreed, finding that
Piper’s argument concerning the ownership of the retainer funds was
“disingenuous.” The court found that the designation of the account
in which Piper held the funds was not determinative of Piper’s
obligation to disclose to the circuit court that it held those funds. The
court criticized Piper for not revealing the existence of the $100,000
retainer, which would have allowed the circuit court to determine
whether the funds could be subject to a turnover order. The appellate
court held that the trial court did not abuse its discretion in ordering
the funds paid to Dowling, and it rejected Piper’s argument that the
unearned retainer funds did not belong to Davis. 365 Ill. App. 3d at
98.
    Justice Hall dissented, noting that a “retainer” is defined both as
a client’s authorization for the attorney to act in a case and as a fee
paid to a lawyer to secure legal representation. Thus, a retainer
establishes the employment of the attorney by the client. In addition,
Justice Hall opined, the fact that Piper could and did satisfy its fees
from the retainer as they were earned did not mean that the retainer
belonged to Davis. Justice Hall found it significant that Piper
deposited the funds in its general account and not in a client trust
account. In the absence of any contention that Piper violated
disciplinary rules by doing so, Justice Hall would find that the funds
were Piper’s property, subject to a duty of reimbursement of any
unused funds to Davis at the end of the representation. Justice Hall

                                  -4-
was concerned that the majority’s decision would have a chilling
effect on the ability of judgment debtors to hire legal counsel to
represent them and on the willingness of lawyers to undertake such
representation. 365 Ill. App. 3d at 99 (Hall, J., dissenting).
    We allowed Piper’s petition for leave to appeal (210 Ill. 2d R.
315). We granted leave to the Illinois State Bar Association (ISBA)
and the Chicago Bar Association (CBA) to file a brief amici curiae.

                             ANALYSIS
                                    I
    This appeal requires us to determine whether monies paid to Piper
by Davis and Seibel in connection with Piper’s legal representation
belonged to Piper or to Davis and Seibel. As to the $100,000 retainer,
the answer to this question hinges on the interpretation of the parties’
written agreement by which Davis and Seibel agreed to pay the
retainer. The interpretation of a contract involves a question of law,
which we review de novo. People ex rel. Department of Public
Health v. Wiley, 218 Ill. 2d 207, 223 (2006).
    We must also determine whether the circuit court erred in
ordering Piper to turn over to Dowling the $50,000 paid to Piper by
Seibel. No written agreement accompanied this payment. We note
that prior to ruling on Dowling’s motion for a turnover order, the
circuit court did not conduct an evidentiary hearing, nor did the court
make any findings of fact. The court apparently relied on the parties’
oral argument and the record. Accordingly, we review the court’s
ruling on this issue de novo. See Northwest Diversified, Inc. v.
Mauer, 341 Ill. App. 3d 27, 33 (2003) (where trial court heard no
testimony and based its decision on documentary evidence,
deferential standard of review is inapplicable and reviewing court will
make an independent decision on the facts).

                                  II
    Piper argues that the $100,000 paid to it in March 2003 by Davis
was an advance payment retainer that became Piper’s property when
paid and was, therefore, not subject to a turnover order. Dowling
argues that Piper has failed to meet its burden of demonstrating that
the payment was in fact an advance payment retainer. Before

                                  -5-
addressing these arguments, we must determine whether advance
payment retainers exist and are permissible in Illinois.
    Black’s Law Dictionary defines “retainer” as:
             “1. A client’s authorization for a lawyer to act in a case
         *** 2. A fee that a client pays to a lawyer simply to be
         available when the client needs legal help during a specified
         period or on a specified matter. 3. A lump-sum fee paid by the
         client to engage a lawyer at the outset of a matter. *** 4. An
         advance payment of fees for work that the lawyer will
         perform in the future.” Black’s Law Dictionary 1341-42 (8th
         ed. 2004).
    Two types of retainers are generally recognized. The first is
variously referred to as the “true,” “general,” or “classic” retainer.
Such a retainer is paid by a client to the lawyer to secure the lawyer’s
availability during a specified period of time or for a specified matter.
This type of retainer is earned when paid and immediately becomes
property of the lawyer, regardless of whether the lawyer ever actually
performs any services for the client. In re McDonald Bros.
Construction, Inc., 114 B.R. 989, 998 (N.D. Ill. 1990). The second
type of retainer is referred to as a “security retainer.” Under this
arrangement, the funds paid to the lawyer are not present payment for
future services; rather, the retainer remains the property of the client
until the lawyer applies it to charges for services that are actually
rendered. Any unearned funds are refunded to the client. The purpose
of a security retainer is to secure payment of fees for future services
that the lawyer is expected to perform. McDonald, 114 B.R. at 999.
Pursuant to Rule 1.15(a) of the Illinois Rules of Professional
Conduct, a security retainer must be deposited in a trust account and
kept separate from the lawyer’s own property. 188 Ill. 2d R. 1.15(a).
    There is yet a third type of retainer, called the “advance payment
retainer.” This type of retainer consists of a present payment to the
lawyer in exchange for the commitment to provide legal services in
the future. Ownership of this retainer passes to the lawyer
immediately upon payment. McDonald, 114 B.R. at 1000.
Accordingly, the lawyer deposits the retainer into his or her general
account; in fact, an advance payment retainer may not be deposited
into a trust account, since a lawyer may not commingle property of a
client with the lawyer’s own property. 188 Ill. 2d R. 1.15(a).

                                  -6-
     This court has not often addressed the issue of retainers and their
characteristics. An early case, Union Surety & Guaranty Co. v.
Tenney, 200 Ill. 349 (1902), dealt with the issue of general or classic
retainers and their enforceability. The lawyers in that case sued to
enforce a contract providing that the client would pay a retainer of
$1,000. The client, an insurance company, had engaged the law firm
to represent it in its efforts to become licensed to do business in
Illinois. The company later abandoned the project and did not pay the
agreed upon retainer. In affirming the lower courts’ decisions in favor
of the lawyers, this court stated:
         “A retainer, as the word implies, is the act of the client in
         employing his attorney or counselor. The word is also used to
         denote the fee which the client pays his attorney when he
         retains him to act for him, and thereby prevents him from
         acting for his adversary. Here was a special contract for a
         retaining fee of $1000, and a recovery could be had on such
         a contract without proving any services at all, for the retainer
         precedes the rendering of services. If appellant, after retaining
         appellees as counsel, chose not to avail itself any further of
         their services, that was its privilege, but could furnish no
         ground for a refusal to pay the stipulated retaining fee.”
         Tenney, 200 Ill. at 353.
     In In re Taylor, 66 Ill. 2d 567 (1977), the respondent was
disciplined for neglecting clients’ cases. The clients had paid
respondent retainers to represent them. Respondent did not perform
the services and did not return the clients’ money. In one instance, he
was accused of converting a $150 fee he had been paid to defend a
client in a wrongful-death action. Respondent did not perform the
expected legal services and he failed to refund the fee. This court
rejected the Administrator’s argument that respondent had converted
the funds. Although the court found that respondent had neglected his
clients’ cases and suspended him for one year, the court concluded
that it was clear the money had been paid to respondent in exchange
for expected legal services. Taylor, 66 Ill. 2d at 573. The court did not
elaborate on its reasoning. However, the court’s holding can be
interpreted as implicitly recognizing that ownership of the retainer
passed to the lawyer upon payment and was, therefore, not funds of
his client.

                                   -7-
     Discussion of advance payment retainers has frequently arisen in
the context of bankruptcy cases where, before filing a petition, a
debtor’s attorney receives a retainer for services to be rendered in
connection with the debtor’s bankruptcy case. The McDonald case is
just such a case. As that court acknowledged, the answer to the
question of who owns a pre-petition retainer is governed by state law.
McDonald, 114 B.R. at 996. The court observed that there appeared
to be no Illinois court decision authoritatively resolving the question
of whether advance payment retainers are permissible, and that the
issue had been primarily addressed by bar associations ethics
committee opinions. Nonetheless, McDonald concluded that advance
payment retainers are permissible in Illinois. The court first noted that
Illinois recognizes the general rule of freedom of contract with
respect to attorney fees. Second, the court noted that the ISBA has
“repeatedly approved” advance payment retainers in response to
arguments that such retainers violate the rules requiring segregation
of client funds from those of the attorney. Finally, the court noted that
Illinois courts have addressed challenges to advance payment
retainers without suggesting that such retainers are impermissible.
McDonald, 114 B.R. at 1001.
     Another bankruptcy case from Illinois, In re Production
Associates, Ltd., 264 B.R. 180 (N.D. Ill. 2001), also addressed the
issue of advance payment retainers. The court there noted that
advance payment retainers may represent a full payment covering all
services to be performed for the client, i.e., a flat fee, or the payment
may be a partial payment that the client will be required to replenish
once legal services equal to the amount of the retainer have been
rendered. Although the retainer belongs to the lawyer once paid, it is
subject to refund if the representation ends before the retainer has
been exhausted. The court noted that Illinois law does not bar
advance payment retainers. Production Associates, 264 B.R. at 185.
     The Illinois Rules of Professional Conduct (134 Ill. 2d R. 1.1 et
seq.) do not currently recognize advance payment retainers. Rule
1.15(a) merely requires lawyers to segregate client funds, without
specifying under what circumstances funds received by lawyers
constitute funds of the client. Rule 1.15(d) requires lawyers to deposit
all nominal or short-term funds belonging to clients in pooled
interest-bearing trust accounts with the Lawyers Trust Fund of Illinois

                                  -8-
designated as income beneficiary. 188 Ill. 2d R. 1.15(d). These rules
assume that the determination as to who owns the funds at issue has
already been made by the lawyer and client. However, the Attorney
Registration and Disciplinary Commission (ARDC) has issued a
Client Trust Account Handbook (ARDC 2001) (Handbook) in which
it appears to interpret this court’s decision in Taylor to recognize the
validity of advance payment retainers. The purpose of the Handbook
is to act as a guide to lawyers concerning the creation and
maintenance of client trust accounts. In the section entitled, “Client
Trust Accounting,” the Handbook explicitly recognizes the distinction
between security retainers and advance fee payments. In a section
entitled “Where Are Retainers and Advances for Fees Deposited?”
the Handbook states:
             “[W]ith advance fee payments, the client agrees to pay in
        advance for some or all of the services that the lawyer is
        expected to perform on a particular legal problem. The
        prepayment is applied against the lawyer’s hourly fee and the
        lawyer spends down the retainer as services are rendered. In
        Illinois, unless otherwise provided by statute or court order,
        the specific terms of the fee agreement with the client
        determine whether such prepayments remain the client’s
        funds and must be deposited in the trust account until earned
        or whether they are the lawyer’s funds and therefore must not
        be placed in the trust account.
             If a lawyer and a client agree in writing or orally that the
        lawyer will deposit the prepayment in the client trust account
        and bill against it as the representation proceeds, the funds
        remain the property of the client and must be deposited in the
        trust account. Withdrawals can be made only with notice to
        and agreement of the client. On the other hand, if the lawyer
        and client agree that the prepayment is immediate
        compensation for the lawyer’s commitment to perform future
        services, e.g., a flat fee agreement, the funds are the property
        of the lawyer and may be deposited in the lawyer’s operating
        or business account.” Client Trust Account Handbook pt.
        IV(A)(5).
     That section goes on to note that difficulties of interpretation arise
where the lawyer and client do not have an agreement that explicitly

                                   -9-
defines the type of retainer being paid. Although the ARDC
acknowledges that this court has not definitively addressed the issue
of whether advance fee payments constitute client funds or property
of the lawyer for purposes of determining where the payments must
be deposited, it found some support in this court’s conclusion in
Taylor that the unearned fees paid there in expectation of future legal
services did not constitute client funds. The Handbook further
reminds lawyers that, regardless of the type of account in which
advance fees are deposited, they are subject to the lawyer’s duty, as
set forth in Rule 1.16(e) (134 Ill. 2d R. 1.16(e)), to promptly refund
any part of a fee that is unearned when the representation ends.
     Further support for the concept of advance payment retainers in
Illinois comes from three ISBA advisory opinions. The first opinion,
No. 703, was issued in November 1980 and involved questions of
interpretation of former Rule 9–102(a) of the Illinois Code of
Professional Responsibility, the antecedent to current Rule 1.15 of the
Rules. One inquiry received by the Committee on Professional
Conduct asked whether advance fees paid by clients must be
segregated into a trust account until earned. Rule 9–102(a) provided
that “all funds of clients” paid to a lawyer must be deposited in a
separate trust account. After noting the different applications of that
phrase by other jurisdictions, the opinion stated its conclusion:
         “This Committee is of the opinion that Illinois Rule 9–102(a)
         does not apply to retainer fees whatever form they may take
         unless when paid to the lawyer, they are expressly designated
         in writing to constitute security for fees to be earned. In the
         latter instance the funds would remain ‘funds of the client’
         until earned and a default occurs in payment by the client.
         Otherwise, retainers paid by clients to lawyers, in whatever
         form, cease to be ‘funds of the client’ and accordingly in the
         opinion of the Committee are not governed by Supreme Court
         Rule 9–102.” ISBA Op. No. 703 (November 1980).
     In Opinion No. 722, issued in April 1981, the question addressed
by the Committee was whether a law firm may enter into an
agreement with a client for a noncancellable and nonrefundable
retainer and what obligation the firm would have if the only service
performed was the initial interview before the client terminates the
representation. The Committee stated that the firm may use such an

                                 -10-
agreement so long as the fee is not excessive. Although the opinion
does not discuss the question of who owns such fees, it seems
apparent that if a fee is nonrefundable, it belongs to the lawyer when
paid. ISBA Op. No. 722 (April 1981).
     The ISBA Board of Governors reaffirmed Opinion Nos. 703 and
722 in Opinion No. 90–10, issued in January 1991, following this
court’s adoption of the current Rules of Professional Conduct in
1990. In interpreting Rule 1.15, the Committee stated that, unless
agreed otherwise by the lawyer and client in writing, advance fees
paid by the client become property of the lawyer when paid. ISBA
Op. No. 90–10 (January 1991). This suggests that our current Rule
1.15 contains a presumption in favor of an advance payment retainer.
     We agree with amici that this court should explicitly recognize the
existence of advance payment retainers in Illinois. We find support
for such retainers in the Taylor and McDonald cases and in the
ARDC Handbook and ISBA opinions referred to above. We also
agree with the suggestions of amici regarding the necessity of
reducing advance payment retainer agreements to writing and clearly
setting forth the parties’ intentions in those agreements.
     Accordingly, we recognize advance payment retainers as one of
three retainers available to lawyers and their clients in this state. The
other retainers are the classic or general retainer and the security
retainer. The type of retainer that is appropriate will depend on the
circumstances of each case. The guiding principle, however, should
be the protection of the client’s interests. In the vast majority of cases,
this will dictate that funds paid to retain a lawyer will be considered
a security retainer and placed in a client trust account, pursuant to
Rule 1.15. Separating a client’s funds from that of the lawyer protects
the client’s retainer from the lawyer’s creditors. See In re Lewis, 118
Ill. 2d 357, 362-63 (1987). Commingling of a lawyer’s funds with
those of a client has often been the first step toward conversion of a
client’s funds. In addition, commingling of a client’s and the lawyer’s
funds presents a risk of loss in the event of the lawyer’s death. In re
Clayter, 78 Ill. 2d 276, 281 (1980). Thus, advance payment retainers
should be used only sparingly, when necessary to accomplish some
purpose for the client that cannot be accomplished by using a security
retainer.


                                   -11-
     An appropriate use of advance payment retainers is illustrated by
the circumstances of the instant case, where the client wishes to hire
counsel to represent him or her against judgment creditors. Paying the
lawyer a security retainer means the funds remain the property of the
client and may therefore be subject to the claims of the client’s
creditors. This could make it difficult for the client to hire legal
counsel. Similarly, a criminal defendant whose property may be
subject to forfeiture may wish to use an advance payment retainer to
ensure that he or she has sufficient funds to secure legal
representation. We caution, however, that such fee arrangements, as
well as those involving security retainers, are subject to a lawyer’s
duty to refund any unearned fees, pursuant to Rule 1.16(e) (134 Ill. 2d
R. 1.16(e)). A client has an unqualified right to discharge a lawyer
and, if discharged, the lawyer may retain only a sum that is reasonable
in light of the services the lawyer performed prior to being
discharged. Client Trust Account Handbook pt. IV(A)(5).
     Any written retainer agreement, regardless of the type of retainer
contemplated, should clearly define the kind of retainer being paid.
If the parties agree that the client will pay a security retainer, that term
should be used in the agreement; it should also state that the funds
remain the property of the client until used to pay for services
rendered and that the funds will be deposited in a client trust account.
If the parties determine that an advance payment retainer best meets
the client’s needs, the written agreement must use that term and
clearly state that the funds become the property of the lawyer when
paid and that they will not be held in a client trust account.
     Advance payment retainer agreements must be in writing and they
must clearly disclose to the client the nature of the retainer, where it
will be deposited, and how the lawyer or law firm will handle
withdrawals from the retainer in payment for services rendered.
Having a written agreement reduces the risk of misunderstandings
between a lawyer and client regarding the nature of the retainer paid
by the client. As the ARDC Handbook advises lawyers:
             “Because the character of the funds is determined by the
         fee agreement, it is wisest and most consistent with a lawyer’s
         fiduciary obligations to assure that you and the client
         explicitly agree on how the advanced fees should be held and

                                   -12-
        to reduce that agreement to writing. If you do not do so, you
        risk being second-guessed, in hindsight, often when your
        relationship with the client has soured, when there is a
        disagreement about what services were promised, and when
        the retainer has already been spent.” Client Trust Account
        Handbook pt. IV(A)(5).
    A written agreement providing for an advance payment retainer
must contain language advising the client of the option to place his or
her money into a security retainer. The agreement must clearly advise
the client that the choice of the type of retainer to be used is the
client’s alone; provided, however, that if the attorney is unwilling to
represent the client without receiving an advance payment retainer,
the agreement must so state, including the attorney’s reasons therefor.
In addition, an advance payment retainer agreement must set forth the
special purpose behind the retainer and explain why an advance
payment retainer is advantageous to the client.
    Finally, in the event that the parties’ intent cannot be gleaned
from the language of their agreement, we conclude that the agreement
must be construed as providing for a security retainer. While this is
contrary to the ISBA’s apparent construction of Rule 1.15, we
conclude that, in most instances, construing an unclear retainer
agreement to establish a security retainer will provide the greatest
protection for a client’s funds, since they will not be subject to the
lawyer’s creditors and withdrawals from the funds may be made only
with notice to and agreement of the client. Reimbursement to the
client of any unearned fees may also be facilitated by construing an
unclear agreement as a security retainer, since the funds must be held
separate from the lawyer’s own funds. See Client Trust Account
Handbook pt. IV(A)(5).
    We are aware of the potential for abuse of advance payment
retainers, particularly in circumstances such as the instant case where
a judgment debtor seeks to resist efforts of a judgment creditor to
collect on a judgment. No argument has been raised in this case that
the retainers paid to Piper were excessive in light of the services that
the parties anticipated Piper would render to Davis and Seibel.
Therefore, it is unnecessary for us to comment further on this
question. We would only caution that Rule 1.5(a) of the Rules of

                                 -13-
Professional Conduct requires that a lawyer’s fee be reasonable in
light of the factors set forth therein. 134 Ill. 2d R. 1.5(a).

                                   III
    We now turn to the question of whether the $100,000 retainer
paid to Piper by Davis and Seibel in February 2003 was an advance
payment retainer, as Piper claims, or a security retainer in which
Davis and Seibel maintained an ownership interest. Both Piper and
Dowling accept, in principle, the concept of advance payment
retainers.
    When construing a contract, the court’s primary objective is to
give effect to the intent of the parties, as revealed by the language
they used in their agreement. In re Doyle, 144 Ill. 2d 451, 468 (1991).
A contract should be given a fair and reasonable construction based
upon all of its provisions, read as a whole. United Airlines, Inc. v.
City of Chicago, 116 Ill. 2d 311, 318 (1987).
    Initially, we note that Dowling accuses Piper of attempting to
assist Davis in committing a fraud upon Dowling by failing to
disclose the balance on the $100,000 retainer it was holding in its
general account. We disagree with Dowling and with the circuit court
and the appellate court majority that Piper was required to disclose at
the first citation hearing the fact that it was holding funds received
from Davis in its general office account. The first citation to discover
assets that was served on Piper was addressed to “Piper Rudnick LLP
Trust” and sought information regarding money paid by Davis to
Piper’s trust account. Although claiming that no such entity existed,
Piper appeared and advised the circuit court that it held no money
belonging to Davis in its trust account. Piper was not required to do
more. Since the retainer was held in Piper’s general office account,
that retainer was not covered by Dowling’s citation. We do not agree
with the appellate majority that Piper’s actions in this regard were
“disingenuous.”
    Dowling’s primary argument is that the $100,000 retainer could
only be used to pay for Piper’s services rendered in connection with
the matter number referenced by the written agreement. He points to
the fact that the engagement letter referenced only matter No.

                                 -14-
308813–000020 and that the letter described this matter number as,
“General,” while the matter number assigned to Piper’s representation
of Davis in the Illinois litigation against Dowling’s collection efforts
was No. 308813–000001 and was named “Adv. Brian Dowling.” The
matter number referenced in the letter involved only the purchase of
the Florida home of Davis and Seibel and general advice concerning
the protection of the couple’s assets. Dowling notes that Piper sent no
bills referencing that matter number after July 2003. Hence, there
remained a balance on the retainer of $87,576.53 as of October 27,
2003.
    Piper argues that by focusing on the matter number referenced in
the engagement letter, Dowling ignores the language of the letter
itself, which clearly anticipates that further services would be
required beyond the purchase of the Florida home and general advice
regarding asset protection. Piper refers to the following statements at
the end of the letter:
         “Finally, I remind you that we are taking very aggressive
         positions to attempt to protect your assets and satisfy your
         related concerns. Those positions are likely to be attacked in
         litigation in Florida or Illinois. While we believe that our
         advice will, more likely than not, be upheld in court, given the
         animosity between you and the judgment creditor, litigation
         is a virtual certainty.”
Based upon this language, Piper argues the engagement letter clearly
anticipated that the $100,000 retainer would be used for litigation
with Dowling and that such litigation was nearly inevitable.
    We note that as of the February 25, 2003, date of the letter,
Dowling had not commenced his collection efforts. Those efforts did
not begin until September 2003, with service of a citation to discover
assets on Davis. As Piper asserts, the reason that matter No. 000020
was assigned a “general” designation is because, at that time, no
effort had been made by Dowling to collect on his judgments. Thus,
we agree with Piper that the word “general” was not intended as a
restriction on the type of legal work Piper might perform for Davis
and Seibel.



                                  -15-
    Dowling also argues that the ARDC Handbook and Rule 1.15
make it clear that an advance payment fee is for services to be
performed on a specific matter. However, a reading of the rule and of
the Handbook reveal no such mandate. In its current form, Rule 1.15
does not even address the issue of whether a retainer paid by a client
becomes the property of the lawyer or remains the property of the
client. Rather, it is the language of an advance payment retainer
agreement that expresses the intent of the parties to the agreement.
Should a lawyer and his or her client wish to restrict an advance
payment retainer to a specific matter, they are free to express that
intent in their agreement; likewise, should an advance payment
retainer be intended to encompass several legal matters or range of
services, the parties may so provide in their agreement. We are aware
of no rules limiting advance payment retainer agreements in the
manner suggested by Dowling.
    Finally, Dowling argues that, because there is no clear evidence
that the engagement letter provided for an advance payment retainer,
we should construe the agreement as providing for a security retainer.
He further asserts that, to the extent the agreement does call for an
advance payment retainer, it was a retainer only for the matter number
referenced by the letter and not for any other matter, such as the
instant Illinois litigation.
    After careful consideration, we conclude that the $100,000 paid
by Davis and Seibel to Piper in February 2003 was an advance
payment retainer whose ownership passed to Piper upon payment.
While the agreement does not explicitly identify the retainer as an
advance payment retainer, this fact is not fatal to a finding that an
advance payment retainer was intended. There is no impediment,
either in the case law or in our Rules of Professional Conduct, to the
ability of lawyers and their clients to agree that a retainer paid shall
become the property of the lawyer upon payment. We find it
significant that the agreement here does not require that Piper deposit
the $100,000 retainer in a client trust account. It requires only that the
retainer be used in connection with Piper’s representation of Davis
and Seibel with regard to the purchase of their Florida home and
protecting their assets from the reach of Dowling’s judgments. We
also note that the engagement letter does not require Piper to obtain

                                  -16-
permission from Davis and Seibel before it could apply the retainer
to its legal bills, as would be expected in a security retainer
agreement. See Client Trust Account Handbook, pt. IV(A)(5)
(property that must be held in a client trust account includes
“[p]repayments for legal services where, under the terms of the fee
agreement with the client, the advanced fees remain the client’s
money until the lawyer has performed services and the client agrees
to the amount of fees earned and authorizes disbursement”). We find
some of the language of the engagement letter to be ambiguous. For
example, the letter seems to assume that Davis and Seibel would
make payments in addition to the retainer itself and Piper reserves to
itself the right to use any part of the retainer to satisfy a delinquent
payment. While the agreement is not a model of clarity, nonetheless,
considering the agreement as a whole and viewing it in the light of
the circumstances of the parties, i.e., Davis’s status as a judgment
debtor who wishes to place his assets outside the reach of his
judgment creditor, we do not find it unreasonable to construe the
agreement as an advance payment retainer.
    While we have today recognized the validity of advance payment
retainers in Illinois and have suggested how agreements establishing
those retainers should be structured, the standards governing such
retainers are to be given prospective application. Therefore, it would
be inequitable to judge Piper’s retainer agreement by those standards.
We conclude that the engagement letter, taken as a whole, provides
for an advance payment retainer which, upon its payment, belonged
to Piper. Accordingly, the circuit court erred in ordering Piper to turn
over the balance on the retainer to Dowling.

                                  IV
    Piper argues that the circuit court erred in ordering that the
$50,000 payment made to Piper by Seibel on June 8, 2004, be turned
over to Dowling. Piper submits that there was no pending citation at
the time this payment was made and that the funds were used to pay
the legal bills of Davis and Seibel prior to the service of the second
citation on Piper; accordingly, the funds were not properly subject to
turnover. Dowling argues that both Piper and Davis were under
citation on the date the payment was made and that there is no

                                 -17-
evidence that the citation had been dismissed before Seibel made the
payment. We note that neither the circuit court nor the appellate court
directly addressed Piper’s arguments with respect to the $50,000
payment.
     We agree with Piper that there is no reason to believe that it
would have counseled Davis and Seibel to transfer to Piper the sum
of $50,000 at a time when Davis was prohibited from making just
such a transfer of funds. The citations against Davis and Piper were
dismissed on June 8, 2004. Further citations were served upon Davis
sometime after June 25, 2004, and against Piper on August 6, 2004.
Dowling essentially asks us to presume that the $50,000 payment was
made prior to the June 8, 2004, dismissal of the citations. We decline
to do so. Absent some evidence to the contrary, we will not presume
that Piper would have advised its clients to deliberately ignore a
pending citation in making the $50,000 payment. Nor will we
presume that Piper would itself purposely violate the requirements of
an existing citation.
     With regard to the application by Piper of the $50,000 payment
to its bills for legal services rendered to Davis and Seibel, Piper states
that it had fully applied the funds by August 5, 2004, one day prior to
being served with the second citation. Dowling responds by asserting
that, following receipt of the second citation, Piper spent money that
“may have been the property” of Davis and that Piper was ordered to
turn over its billing records and statements. Piper indeed turned over
numerous documents and billing records to Dowling’s counsel
pursuant to the citations. However, Dowling’s citation to the record
does not support his contention that Piper spent money belonging to
Davis at a time when it was under citation. We conclude that the
$50,000 payment made to Piper by Seibel was not paid at a time
when either Davis or Piper were subject to any of the various citations
to discover assets. We also conclude that Piper applied all of those
funds to its legal bills prior to being served with the second citation
on August 6, 2004. Accordingly, the circuit court erred in ordering
Piper to turn those funds over to Dowling.

                            CONCLUSION


                                  -18-
    Today we recognize the existence and validity of advance
payment retainers as an option available to Illinois lawyers and their
clients in connection with the payment and use of retainers. We
conclude that the engagement letter in this case between Piper and its
clients, Davis and Seibel, provides for an advance payment retainer
that was not subject to a turnover order by the circuit court in
Dowling’s collection proceedings. We further conclude that the
$50,000 payment made to Piper by Seibel was paid to Piper and used
by it to pay its legal bills at a time when neither Piper nor Davis were
subject to any restrictions on the transfer of funds. Accordingly, we
reverse the judgments of the circuit and appellate courts.

                                  Appellate court judgment reversed;
                                    circuit court judgment reversed.

     JUSTICE FREEMAN, concurring in part and dissenting in part:
     I fully agree with the majority’s thorough and well-reasoned
decision to recognize the existence and validity of “advance payment
retainers” as an option available to Illinois lawyers and their clients
in connection with the payment and use of retainers. I further agree
with the majority’s decision to identify the specific requirements that
must be present in a fee agreement between an attorney and client in
order for it to constitute an advance payment retainer. This
recognition, in my view, provides both the bench and bar with much-
needed guidance in this important area of Illinois law. I therefore
concur in parts I, II and IV of the majority opinion.
     I must part company with the majority, however, with respect to
the analysis and holding set forth in part III of its opinion.
Specifically, I do not agree with the majority’s holding that the
$100,000 paid by Davis and Seibel to Piper in this case was an
“advance payment retainer.” It is my belief that the appropriate
disposition of this appeal is to remand the cause to the circuit court
for further proceedings in which both parties, Dowling and Piper (and
its clients Davis and Seibel), can present evidence with respect to the
proper characterization of the fee retainer and the acknowledged
ambiguities contained within that document. Despite relying upon

                                 -19-
several federal bankruptcy court decisions which state that the
determination of the type of retainer which exists between an attorney
and client is a question of fact to be decided in the trial court, the
majority disregards these precepts. Instead, this court–a court of
review–sits in this case as a finder of fact and bases its holding solely
upon the February 25, 2003, engagement letter–the same letter, I must
point out, which the majority candidly acknowledges to be
“ambiguous.” I submit that these points reveal internal
inconsistencies within the majority opinion.
    The question presented by this appeal is whether the $100,000
paid to Piper by Davis and Seibel under the February 2003
engagement letter belong to Piper or to its clients, Davis and Seibel.
The answer to this question, in turn, determines whether these funds
are available to satisfy the judgments obtained by Dowling against
Davis. As noted by the majority in its opinion, Dowling has
maintained the position before this court that because there is no clear
evidence in the record that the engagement letter was intended to
provide for an advance payment retainer, this court should therefore
construe the agreement as providing for a security retainer under
which the money paid to Piper remains the property of the client until
the lawyer applies it to charges for services that are actually rendered.
Dowling concludes, therefore, that the $100,000 transferred by Davis
and Seibel to Piper remained the property of Davis and Seibel–even
though held by Piper–and was available to satisfy Dowling’s
judgments.
    In its opinion, the majority rejects Dowling’s contention that the
agreement between Piper and its clients in this case constituted a
security retainer, and, instead, holds that the agreement was an
advance payment retainer. In arriving at the conclusion that an
advance payment retainer is present in the instant matter, the majority
characterizes its analysis as an “interpretation of a contract,” and cites
to People ex rel. Department of Public Health v. Wiley, 218 Ill. 2d
207, 223 (2006), for the proposition that contract interpretation
“involves a question of law, which we review de novo.” Slip op. at 5.
The majority fails to recognize, however, that in the very case it cites,
this court held that construction of a contract is a matter of law in
only those instances where no ambiguity exists. See Wiley, 218 Ill. 2d

                                  -20-
at 223, citing Farm Credit Bank v. Whitlock, 144 Ill. 2d 440, 447
(1991); see also Gunthorp v. Golan, 184 Ill. 2d 432, 440 (1998).
Indeed, in instances where language in a contract is ambiguous–such
as found by the majority in the matter at bar–“its construction is then
a question of fact, and parol evidence is admissible to explain and
ascertain what the parties intended.” Farm Credit Bank, 144 Ill. 2d at
447.
     In light of these fundamental principles of contract interpretation,
it is therefore significant that, in construing the agreement between
the parties, the majority readily acknowledges that “some of the
language of the engagement letter [is] ambiguous” (slip op. at 16),
and also candidly admits in its opinion that “the agreement [between
Piper and its clients Davis and Seibel] is not a model of clarity” (slip
op. at 17). In light of the very ambiguities found by the majority to
exist in the agreement between Piper and its clients, one would
accordingly expect this court to conclude that the characterization of
which type of retainer exists in this case is a question of fact to be
determined, in the first instance, by the trial court, where additional
relevant evidence–such as sworn testimony–can be adduced.
     The majority, however, defeats this expectation by construing–as
a matter of law–the agreement between Piper and its clients, Davis
and Seibel, as an advance payment retainer. The majority makes this
determination despite the fact that the above-discussed rules of
contract interpretation call for this matter to be remanded to the
circuit court for fact finding. The majority also arrives at this
conclusion despite the fact that the same federal bankruptcy court
decisions upon which it relies with respect to guidance in setting forth
the various types of retainers also establish procedural rules which
call for fact finding in determining the character of a specific retainer,
and which, therefore, do not support the majority’s disposition of the
instant cause. See In re McDonald Bros. Construction, Inc., 114 B.R.
989, 1002 (Bankr. N.D. Ill. 1990) (“a dispute about the terms of any
particular retainer agreement can only be resolved as a question of
fact,” and the absence of a “carefully drawn” retainer agreement
necessitates that the court ascertain “the parties’ intentions from the
circumstances surrounding the payment”); In re Production
Associates, Ltd., 264 B.R. 180, 188 (Bankr. N.D. Ill. 2001) (citing

                                  -21-
McDonald for the proposition that “inquiry into the nature of
Counsel’s retainer is a question of fact”). The majority’s own opinion
demonstrates in this case that there is an absence of a carefully drawn
retainer agreement (see slip op. at 16-17), which, therefore, requires
that findings of fact must be made. As a court of review, it is
improper for us to resolve this fact-dependent issue. See Sohaey v.
Van Cura, 240 Ill. App. 3d 266, 276 (1992) (it is the function of the
finder of fact, “not an appellate court, to determine both the disputed
and undisputed facts of the case and to draw from those facts the
reasonable inferences they support”).
    Finally, I further note that, in part II of the majority opinion, the
majority states that “in the event that the parties’ intent cannot be
gleaned from the language of their agreement, we conclude that the
agreement must be construed as providing for a security retainer.”
Slip op. at 13. The majority sets forth this caution based upon its
“aware[ness] of the potential for abuse of advance payment retainers,
particularly in circumstances such as that in the instant case where a
judgment debtor seeks to resist efforts of a judgment creditor to
collect on a judgment.” Slip op. at 13. Yet, in part III of its opinion,
the majority fails to heed its own cautionary admonishment in this
case by construing–as a matter of law–the agreement between Piper
and its clients to constitute an advance payment retainer despite
finding that the agreement is also ambiguous. Given the fact that the
majority recognizes the potential for abuse under the facts presented
in the instant appeal, it is far more prudent to remand this matter to
the circuit court for an evidentiary hearing wherein parol evidence can
be adduced–including statements made under oath–which would
guard against such abuse.
    In sum, I believe that the proper disposition of the instant appeal
is for this court to remand this cause back to the circuit court for
further proceedings to discern the intention of Piper and its clients,
Davis and Seibel, with respect to the specific fee agreement at issue
here. As explained above, this issue presents a question of fact, and
the parties to this appeal should be afforded the opportunity to present
evidence in the circuit court–including sworn testimony from the
witness stand–with respect to whether Piper and its clients, Davis and
Seibel, intended this agreement to constitute an advance payment

                                  -22-
retainer. I am not convinced by the majority opinion that it is
appropriate for this court–a court of review–to make a determination
with respect to the characterization of the retainer based only upon an
examination of the four corners of an admittedly ambiguous
document.
    For the reasons set forth above, I dissent from part III of the
majority opinion.

   JUSTICES KILBRIDE and BURKE join in this partial
concurrence and partial dissent.




                                 -23-
